Sky City Entertainment Group 2010 Full Year Profit Preview

Sky City Entertainment Group Ltd [SKC.NZ] announces its 2010 full year profit on Tuesday 17 of August and it is going to be a record one. The company itself has indicated a net profit ranging from $126-132 million but the market seems to be indicating - if its share price has anything to do with anything at all - that profit could be at the top of this range or higher. The share price has gained slightly more than 5% over the last month and it is typical of this stock (and probably most other NZX listed stocks) to rise if insiders know profit results are going to be higher than expected.

In May I gave some reasons why the August result would be a good one:

In addition to the continued cost savings through paying down debt and other business costs there will be a gross $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.

The market has reinforced my positive feeling that I got after interviewing CEO Nigel Morrison in mid June and my visit to the Auckland site and a good look around at how business was going on that particular day.

I have been a shareholder in SKC since 2003 and it makes up slightly more than one third of the Share Investor Portfolio and the August result is one of my most anticipated profit releases for this company for I think it will show how well the CEO has done since his appointment in March 2008.

In two years he has done well to turn the company around from the poor management of former CEO Evan Davies. One of the reasons he was hired because he was well known as a casino "Mr Fixit" and he has done what he was employed for and more.

I look forward to him telling us where the company is headed over the next year and what new strategies he might have to grow revenue and profit.


Disclosure: I own SKC shares in the Share Investor Portfolio


Sky City @ Share Investor

Chart of the Week: Sky City Entertainment Group Ltd
Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Share Investor Q & A: Sky City CEO, Nigel Morrison
Sky City Entertainment: CEO Nigel Morrison discusses 2010 HY
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
Sky City Entertainment Group Ltd: Download full Company analysis
Sky City 2010 full year profit looking good
Long Term View: Sky City Entertainment Group Ltd
Sky City Entertainment: CEO Nigel Morrison discusses 2010 Half Year
Sky City Entertainment Group 2010 Interim Profit Review
Sky City to focus on Gaming
Sky City debts levels now more manageable
Insider Trading on Sky City shares
Sky City Profit Upgrade: Always on the Cards
Sky City's Current Cinema "Boom" a Horror Story in Disguise
Stock of the Week: Sky City Entertainment Group
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
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

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) by Benjamin Graham
Buy new: $14.95 / Used from: $6.99
Usually ships in 24 hours




c Share Investor 2010