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
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c Share Investor 2010
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:-)
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ReplyDeleteCopying is the most sincere form of flattery though...
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You have a cogent answer for everything SB :)
ReplyDelete