Photo: RNZ / Marika Khabazi
- SkyCity Entertainment battling economic odds
- Revenue still dampened by reduced consumer spending
- Retains full year underlying operating earnings forecast $245m to $265m
- Move to mandatory carded play expected to hit revenue by 10-15 percent
- No dividend this financial year
Casino company SkyCity said it's still battling the odds with revenue dampened by the slow economy, with another hit in prospect, as dividends remain off the table for now.
Shareholders at the annual meeting heard the company, which operates three casinos in New Zealand and one in South Australia, was still feeling the effects of the economic downturn and regulatory costs.
Chair Julian Cook told the meeting of sometimes disgruntled investors that the board was confident the company's luck would change.
"The board's view is that business prospects will improve as we work through the regulatory improvement programmes, as the NZICC (New Zealand International Convention Centre) and Horizon hotel begin to contribute to earnings, and as we see the benefit of an improvement in trading conditions into 2025."
He said the suspension of dividends to preserve cash in the face of asset writedowns, weak trading, and hefty regulatory costs was a "disappointing outcome", and the company would look to restore payouts as soon as it was "prudent".
Playing by the rules
Cook said SkyCity had done an unacceptable job in meeting its regulatory obligations under harm minimisation and anti-money laundering rules (AML/CFT), which resulted in big penalties on both sides of the Tasman, and a five day shutdown of the flagship Auckland casino.
He said the company had overhauled its systems, hired more staff, and changed its approach.
"Our culture will put compliance ahead of profits."
Cook said the move to mandatory carded play from mid-July in New Zealand and next year in its Adelaide casino would further improve rule compliance.
The cards can be used to set limits on how much can be gambled and how long a person can play, with SkyCity imposing a "no card, no play" approach.
"It will significantly increase out visibility and control of play, and simplify many parts of our current AML/CFT and host responsibility," Cook said.
Our luck will change
Newly installed chief executive Jason Walbridge said falling interest rates were hoped to perk up consumer spending but activity was expected to remain subdued for the rest of the trading year, although gaming table revenues were recovering.
"We are well positioned to take advantage of improvements in the economy, the opening of the New Zealand International Convention Centre (NZICC), and the growth of tourism we expect to see on the back of that."
The NZICC is due for completion next year and to open for business in 2026.
SkyCity is also readying for government approval of online casinos operating in New Zealand.