KEY POINTS:
SkyCity Entertainment Group has made a positive start to the financial year but is being cautious about making predictions for the year ahead.
The casino and hotel operator reported a 1 per cent increase in revenue compared to the first quarter of its 2008 year, boosted by strong Australian performances.
The Darwin casino was up 7 per cent. Adelaide's flat result was considered to be a steady performance in light of a smoking ban introduced last December .
Speaking to his first annual general meeting chief executive Nigel Morrison said it was "not a bad result" in challenging economic conditions.
Excluding its international business and the cinema business, the group's revenue from its casino assets were up 3 per cent.
Morrison described the Darwin casino as the group's "star asset" and he was pleased by the turnaround in Adelaide . But it was the New Zealand business which dragged down the casinos.
"There is no doubt New Zealand is in recession, Morrison said. "But to be only off two per cent is a pretty good outcome," he said of the Auckland business.
The international business saw the biggest fall in revenue dropping 33 per cent but this had been caused but an overly high win rate in the first quarter of previous year.
The cinemas were also down. But since the end of the quarter it had opened its new Manukau cinemas and increased its share of the Auckland market from 55 per cent to 64 per cent.
Morrison said the business would now focus on growing revenues and lifting performance while keeping a tight lid on capital expenditure.
He was optimistic about the performance of the cinema assets despite their poor showing in the last year.
In Auckland the group planned to finish changes to its gaming machines by the end of the year and Morrison hoped to see an impact from the renovations by March.
It was also hoping its Darwin casino would benefit from a $12 billion infrastructure project expected to be worked on between 2010 and 2011.
Morrison would not be drawn on firm predictions but said the group remained on track for revenue growth. Industry commentators welcomed the first quarter result.
"I think it is a credible result given the tough economic conditions," said Brook Asset Management's Paul Glass. He said the company was starting to see the benefits of having a sensible management team on board. Goldman Sachs analyst Marcus Curley described it as a a solid start. He predicted 6 per cent revenue growth on the casino business.
SkyCity's share price closed up 10 cents on $3.30.
MIXED FORTUNES
First quarter 2009 year compared to first quarter 2008
* Auckland: -2 per cent
* Adelaide: flat
* Darwin: +7 per cent
* Hamilton: -5 per cent
* Queenstown:+7 per cent
* Int. business: -33 per cent
* Cinemas: -1 per cent
* Total Group Revenues: +1 per cent
CASINO OPERATOR BETTING ON SUPPORT FROM SENIORS
SkyCity is trying to increase its customer base by targeting senior citizens.
The casino and hotel operator has traditionally sold itself as a playground for the young, but a coffee and cake special and discounted tickets for the Sky Tower are being touted to boost its daytime visitors.
Chief executive Nigel Morrison says the group has been thinking about the different people that visit SkyCity.
"During the day we get more seniors. But that's one thing we haven't done well here - we haven't attracted the senior community."
Morrison said the move had already been a big success in its Adelaide casino where it had cut the number of youths to boost older customers. "Our demographic is really 35 to 55-year-olds."
Morrison told shareholders at yesterday's annual general meeting that marketing was a big part of the company's business plans.
But one shareholder questioned the wisdom of focusing on marketing.
"We have all seen what happened when one company, Telecom, focused on marketing, rather than their core business. We saw a destruction of value."
