SKC - SkyCity

[Basil]

My view is that Sky city have been in lengthy, flagrant and egregious breech of their duty of care to visitors for many, many years on both sides of the Tasman.

Rather than a rap over the knuckles the regulators should have used a sledgehammer to break them and stripped them of their license to trade.

I suppose another $100m fine here and a name change to SIN CITY, ticker code SIN would be a barely tolerable outcome. 

[Waltzing]

Since we come from a family that has spent centuries at the race track i cant remeber anything but a wonderful time at the melborne cup and evenings at sky city auckland and have never been pressured to sitting at any tables.

and this was the great day of days ...  https://www.youtube.com/watch?v=3Nuk5OjNAXY

heres to you Sir T.

https://en.wikipedia.org/wiki/Empire_Rose

unfortunately these types of industries do attract some characters of ill repute but your never going to shut down betting its like the ..

https://www.youtube.com/watch?v=AAGIi62-sAU

[Teitei]

Since we come from a family that has spent centuries at the race track i cant remeber anything but a wonderful time at the melborne cup and evenings at sky city auckland and have never been pressured to sitting at any tables.

and this was the great day of days ...  https://www.youtube.com/watch?v=3Nuk5OjNAXY

heres to you Sir T.

https://en.wikipedia.org/wiki/Empire_Rose

unfortunately these types of industries do attract some characters of ill repute but your never going to shut down betting its like the ..

https://www.youtube.com/watch?v=AAGIi62-sAU

Likewise I have had some great times at Sky City over the years. Never gambled over $100 and the restaurants and entertainment are rather good.

It's all about discipline and knowing one's own limits.

NZ should really ban pubs given the number of deaths & serious injuries attributable to drink driving after patrons indulge themselves at said establishments?

Casinos like Sky City do need to up their game and fully meet their regulatory & compliance requirements however. It is good for the long term viability of the industry.

[Waltzing]

FBU handing over the hotel shortly and the convention centre later in the year...

Will be interested to see the final result and perhaps just in time for the world returning to travel with some airlines place some very big orders for planes..

https://www.reuters.com/business/aerospace-defense/boeing-sets-record-737-production-goal-july-2025-sources-2023-10-03/

Travellers from all over the world will come... built it and they will come.

[Teitei]

FBU handing over the hotel shortly and the convention centre later in the year...

Will be interested to see the final result and perhaps just in time for the world returning to travel with some airlines place some very big orders for planes..

https://www.reuters.com/business/aerospace-defense/boeing-sets-record-737-production-goal-july-2025-sources-2023-10-03/

World has already reopened and travel is booming.

Sky City has unable to capitalise as much due to the 5 years delay in opening the NZICC.

[Waltzing]

Tourism and travel numbers .. perhaps should be on the AIR thread but think SKC need to move in this direction and focus a bit less on pure gambling.

https://aci.aero/2023/09/27/latest-air-travel-outlook-reveals-2024-to-be-a-milestone-for-global-passenger-traffic/#:~:text=Global%20passenger%20volume%20in%202023,94.2%25%20of%20the%202019%20level.

[Waltzing]

https://www.stuff.co.nz/business/350175812/department-internal-affairs-bring-case-against-skycity

[kiwi2007]

We lower our fair value estimate for shares in SkyCity by 6% to NZD 3.30 (AUD 3.10) due to a structurally higher compliance cost base and higher-than-expected one-off fines. Interim fiscal 2024 underlying EBITDA fell 10% on the previous corresponding period to NZD 146 million—broadly in line with our unchanged NZD 289 million forecast. The weaker discretionary spending environment is seeing a reduction in spending by the mass market, weighing on casino earnings, particularly gaming machine play. But shares continue to screen undervalued. We think the market is overly concerned by regulatory headwinds, overlooking SkyCity's strong earnings potential. We forecast a five-year EPS CAGR of 7% over the next five years, underpinned by the recovery from the current cyclical downturn and a solid performance from the core Auckland property, which underpins the firm's narrow economic moat.

The full-year EBITDA guidance of NZD 290 million to NZD 310 million remains intact. While our fiscal 2024 forecast is below the guidance range, our estimate includes the 10-day closure of SkyCity's New Zealand properties with an EBITDA hit of about NZD 20 million. The guidance does not include the impact of shutdowns. We expect SkyCity's New Zealand casino license to be suspended for 10 days in fiscal 2024 after New Zealand's Department of Internal Affairs alleged SkyCity failed to comply with its regulatory obligation to monitor continuous play by a customer between 2017 and 2021.

The reduction in our valuation is mainly due to mounting regulatory costs. The firm increased its Austrac penalty estimate to NZD 79 million versus our NZD 50 million estimate. A penalty hearing is set for June 7, 2024. Further, we expect civil proceedings in New Zealand to result in the aggregate maximum penalty of NZD 8 million. The failings in both matters are mainly historical.

MorningStar.

[Plata]

Where is the growth story here. Sure it is on a low PE but I don't think EPS has growth 7% over the past 5 years, even with inflation over 4% for most of that time period. I would think the investment case for many hinges on how impactful the convention centre will be once built?

[Waltzing]

" growth story here"

there isnt one ... its going to be a very slow grind ... inflation hitting retail and hospitality for a few years to come.

