SkyCity's Adelaide construction project. Photo / SkyCity
SkyCity's Adelaide construction project. Photo / SkyCity
SkyCity Entertainment Group investors will later this week get their first comprehensive trading update on the business, following the disastrous NZ International Convention Centre fire.
The company told shareholders at its annual general meeting on October 18 that it would hold an event to talk about the current financial year at a pre-planned meeting in Adelaide this Thursday.
SkyCity is now well into the first half of its June 30, 2020 financial year and post-fire, no trading revision has been provided.
Institutional shareholders from New Zealand and Australia will go on Thursday and might well hear how financial forecasts could change post-fire, given that the company was expecting the $703 million centre to be finished around October next year.
But next October falls within SkyCity's June 30, 2021 trading year, so how much the financials are affected by the fire remains unknown and how much new information will come out on Thursday is uncertain.
The NZICC fire started on October 22. Photo / Will Trafford
Investigations are under way and SkyCity will most likely continue to pay tribute to fire and emergency services and note lack of fatalities on Thursday.
To give some comfort to investors who own shares in the business with a market capitalisation of $2.5 billion, it is likely to cite insurance policies and reiterate that it is backed by international insurance.
Adelaide was chosen for Thursday's briefing because SkyCity has a A$330m ($355m) construction project on in the downtown area on the banks of the river alongside the historic railway station, home to its casino.
Its new Adelaide hotel with new restaurants is due to open next October in time for the T20 World Cup Cricket next November, providing an "integrated entertainment destination on the Festival Plaza forecourt".
Its new building was designed by The Buchan Group in association with Hecker Guthrie Walter Brooke, and built by Hansen Yuncken. The development will include what SkyCity promises will be "Adelaide's most luxurious hotel, a wellness centre including a day spa, pool and gym as well as additional signature restaurants and bars".
Plans for the grand new SkyCity building in Adelaide. Photo / SkyCity
Pre-fire at last month's AGM in Auckland, SkyCity said the year to date trading was a positive start in New Zealand, particularly Auckland electronic gaming machines. International business trading had a "reasonable start" but a lower turnover or win rate than the theoretical win rate.
Pre-fire, shareholders heard of no change to the earnings guidance for 2020. SkyCity had last month "expected to achieve some growth in FY20 group normalised EBITDA versus the previous corresponding period on a like for like basis", it said.
Its 2019 normalised EBITDA was $303m and net profit after tax was $151m. SkyCity said last month its operating environment would continue to be challenging with cost pressures.
SkyCity has a share buyback on, is using money from asset sales like its Darwin property and Auckland carparks to reduce debt and says it has a low level of gearing. It has been committed to a dividend policy of a minimum of 20cps.
The fire the day it started. Photo / Westpac Rescue Helicopter
A focus for the 2020 financial year was to deliver major projects including the NZICC and new five-star Horizon Hotel as well as Adelaide "preparing for new business operations".
A major revenue uplift and higher profitability was the aim of the two huge projects, although some have in the past expressed concern about a $1b development programme. SkyCity also has hotel plans for a lake-side Queenstown site.
SkyCity director Bruce Carter is chair of the audit and risk committee and chair of the Adelaide development sub-committee. He has a role in overseeing the delivery of the Adelaide expansion project and the relationships with the South Australian State and private stakeholders in the Riverbank Precinct.
The Thursday presentation will be posted on the NZX and ASX.
Meanwhile, Newstalk ZB has reported Auckland's mayor Phil Goff saying he's confident the city can host major events. The fire significantly damaged the venue, due to host the Apec conference in 2021.
Goff said the fire was a setback, but the council's always had a backup plan in case it wasn't ready. He says the Prime Minister has announced Auckland will be open for Apec, and the city will produce a great conference. Auckland will be hosting Apec with all of the competency and pizzazz expected for such an occasion, he said.
On October 31, SkyCity was trading at $3.90. It closed down 8c at $3.82 on Friday.
