Wednesday, December 19, 2007

New broom at Sky City set to sweep

A new boss at Sky City Entertainment Group Ltd [SKC.NZ] brings a whole new broom to the company closet, a CEO with a long history of casino experience.

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Nigel Morrison

Nigel Morrison has more than 18 years' experience in the casino business throughout Australia and in Asia and his tenure at the New Zealand entertainment company is a welcome relief from the current temporary head, Elmar Toime, with no gaming experience, and the previous one, Evan Davies, who got his casino experience on the job when he started with the company right at the beginning.

Morrison's pedigree, having just left the Macau-based Galaxy Entertainment Group, former chief executive of the Federal Group, Australia's largest private casino and gaming company and as chief operating officer at Crown Limited where Morrison played a big role in restructuring the business.

It is that experience, "restructuring" the likes of Crowns' massive riverside Melbourne gambling mecca, that will come in handy with his new role as the head of Sky City.

Sky City's business units all need a good sorting out, they are over-laden with middle management and there is plenty of fat to trim and Morrison's appointment looks to be one of managements best decisions in some time. Morrison's reputation for sorting out Crown can be seen as an indication of the direction that Sky City will be going over the short to medium term.
Part of Sky City Darwin Casino, one of the better performing
casinos in the gaming group.

Adelaide Casino needs a close look and will be kept and "refocused", as does the Auckland flagship casino, Sky Citys' chief money spinner. Previously the company talked of selling the Adelaide Casino.

Sky City Cinemas are definitely for the chop and management have been remiss of late in informing shareholders as to a date when the cinemas will be sold, or if there is indeed a buyer.

The whole takeover process over the last 4 months has been complicated and disclosure to shareholders has been confusing, changeable and misleading at times.

It looks like the the promise of a takeover has come to an end and it is time to get down to the real business and Morrison must achieve the objective of rebuilding the company to its former glory.

Morrison's $NZ3.7 million remuneration package, with around a third made up of "bonus" shares and lets hope it is results based, is generous, and he should be given 12 months to see things materially start to change, if he makes the right decisions to begin with, and then we should judge his leadership.

For Sky City shareholders lets hope he does the business.

He takes up the reigns in March 2008.

: I own SKC shares in the Share Investor Portfolio

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