Sky City Entertainment posts rise in profit

Sky City Entertainment Group today reported a 4 per cent rise in net profit for the six months ended December, to $57.1m, from $55.1m for the same time the year-earlier.

The gaming and entertainment group will pay a fully imputed interim dividend of 12 cents per share, up from 11cps. The group announced the reintroduction of a dividend reinvestment plan, which will apply to the interim dividend.

Sky City managing director Evan Davies said the recently introduced smokefree legislation had impacted the financial results.

"Changes to smoking legislation naturally impacted business, however with the legislation only coming into force in December, it is too early to identify any change to pre-legislation expectation," he said in a statement.

Group revenues for the half year rose 19 per cent to $351.1m, from $295.8m.

Group earnings before interest, tax, depreciation and amortisation (ebitda) rose 17 per cent on the corresponding period last year.

New Zealand operations contributed 71 per cent of total revenues, and Australian operations 29 per cent.

Sky City's largest New Zealand property, Sky City Auckland, increased revenues by 4 per cent to $206m and delivered an ebitda of $104m.

The $85m Sky City Grand Hotel above the new convention centre at the Auckland complex is due to open in April.

Sky City Hamilton boosted revenue by 6 per cent to $16.5m, while ebitda rose 16 per cent.

Revenue for Sky City Cinemas slipped $1m to $16m. Mr Davies said ticket sales were in line with industry trends.

Sky City's newest property, Sky City Darwin reported revenue of A$39 ($43m) and ebitda of A$17m. Sky City Darwin was bought in July last year.

Sky City Adelaide increased revenues by 6 per cent to A$56m over the same period last year, with ebitda of A$11.9m.

Mr Davies said the the first stage of a proposed A$70m development was due for completion by May.

Looking ahead to the full year, Mr Davies said he was "comfortable" with analyst expectations of a full year profit of $114m-$119m, "provided pre December predictions for the impact of smoking bans in New Zealand were accurate.

Shares in Sky City last traded at $5.22, having ranged between $4.22 and $5.50 over the past 12 months.

- NZPA