Ann: FORECAST: SKC: SKYCITY First Half FY14 Outlo

• Release Date: 17/12/13 10:30
• Summary: FORECAST: SKC: SKYCITY First Half FY14 Outlook and Trading Update
• Price Sensitive: No
• Download Document  3.94KB

					SKC
17/12/2013 08:30
FORECAST

REL: 0830 HRS SKYCITY Entertainment Group Limited (NS)

FORECAST: SKC: SKYCITY First Half FY14 Outlook and Trading Update

AUCKLAND: SKYCITY Entertainment Group Limited (NZX: SKC / ASX: SKC) today
provided the following Outlook and Trading Update for the first half of the
2014 Financial Year.

First Half FY14 NPAT Outlook

Normalised Net Profit after Tax (NPAT) for the six months ended 31 December
2013 (1H14) is anticipated to be in the range of NZ$65 million to NZ$68
million. This compares to NZ$72 million in 1H13 (excluding Christchurch
casino, which was sold in December 2012).

The result in this half year has been adversely impacted by the significant
currency appreciation of the NZD against the AUD - up 18% from 0.78 to 0.92.
This is expected to negatively impact SKYCITY's 1H14 Normalised NPAT by
approximately NZ$3 million.

ASX200

As announced on 6 December 2013, following the S&P Dow Jones December
quarterly review, SKYCITY will be included in the S&P / ASX 200 index,
effective after the close of trading on 20 December 2013.

Trading Update

Auckland
Auckland EGM revenues have firmed in Q2-14 and cost reduction initiatives
across the business, particularly around marketing costs, are leading to an
improved EBITDA margin in 1H14. Our new signature restaurants, Masu and The
Sugar Club have been received well and complement the outstanding dining
options now available at SKYCITY. We continue to refurbish the Grand Hotel
rooms, are developing a new lobby bar and Italian restaurant within the Grand
and transforming Federal Street into a newly paved pedestrian friendly
precinct, all of which are causing some minor disruption. Overall, we expect
Auckland to deliver modest EBITDA growth for the first half of FY14.

Adelaide
The South Australian economy has not shown any consistent signs of growth
and, with the ongoing partial closure of the Adelaide Southern railway line
due to electrification works, the property is experiencing a challenging
trading environment. Having concluded the Agreements with the South
Australian government earlier this year and in readiness for the launch of
Premium gaming, TITO and cashless gaming, the main floor and VIP rooms are
being significantly upgraded at a cost of circa $40 million, with the
development of the new premium Platinum and Pearl rooms and new Baccarat
Pavilion, which will open from February 2014. These significant works are
causing some short term disruption to the gaming floors. Encouragingly,
despite this disruption, during the recent Ashes Test at the newly
redeveloped Adelaide Oval, the Adelaide Casino benefited from a substantial
uplift in visitation facilitated by the newly opened Torrens River bridge.

Darwin
Darwin continues to show good non-gaming revenue growth, with high hotel
occupancy and strong demand for the new Lagoon Resort. Local gaming revenues
have been somewhat soft, albeit offset by an improvement in the International
Business volumes in Darwin. There is some cost pressure in Darwin, which is
expected to result in a softer EBITDA margin in 1H14.

Hamilton
The softness experienced in the first quarter has shown some signs of
improving in the second quarter, however the 1H14 result will be somewhat
softer than 1H13.

Queenstown
The management integration of SKYCITY's second casino in Queenstown (the
Wharf) is now complete with both casinos being refurbished in this half.
International Business growth continues to improve with higher Asian and
Chinese visitation, following the opening of our first Horizon IB Salon in
Queenstown.

International Business
International Business experienced a strong first quarter, but volumes have
been softer second quarter to date. Overall, IB turnover is expected to be
flat (on a constant currency basis) for 1H14. Based on current win rates of
just under theoretical (of 1.35%), 1H14 IB reported results are expected to
improve on 1H13, which had a win rate of only 1.06%.
End CA:00245252 For:SKC    Type:FORECAST   Time:2013-12-17 08:30:06