Casino's profits soar with boom in tourism and city

By KARYN SCHERER

Casino operator Sky City has boosted its outlook for the next two years amid record numbers of tourist arrivals and a booming local economy.

The company revealed yesterday that its net profit for the six months to the end of December was $27.7 million, up 24 per cent compared to a year earlier.

Revenue was up across the business, from $127.6 million last year to $143.7 million this year.

A record number of overseas tourists in Auckland has seen an average of 12,400 punters through Sky City's doors each day - the highest level for over two years.

The higher-than-expected profit has also meant a record interim payout to investors of 24c a share - up from last year's 17c.

While Sky City remained cautious about a possible post-America's Cup slump in visitors, it said yesterday that it was now expecting significant growth for the full year, and further growth in 2001.

While gaming revenues have continued to the increase, the company has also improved other aspects of its business.

Despite a glut of hotel rooms in Auckland, its hotel managed an average occupancy rate of 76 per cent during the six-month period.

Revenue from the Sky Tower, the theatre and food and beverage outlets also improved.

Managing director Evan Davies refused to comment on a Business Herald report that the company was looking overseas at further investments and had been short-listed to buy the Adelaide Casino in Australia.

Some investors are understood to be concerned that Sky City already has a lot on its plate over the next year, establishing new casinos in Hamilton and Queenstown.

Mr Davies said Sky City's main priority would remain growing its Auckland business, "but we also think we've got the capacity to be involved in those opportunities that we're currently looking at."

Meanwhile, the company says it is unconcerned by the Government's proposal to review the gaming sector.

Fears of a clampdown by Labour and the Alliance are believed to have hampered Sky's share price in recent weeks.

Mr Davies said Sky City had discussed the issue with political parties before the election, and did not expect any major changes to policy.