Tuesday, July 21, 2009

Sky City Profit Upgrade: Always on the Cards

If you have been reading this blog for the last two years you will know that I have a large shareholding in Sky City Entertainment Group [SKC.NZ]. You will also know that I have banged on about owning this stock until my fingers have bled, and you will then know the reasons why I like owning shares in this company.

Well, news out today that Sky City management have upgraded Fully Year profit in the 12 months to June 30 2009 from a $99-106 million range to a range of $113 - $116 million, reinforce my obsession. Just two weeks ago I gave a nod and a wink and picked the company as my Stock of the Week. That was when the stock price was at $2.58.

At the time of writing the stock is up 21 cents to $3.07 on exceptional volume.

Just yesterday I wrote that trading in Sky City shares last Friday were quite large (around NZ $18 million) and the movement in share price by 10c that same day was an indicator that insiders knew about material information, Thursday night at the latest -the share price had steadily moved upwards last week after being in the doldrums for weeks.

More insider trading? Yes but lets leave that to another day.

I have also indicated many times in the last year that this company will do well during a recession and one simply shouldn't sell because the share price is tanking, in fact you should really have been buying if this stock suits your investment profile.

The signs have been there of a turnaround in the company, Nigel Morrison has been savage at cutting costs, including paying down debt with a slightly dodgy capital raising a few months ago and his experience and history at casino turnarounds has provided a renewed revenue bounce at the company's Adelaide casino.

The Auckland casino has finally been freed of construction and revamps, with more revenue coming from gaming machines and food and beverage sales and even the lackluster cinema business is providing more income, even though I am dubious of the sustainability of that.

As I have also mentioned before the Darwin Casino continues to be a star in the Sky City crown, with good revenue increases likely to be revealed in the profit announcement to be made Wednesday August 26 and future development there will pull in more gaming income.

In recessions, casinos that Sky City operate do well. They differ from their big flashy and unprofitable Las Vegas brothers who rely much more on overseas customers for gaming income, where the vast bulk of profit for Sky City's money spinners comes from the local population, well over 70% I believe.

With more Kiwis staying home, especially at its Auckland complex, where a large number of its customers are recent immigrants from Asia, revenue there is bound to be well up.

I look forward to congradulations from my readers for indicating to them how much I have liked this stock over the years with a wink and a nod as subtle as a sledgehammer in the head.

Tell me you bought while the stock was low.

Sky City Entertainment Group @ Share Investor

Sky City's Current Cinema "Boom" a Horror Story in Disguise
Stock of the Week: Sky City Entertainment Group
Sky City share offer confusing and unfair for smaller shareholders
Sky City CEO doubles down
Sky City Entertainment 2009 Interim Profit Review
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Discuss this stock @ Share Investor Forum

Related Amazon Reading

Casino Industry in Asia Pacific: Development, Operation, And Impact
Casino Industry in Asia Pacific: Development, Operation, And Impact by Cathy Hsu
Buy new: $155.00 / Used from: $157.53
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c Share Investor 2009

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