Tuesday, February 16, 2010

Sky City Entertainment Group 2010 Interim Profit Review

One of the best results this reporting season, so far was the interim 2010 profit for the six months ended 31 December 2009 for Sky City Entertainment Group Ltd [SKC.NZ] which was revealed this morning.

While most companies that have already reported in February have recorded lower or stagnant profits, Sky City has delivered net profit of $NZ71 million for the half year, compared to $55 million for the first half last year - around 30% up on last year. A figure to be quite proud of if you are a shareholder, especially in these tough economic conditions.

Of particular interest to me was that this profit was produced on revenue that was up only 6%.

The increased profit has come mainly from cost savings due to much lower interest costs and from higher revenue from their Australian casinos. Their other properties in New Zealand were slightly up with the exception of the big money spinner, Auckland, which was even on last year.

The dividend, at 8c is down from 9c and pleasing to see more money being returned to pay down more debt.

The focus by Nigel Morrison in his next 12 months as CEO is continue to keep costs down, the efficient use of capital, maximising returns on existing assets and finding ways to grow revenue and profit rather than rely on savings in the business to get more bang for shareholders. As I mentioned above, this is especially true of the Auckland Casino where this asset has been in a lull revenue wise for several years and has more that can be squeezed out of it.

Company indications for the next 6 months of operations are to expect a $10-15 million increase on last years $115 million full year profit and for the company to operate in a "challenging environment". Nothing earth shattering about that but I think this will continue until well into 2011 when an impact on patronage from Rugby World Cup visitors kicks in.

Sky City shares were up 6c to NZ$3.19 on roughly double the normal volume traded, in a market up 28 points. Shares were initially up 12c this morning on the announcement.

Disclosure: I own SKC shares in the Share Investor Portfolio

Share Investor Interview

Share Investor Interview: Sky City CEO, Nigel Morrison

Sky City Profit Attachments

Result Briefing Webcast
2010 Interim Result Presentation
NZX Announcement

Sky City @ Share Investor

Are Insiders selling Sky City Stock?
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

Share Investor Forum -Discuss this topic

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