They're back. High rollers return to SkyCity, drive up net profit

The big spenders have returned to SkyCity, driving up profits at the business. Photo/123RF.

They're back.

High-rolling gamblers have returned to SkyCity after a two-year absence.

SkyCity Entertainment said the return of the so-called high roller or international VIP gamblers in the final months of its financial year helped drive the company to a record net profit.

The high-roller end of the regional, Asia—Pacific, market took a hit late in 2016 after 17 employees at Sky City's competitor, Crown Resorts, were detained in China, on suspicion of gambling crimes, including the direct marketing of casinos to large groups in China.

The crackdown ended with Crown's international VIP business head, Jason O'Connor, and four colleagues, serving 10 months in a Shanghai prison.

SkyCity said it raised its normalised net profit by 10.4 per cent to $169.9 million for the year to June, ahead of market expectations and its own guidance.

"We are happy with that," SkyCity chief executive Graeme Stephens told the Herald.

"That's really a function of a strong finish in May and June, with the international business in particular leading the charge on that.

"It [the VIP market] is a harder part of the market to predict - it's a bit more volatile - so it did come in a bit stronger than we anticipated.

"It was quite specific to our international VIP gamblers - the gamblers that we fly into our properties.

"Sometimes they say they are coming then don't, but everyone who said they were coming came, plus a couple more.

"That part of the business has recovered very strongly from being quite down in the previous year".

The international VIP business has recovered strongly from a "challenging" 2017, achieving turnover of $11.9b, up 39.2 per cent, and record normalised EBITDA of $32.6m, up 71.2 per cent.

Stephens said in a statement the result reflects both the recovery of the sector across Asia-Pacific and the performance of the company's restructured international business team.

"We've seen more visits from our major customers, and an increased use of third-party junket operators which led to a record six-month turnover in the second half of the financial year.

"We've managed to increase our margins due to operating efficiencies and low bad debts."

SkyCity shares last traded at $4.08, up 8c from Tuesday's close.