Casino deals out record dividend

By KARYN SCHERER

Auckland-based casino operator Sky City has boosted its outlook for the coming year, following a record payout to investors.

The company has also confirmed it is considering more overseas investments, possibly outside New Zealand or Australia. The possibility comes as Australia is about to slap a 12-month ban on any new internet gambling services, and the US tussles with a similar dilemma.

Last month, Sky City confirmed it was taking an initial 7 per cent stake in Australian online sports betting company Canbet, with the opportunity to increase it.

Confirmation that it is looking at further internet-based investments follows a better-than-expected result for the year ended in June.

Boosted by events such as the America's Cup, the company yesterday reported a 15 per cent increase in revenue, to $295.4 million. The main reason for the increase was an extra $30 million gobbled up by its 1300 slot machines and around 100 gaming tables.

While the number of visitors to the Sky Tower was steady at around 650,000, an extra 500 people a day passed through the doors compared with last year.

Managing director Evan Davies attributed the increase to a refurbishment of the main casino floor, as well as new types of gambling attractions and a concerted effort to attract more high rollers from Asia and Australia.

However, Mr Davies also noted it had managed to boost profits from all its operations, increasing its pre-tax profit by 30 per cent to $90.1 million. Its bottomline profit also increased by a third to $60.3 million.

Sky City had previously warned it was unlikely to be able to maintain such spectacular growth over the coming year, given the one-off boost from events such as the America's Cup.

Analysts are revising their forecasts, but are still wary that some capital expenditure will be needed on its newly acquired casino in Adelaide.

While the latest accounts do not include the impact of its Adelaide purchase, the company did include the value of its licence in the books - boosting its intangible assets by $230 million.

Expectations of a strong profit have boosted its share price over the past two months, and saw it close 25c higher at 770c last night - its highest level for more than a year.

The record profit has seen investors rewarded with a final dividend of 32c per share, taking the dividend for the year to 56c a share.

The fully imputed dividend will be paid on October 6 to shareholders on the books on September 22.