Monday, August 13, 2007

Sky City Casino Lead up to 2007 Full Year Profit Announcement

Sky City Casino (SKC) has been in the news recently.

A week or so ago there was talk of Greater Union, the US Cinema Chain, being interested in the Sky City Cinema assets.

Of course SKC paid far too much for Village Cinemas when they originally bought a portion in the late 90s, then a purchase of the unit in its entirety in 2002. Money was lost through write downs then and more money will be lost when the "asset" is finally sold to some other poor sucker-I hate cinemas as a business because as a whole they don't make money.

As a substantial Sky City Casino Shareholder I am very pleased the Cinemas are going to be sold.

Proceeds should be used to pay off the mortgage.

The other bit of press Sky City has garnered came out this morning in the NZ Herald and basically outlines what management have been up to since Evan Davies departure a few months back.

The focus for a company profit turnaround seems to be an effort to get more moola from the "high rollers" that visit the Auckland Complex , forgetting of course the fact that management recently banned a high roller after he won "millions" off the company last year in the VIP lounge, so naturally this has not endeared any possible whales from plunking down the big bucks. So they are starting on the back foot here because the high roller club is an exclusive one worldwide that obviously talk amongst themselves.

The other tack management are taking is on lowering table bets for games such as Blackjack. From the usual minimum of NZ$5 down to $2.50 on a Friday and Saturday night the focus here is at the lower end, perhaps trying to lure one arm bandit freaks to try a game of skill? I personally don't see this increasing table business. You are either a table player or a fruit machine retard. If they are trying to lure passerby by lowering the bet I'm not sure whether $2.50 is going to make any difference.

I can see managements' thinking though. If you can get them to the table, perhaps they will stay longer and therefore lose more pennies. The jury is still out on this but we may know more when the Full Year 2007 result comes out Monday 21 August (NZ time)

Either way next weeks results may be a turning point in the companies history. We will find out where they have been , what assets will be flogged off and although very hard considering recent upheavals, perhaps a profit forecast depending on the above.

As I write this Monday Morning the share price is down by 6c to $4.56 on low volume and is at lows for a year.

c Share Investor 2007