Yesterday’s release of SkyCity Entertainment Group’s shareholder review of 25 September 2009, shows that total Group revenues were up 6% on the previous year Rod McGeoch’s Chairman’s review ‘Working Hard for Solid Growth’ states that the financial year just ended presented extraordinary times for companies worldwide but that in spite of this: “It is my pleasure to report that underlying net profit after tax for the year to the end of June 2009 was $115.3 million, up 13 percent on last year’s underlying net profit after tax of $102.0 million.”

The Chairman thanked CEO Nigel Morrison and his team of management executives for the energy and sheer determination they have invested in lifting second half performance, adding that the Board feels the business has clearly found its feet and is now well placed for the future. “The Board shares the Chief Executive’s ambition to achieve double digit growth again this year.”

In his second report for SkyCity Nigel Morrison said, “The 2009 result shows what this organisation can accomplish in a significant downturn and satisfies me that we have sound structures and systems in place, a committed management team who are encouraging positive results from teams across the business, an evolving suite of products and services that is gaining us market share and traction, and a re-emerging confidence in just what we are capable of.”

On 1 July 2009, player information displays (PIDs) became mandatory on gaming machines in New Zealand and SkyCity invested over $20 million to comply with this regulation. According to Morrison as yet no discernable reduction in machine revenue has been noted, but he comments that the PIDs are not helpful to efforts to grow the machine gaming business.

“According to Gambling Compliance, a UK gaming monitoring company, regulations governing casinos in New Zealand are some of the most stringent in the world – more so than in Australia, the US, Canada and South Africa. That makes it difficult for us to compete on a level playing field with our Trans-Tasman competitors and peers in Sydney and Melbourne. It also makes it harder for us to attract international players and tourists to New Zealand.”

On the David Letterman show during his trip to the United States, Prime Minister John Key outlined his top ten reasons for tourists to visit New Zealand. “The loosest slot machines in the Pacific Rim” has already raised the hackles of the country’s anti-gambling Problem Gambling Foundation but Christchurch Casino executives have seized upon the comment to advertise their casino.

On the subject of harm minimization Morrison comments that the Ministry of Health’s own statistics show that casinos are not a problem. ‘Casinos are not the problem, yet we are more tightly regulated than gaming machines in pubs and clubs, Lotto and online gaming operations – a unique situation.” He adds, “What seems to have been forgotten is that our business is built on enjoyment and fun, not personal and financial stress. It actually makes no sense for us, commercially or morally, to pursue anything other than a highly responsible approach.”

In summing up Morrison notes his concern about the potential smoking ban in Darwin, Northern Territory, where he says the propensity to smoke is higher than in the other Australian jurisdictions and could see gaming revenues soften by 15%. “We achieved double digit growth in our underlying net profit in 2009. If things go to plan, and the economic and regulatory environment does not shift to disadvantage us further, it is certainly our objective to deliver similar growth for shareholders again in 2010.” (E-10.02.09)

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