NZRB could be the last to lower the OCR.  SKC and other NZ public companies with AUS investments must now hope AUS keeps them going.

2026? before you see some headway?

Same goes for a lot of NZ listed business...

If you have some gardening to do then the next 2 years will be perfect time to get those job done including any DIY..

[Waltzing]

Imagine having AI access to betting at the track side !.....

Track betting could see a whole new generation of gee gee followers all holding the smart phones in one hand and champagne in another?

will you be able to take it to the betting table!!!!

In your smart glasses!!!!

https://www.bbc.com/news/business-68304137

Having read the amount of stuff the casinos need to do to keep people safe wonder if Track side has anything like the problems that the WOKE society has placed on these companies. The amount of hand holding looks way beyond what is practical... its just silly.. its gone mad.

[KW]

https://www.afr.com/companies/games-and-wagering/another-casino-operator-is-in-trouble-nobody-is-talking-about-it-20240419-p5fl81
(brief extract from article)
About the best thing you can say about SkyCity Entertainment, the owner of casinos in Adelaide and Auckland, is that it is not Star Entertainment, its rival gaming operator which is in the midst of a slow motion train wreck courtesy of NSW regulators.  But that's about it. At any other time, SkyCity's financial and strategic underperformance would be the subject of harsh scrutiny and vocal upset from investors.

SkyCity, the ASX and New Zealand-listed company which also runs Off Broadway casinos in Hamilton and Queenstown, is struggling to attract customers and lenders in an increasingly unforgiving regulatory environment.  SkyCity's Adelaide casino has been refurbished, but the company faces allegations it allowed billions of dollars of dirty money to be washed through its operations.

The most worrying sign for SkyCity shareholders is the attitude of its banks. Sources close to the casino group, not authorised to speak publicly about the matter, say that the company is having trouble convincing lenders to loan it money.  The main lender in question – according to the sources – is Commonwealth Bank, which has expressed an unwillingness to loan any more money. CBA declined to comment. SkyCity declined requests to comment about its strategy or financial performance.
The reluctance from lenders can be overcome. If it isn't, however, it could become a serious problem for a company that is facing millions of dollars in prospective penalties from regulators for its own wrongdoings. It's not hard to see why the company is struggling to find someone to advocate on its behalf. Operating in a strict regulatory environment is one thing – doing so without a leadership team is another.

Like Star and Crown, SkyCity has struggled to attract punters, or get them to spend the same amounts of money they did when the economy was more robust. Loss of revenue combined with regulatory challenges puts SkyCity in a difficult position.
As of June, SkyCity's net debt was NZ$443 million – it said it also had NZ$390 million in undrawn debt.  Assets sales must, at the very least, be a subject of discussion among those executives that are hanging around. On the other hand, it could be hard to find a buyer who would pay anything like middle-dollar for an asset with as many barnacles as Adelaide.

[Waltzing]

Dont forget inflation ... DIV will be under pressure for a few years to come... reminds one of the GFC... would not be surprised to see the DIV reduced or even ..... suspended for 12 months to cover some costs..

expect tourism to pick up and people have short memories... they will be ready to party again in a few years time...

people always are ...

"Despite the imposition of these additional costs, SkyCity's underlying FY24 Group EBITDA is still expected to be between NZ$290 million and NZ$310 million and underlying FY24 Group NPAT is expected to be between NZ$125 million and NZ$135 million."

be inetresting to see how this plays out ...

dont forget https://www.nzicc.co.nz/news

it might actually be used for something... you never know..

yes they are lining up to talk ... MILK!!!!

https://www.nzicc.co.nz/auckland-wins-world-dairy-summit

Might not be any media left to cover it ... you will have to take you own camera ...  live streaming on  COW channel!!!





 

[Hectorplains]

Dont forget inflation ... DIV will be under pressure for a few years to come... reminds one of the GFC... would not be surprised to see the DIV reduced or even ..... suspended for 12 months to cover some costs..

expect tourism to pick up and people have short memories... they will be ready to party again in a few years time...

people always are ...

"Despite the imposition of these additional costs, SkyCity's underlying FY24 Group EBITDA is still expected to be between NZ$290 million and NZ$310 million and underlying FY24 Group NPAT is expected to be between NZ$125 million and NZ$135 million."

be inetresting to see how this plays out ...

dont forget https://www.nzicc.co.nz/news

it might actually be used for something... you never know..

yes they are lining up to talk ... MILK!!!!

https://www.nzicc.co.nz/auckland-wins-world-dairy-summit

Might not be any media left to cover it ... you will have to take you own camera ...  live streaming on  COW channel!!!
 

Sky looking like a dividend trap you reckon, Waltz?

[Waltzing]

well who really knows but it always seems to bounce up a few dollars and then something hits it...

It looks to be a stock to trade and dump... then wait for the next calamity...

Its got some nice assets though and they look to have kept there license to print money...

inflation is its enemy, official compliance and border closures.

Its a trading stock.

be interesting to see how many booze ups , sorry milking drinking style get to gethers come along.

There is a big get together of wine growers in TOP of the North this year. People do like to come to NZ as long as NZ can get its WILD west under control.

https://winepro.co.nz/