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Friday, July 26, 2013

Sky City gets the 2nd deal

Sky City Entertainment Group Ltd [SKC.NZX] had Friday morning received approval for the 340 plus million expansion of the Adelaide Casino and together with the 400 plus million expansion of the flagship outlet at Auckland, NZ received earlier this month will combined with borrowing costs, shell out the best part of 850 million dollars.

While the latter has been widely canvassed on this blog and other media the former is picked to be more of a game changer than the latter with an amendment to the state's Casino Act allows for a 20-year extension of SkyCity's exclusive casino licence until 2035, the introduction of cashless gaming and ticket in, ticket out (TITO) technology, lower gaming tax rates for VIP gaming, an increase in slot machines by about a third to 1,500 and an increase in gaming tables to 200.

By comparison the major features of the Auckland agreement, in addition to an extension of the Auckland Casino Venue Licence to 30 June 2048, the Heads of Agreement provides regulatory reform for SKYCITY’s Auckland property, comprising: An additional 230 gaming machines and 40 gaming tables plus 12 gaming tables that can each be substituted for 20 automated table game player stations.

So, what the aussies are saying is that they will gain a 6 star hotel - yep a 6 star - and a revamped casino, heaps of additional gaming tables and up to 500 extra gaming machines for 20 years. That is well up on what Sky City got and it cost them 50 million less.

All that aside though, is that the Aussies also changed gaming laws, just like we did over here, and it was just as stead fastly done as it was in Auckland.

Then where is the opposition!

I did a quick google for both OZ and NZ and came up with years and years of opposition to the Auckland Casino and very little for the Australian one - are Australians really that against more jobs, more tax, more revenue from a new development?

Apparently not but we over here seem to be against it with our own newspaper editors writing columns multiple times and people having opinions based on flimsy ideas like public assets not getting a fair deal.

What it is is a private investment in two areas that will require more private investment as the years move on, bigger, brighter and classier than these two buildings - in 10 years time we will have to do it all again and continue to invest.

Hopefully we will have settled down by then, we will be perhaps inclined to accept the generosity of others when they invest money and expect a return for it - and not have bureaucrats stick their noses in.

Sky City Convention Centre @ Share Investor

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Wednesday, February 6, 2013

Sky City Expansion: Adelaide Spreads on the Riverbank

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Tuesday, March 18, 2008

STUFF.co.nz: Sky City under review

Sky City Entertainment has been busy in the first few weeks
of Nigel Morrison's time at the top. Business units are all
under review.

By GARETH VAUGHAN - The Dominion Post | Tuesday, 18 March 2008

News out About Sky City today

• SkyCity CEO sees cinema sale within 3 months - Stuff.co.nz
• Sky City reviews Adelaide plan - Bloomberg

SkyCity Entertainment Group's(SKC) new boss wants to double to $3 billion the annual value of bets placed by high-rolling Asian gamblers as he strives to turn around the casino operator's recent disappointing performance.

Nigel Morrison, who took SkyCity's helm as chief executive on March 3, says this is the best way to combat the volatile impact on SkyCity's earnings from wealthy overseas gamblers.

The house did well against SkyCity's primarily Asian overseas customers in the December half-year, with $12.6 million in operating earnings from them. This helped push up group net profit, before the $60 million write-down in the carrying value of SkyCity Cinemas, by 36 per cent to $61.3 million.

However, a winning streak by high rollers in the first half of last year led to a $2.9 million loss, helping slash group net profit 23 per cent to $45 million.

Mr Morrison said high-roller volatility stemmed from the fact that the $1.5 billion worth of total annual bets placed by international gamblers at SkyCity's casinos was not enough. SkyCity expects to win about 1.3 per cent of the $1.5 billion.

The challenge for SkyCity, therefore, was to double at least the value of annual high-roller bets: "We need to think outside the square about how we might do that," he said.

Mr Morrison, a 48-year-old Australian, quit a role as chief financial officer of Hong Kong and Macau Casino group Galaxy Entertainment to move to Auckland. He replaced Evan Davies, SkyCity's founding chief executive, who departed abruptly after 11 years with a $2 million payout last June. SkyCity director Elmar Toime held the fort as executive director in the interim.

Including the write-down on SkyCity Cinemas, SkyCity last month posted interim net profit of just $1.3 million. Mr Morrison said SkyCity was talking with two potential buyers of the cinema business and he hoped to have the protracted sale wrapped up within three months. SkyCity Cinemas produced operating earnings of just $2 million in the six months to December.

SkyCity, which owns casinos in Auckland, Hamilton, Darwin, Adelaide, 41 per cent of Christchurch Casino and 55 per cent of one of Queenstown's two casinos, would then be free to focus on improving the performance of those businesses.

Mr Morrison said his mandate from shareholders for the next 18 months was to get SkyCity's casinos "buzzing". The recent $40 million refurbishment of the flagship Auckland Casino's main gaming floor was a step toward this.

Auckland produced $107.7 million of $161.4 million group operating earnings in the December half, but this rose just 0.4 per cent as margins contracted. SkyCity would work on getting the lighting, music, food and service right at Auckland, now that the hard work on the "physical asset" was completed.

"I would hope that in six months we would have made a big impact into all those things."

Disclosure: I own SKC shares

Related Share Investor reading

Sky City HY 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: Underperforming
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

c Links Share Investor 2008

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Friday, July 26, 2013

Sky City gets the 2nd deal

Wednesday, February 6, 2013

Sky City Expansion: Adelaide Spreads on the Riverbank

Tuesday, March 18, 2008

STUFF.co.nz: Sky City under review

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