Following a decade of expansion and development SKYCITY Entertainment Group is to focus on rationalising business structure and overhead, according to Managing Director Evan Davies. By driving revenues, reducing costs and maximising margin the company is confident it will deliver within the range of analysts estimations of NZ$107-NZ$122 million (US$77.7-US$88.6 million ) for the 2008 financial year. Cost management programmes have been developed and introduced and will continue to be phased in, with the aim of delivering operational efficiencies of NZ$33 million over the next 18 months.
On the flagship SKYCITY Auckland Evan Davies commented, “We recognise the need to generate new excitement around the SKYCITY gaming experience and refresh our product mix. Work began in September 2006 on the $40 million makeover of the main gaming floor, which is designed to create tailored experiences for our core gaming customers. The refurbishment is now well advanced and we have completed the heavy engineering stages, which have caused disruption for gaming customers. By Christmas, 14 of the 17 upgrade stages will be finished, with the entire project scheduled for completion in March 2008.”
SKYCITY is completing a detailed audit of its assets and will sell any that are not delivering. The SKYCITY Metro building and an office building are in the process of being sold for a total NZ$58 million (US$42.1 million). The SKYCITY shareholding in Christchurch Casino, the Adelaide property and the Cinemas business are being given particular focus. The company acknowledges the growing importance of its Asian customers and has recently opened a Baccarat room at its Auckland operation as well as providing menus and customer service tailored for Asian customers.
Evan Davies summed up, "With this review, we are positioning SKYCITY for long term sustainable growth. Our first decade was building the business through investment and acquisition. This allowed us to maximise our scale, assets and brand. Now we must maximise the value, by delivering a compelling customer experience and operational excellence." So far the company has not commented on the 230 job losses announced. It is not yet known which operations in New Zealand and Australia will be affected by the cuts. (E-05.23.07)
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