Tuesday, May 11, 2010

Sky City 2010 full year profit looking good

Come late August 2010, Sky City Entertainment Group [SKC.NZ] look set to announce a record profit of between $126-132 million and that has been forecast by SKC management itself.

I think they could well surprise on the upside though.

This is why.

In addition to the continued cost savings through paying down debt and other business costs there will be $60-70 million from the proceeds of the sale of their cinema business which will be an approximate $10 million straight to the bottom-line. This would already be accounted for but the contribution to the 2010 full year is unclear because there is additional disposal of associated cinema assets that may not be sold before the June 30 financial year end.

One big determinant for the full year profit figure will be the Australian/Kiwi dollar cross. Back in August 2009 the Kiwi was buying over 81c Australian and over the last half has been trading well below 80c. Its Australian casino assets in Darwin and Adelaide have been trading well and the currency swap from revenue exported to head office in Auckland should give a good boost.

A solid 2010 result will continue a good run for SKC since its $NZ115 million 2009 full year result and will mean an increased dividend of at least 7.5c on the 6.5 paid out last year.

Sky City Entertainment shares have been savaged over the last few weeks dropping from a range trading between $3.25- $3.30 to trade last today up 4c to $3.04.

Disclosure: I own SKC shares in the Share Investor Portfolio

Share Investor Interview

Share Investor Interview: Sky City CEO, Nigel Morrison - November 2009
Sky City Entertainment: CEO Nigel Morrison discusses 2010 Half Year

Sky City @ Share Investor

Sky City Entertainment Group Ltd: Download full Company Analysis
Sky City Entertainment: CEO Nigel Morrison discusses 2010 Half Year
Sky City Entertainment Group 2010 Interim Profit Review
Are Insiders selling Sky City Stock?
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City share offer confusing and unfair for smaller shareholders
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
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Sky City Entertainment share price drop
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Sky City Management: Blind, deaf and numb
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Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Discuss SKC @ Share Investor Forum
Download SKC Company Reports

Recommended Amazon Reading

The Intelligent Investor: The Definitive Book on Value Investing. A  Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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c Share Investor 2010


  1. OK, from now on, forget the stock commentary, just post pictures of good looking sky city girls.

    Or you could just make a whole week of pictures of cheerleaders for the companies you follow.


  2. A great series idea:) If you look at www.tradinggoddess.com you will see it has already been done.

    Copying is the most sincere form of flattery though...

  3. Yeah, but when a girl does it just to attract male readers/traders it is just CREEPY.

    If you were to do it and find chicks actually related to the companies you follow, you would become a legend :-)

  4. You have a cogent answer for everything SB :)


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