re: skycity entertainment group limited (skc)...
TRANSCRIPT
SKYCITY Entertainment Group Limited Federal House 86 Federal Street PO Box 6443 Wellesley Street Auckland New Zealand
Telephone +64 (0)9 363 6141 Facsimile +64 (0)9 363 6140 www.skycitygroup.co.nz
18 October 2013 Listed Company Relations NZX Limited Level 2, NZX Centre 11 Cable Street WELLINGTON RE: SKYCITY ENTERTAINMENT GROUP LIMITED (SKC)
ANNUAL MEETING OF SHAREHOLDERS Please find attached the following prepared announcements that will be delivered at the company’s annual meeting of shareholders to be held at 10.00am today: (a) Chairman’s Address; and (b) Chief Executive Officer’s Presentation. Copies of these announcements will be available from SKYCITY’s website later today. Yours faithfully Peter Treacy Company Secretary
Chairman’s Address: Chris Moller Moving now to my chairman’s address for 2013. It is my pleasure to review SKYCITY’s annual result with you, our shareholders and capital note holders, as Chairman for the first time. I am certainly appreciative of the fact that I took up the role of Chairman having already served on the Board for 4 years because, ladies and gentlemen, 2012/13 has been a very busy year in this Company’s proud history. If you are a believer in “to do” lists, as I am, then this was a year in which a number of significant tasks, or more accurately, milestones were knocked off. And the Board is in no doubt that those initiatives have set SKYCITY up for the future. We successfully consolidated our long-term partnerships with governments on both sides of the Tasman by negotiating agreements for our two major projects in Auckland and Adelaide. After years of negotiations, we sold our interest in the Christchurch Casino to Skyline and in exchange purchased the remaining 40 percent share in the Queenstown Casino from them that we did not already own. We also acquired the Wharf Casino in Queenstown from Lasseters meaning that we now have a consolidated and integrated presence in one of New Zealand’s iconic tourism destinations. In Darwin we opened our new 40 million Australian dollar Lagoon resort, which this month won the “Best Redeveloped Hotel” award in the Australian Hotel Association’s National Awards for Excellence. And our International Business performed strongly, with turnover growing from 4.4 billion dollars to 5.7 billion dollars, an increase of 29%, proving that the investments that we have made in that business over the past few years were appropriately founded and well timed.
2012/13 was a year in which we did a lot and yet, putting aside the strong returns from Rugby World Cup 2011 in the previous year, the intensity of planning for tomorrow did not distract the business from continuing to deliver good results for shareholders this year. It is no mean feat to meet expectations in the present whilst, at the same time, readying the business for what the Board believes will prove to be generational changes for the future. And yet if you look at most of the financial metrics we report on, that has been achieved. Granted, reported net profit after tax was down on last year. But there were a number of mitigating factors. As I said, we didn’t have the benefit of the Rugby World Cup 2011 this year. Selling our interest in Christchurch Casino meant that the net profit after tax generated by that business was not included in our second half results. And the Australian dollar lost ground this year, which all but offset the strong operating performance gains we made across the Tasman, particularly in Darwin, when the results were converted to New Zealand dollars. Nevertheless, our base business remains strong. And perhaps the best indicator of that is that if the result is adjusted for these three factors, normalised net profit after tax for the year would have increased by 2.6 percent. This is not to ponder on what might have been but rather to endeavour to assure you that we are working hard to achieve earnings growth at the same time as we future proof and reposition the business. The upward revision of our dividend policy, the reactivation of the Dividend Reinvestment Plan and this year’s total payout of 20 cents per share in dividends
are clear signals that we are committed to delivering shareholders competitive returns. Also, over the last financial year, the SKYCITY share price reached new 5 years highs of 4 dollars 50 in New Zealand and 3 dollars 80 in Australia. As Rod McGeoch observed last year in his address to you, the assets that we developed for the Rugby World Cup have continued to draw in the crowds. And those attractions are now generating new opportunities. We are committed to the cities we are part of. And that commitment expresses itself in long term plans and in ideas that are sometimes years ahead of their time. Here in Auckland we have continued to develop Federal Street as the culinary destination centre of the city. Cast your mind back just a few years and the area was little more than a right-of-way. Today, we have world-class chefs offering amazing and diverse food at everything from street level to more than 50 stories up. That in turn has dramatically changed the profile of visitors to the area. And those influxes of diners, players and visitors are generating new jobs and new business for us and for others. With the New Zealand International Convention Centre, we will have the opportunity to further consolidate and add to the attractiveness of both our front and back yards. That investment will significantly increase the foot traffic year round, bringing the critical mass we need to endorse the SKYCITY precinct as the city’s entertainment hub. And it will stimulate economic growth in Auckland and across New Zealand.
