SKYCITY Entertainment Group today announced a profit of NZ$120.1 million (US$76.9 million) for the year ended 30 June 2006, up 13% from 2005. Revenue growth is up 12% and Group earnings before EBITDA up by 6% to NZ$295 million (US$188.9 million). Ten years ago the company started in Auckland with construction on one site, and has become a trans-Tasman enterprise with NZ$1.7 billion (US$1.1 billion) in assets spanning tourism, cinema complexes, hotel and conference accommodation and casinos.

The latest results are regarded as being at the top end of expectations in the light of environmental and regulatory changes. SKYCITY Managing Director Evan Davies says, “Our strategy has been to invest in existing facilities and diversify our entertainment interests while maintaining strong capital management. This is generating new revenues and means we are well-placed for growth into 2007.” He further commented, “This has, without question, been a challenging year with the impact of the smoking restrictions in New Zealand and Adelaide and ongoing regulatory measures. However the results show New Zealand operations have largely recovered from the impact of the smoking ban.”

SKYCITY Auckland’s revenue performance was underpinned by non-gaming revenues, which rose 20%. This was driven by excellent results from the convention centre (+22%), full year revenues from the Grand Hotel and increased food and beverage income (+11.3%). Gaming revenues rose 5%, with strong growth in table games following redevelopment of VIP rooms. However Auckland’s EBITDA was flat, due to increased regulatory compliance, host responsibility and corporate costs.

SKYCITY Adelaide continued to stage a strong turnaround, after a disappointing performance in 2005. Adelaide’s performance directly reflects the success of the Southside redevelopment, as the expanded gaming area, North Restaurant and Loco Bar facilities attracted new customers and a positive response from existing customers. Total revenues increased 21% to $A131.2 million (US$100.1 million), with 18% growth in gaming and 50% growth in non-gaming revenues. This pushed EBITDA up 53% to $A27.3 million (US$20.8 million).

The Darwin complex has benefited from robust economic growth in the Northern Territory and improved tourist links. In the past year, SKYCITY Darwin has delivered 10% growth in revenues and 7% growth in EBITDA. In its first year of full ownership SKYCITY Hamilton delivered a good result, demonstrating a recovery from the smoking ban. Revenue was up 14% and EBITDA was up 15%. The 2006 result included a contribution from the operations within the Riverside Entertainment Centre purchased during the year.

Evan Davies says SKYCITY’s management focus for 2007 will be to consolidate and capitalise on the company’s core asset base. “Looking forward, we expect SKYCITY Auckland and Hamilton to consolidate their performance trends, while SKYCITY Adelaide will continue to grow and capitalise on the benefits of redevelopment. However the smoking ban will inevitably have an impact on Adelaide’s revenue growth in the 2008 financial year. The planned redevelopment of the gaming floor in Auckland, the opening of a sports bar in Hamilton, the ongoing development of Adelaide and economic momentum in Darwin will all help grow earnings streams.” (E-08.21.06)

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