It will also enable us to compete meaningfully for a share of the world’s large-scale conferences, exhibitions and events. Our investments in Queenstown are of a much smaller scale but they are equally focused on our future. Having venues in Queenstown enables us, not just to align our VIP offerings nationally, but also to offer distinctly New Zealand gaming experiences to our high roller visitors with experiences such as wineries, skiing, golf, fishing and adventure sports that they simply cannot get in Macau, Singapore or Australia. Again, our reinvigorated presence in Queenstown will serve ourselves and the economy well. It is good for local operators, for Queenstown’s own regional economy and for the country because it gives lucrative tourism visitors great reasons to come to New Zealand and to stay longer. Across the Tasman, the city of Adelaide is on the cusp of an extraordinary transformation. And again, through careful planning, we are at the epicentre of the transformation as five billion dollars is spent around us on developments along the Torrens River bank and the Adelaide Oval that will redefine and rejuvenate the inner city. Our proposed new 6-star boutique hotel, VIP gaming and signature restaurants will, in similar manner to Auckland, put our distinctive stamp on an integrated entertainment complex that both Adelaide and you, our shareholders, will be truly proud of. These investments are big calls, ladies and gentlemen. But the casino industry is a highly competitive business where customers are competed for globally.
And, in truth, most initiatives that seek to secure and grow the future of the business appear challenging at first. Our investments in Darwin and in our International Business may well have appeared ambitious to some at the time. And yet now, the feedback we are getting from that resort, from the awards we are winning and the strong growth that we continue to enjoy in our International Business, show that well-timed, focussed investments based on customer need and clear differentiation from competing offerings will generate attractive earnings streams. Our successes in procuring the agreements in Auckland and Adelaide this year are testament to the fact that, not only do we have a crucial role to play in the redevelopment and marketing of cities, but that we have the trust and the confidence of governments. As I have said, we want to grow the cities we are part of. And we will do so with gusto providing that you, our shareholders, are rewarded with the prospect of satisfactory returns. However no business can afford to downplay or ignore its social responsibilities. It too is a crucial part of our commitment to the places we do business in. It is also critical to maintaining strong and healthy relationships with government. As an entertainment provider, we are scrutinised more harshly than most regarding our commitment to care for our customers, employees and communities. Our Corporate Social Responsibility programme and our commitment to care is how we earn our social licence to operate. I cannot emphasise strongly enough how seriously this matter is taken by both the Board and SKYCITY management.
Indeed we have a Corporate Social Responsibility Committee, chaired by Director Peter Cullinane, which reports directly to the Board. We have also worked steadfastly, since our inception 19 years ago, to develop a host responsibility programme that leads the world. And, despite the naysayers, we are very proud of it and what it has achieved. This is of course my first opportunity as Chairman to thank Nigel Morrison and his Executive Management team for the good work that they do. Once again, Nigel has led the company through a year where much needed to be achieved and resolved. Indeed, not to put too fine a point on it, Nigel and the team, have in my opinion, nailed it. The challenges of getting the Auckland and Adelaide projects across the line with satisfactory potential returns for shareholders and resolving the Christchurch and Queenstown ownership issues should not be underestimated. And Nigel and the team deserve great credit for these accomplishments. On behalf of the Board I would also like to thank and acknowledge all the staff, who work tirelessly right across our business every day to entertain and serve our customers. I also wish to thank my fellow Directors for their acumen and dedication in steering us through a very full 12 months. As we look ahead, the pace shows no signs of slowing and the challenges of achieving growth have not diminished. We will continue to look for ways to secure our future and to gain efficiencies where we can. We will invest in our offerings to maximise competitiveness and returns.
And we will embark on designing and planning bold new ventures here in Auckland and in Adelaide with our government partners, without losing focus on our existing core businesses. As we do so, we will do everything we can to deliver you acceptable returns.
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SKYCITYEntertainmentGroup Limited
Annual Meeting18 October 2013
Chi f E i ’ Chief Executive’s Annual Meeting Address 18 October 2013
Ni l M i
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NigelMorrison
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Annual Meeting – Overview
l hl h‐ FY13 Financial Highlights
‐ Total Shareholder Return
‐ Key Achievements
‐ Host Responsibility
SKYCITY and the Community
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‐ SKYCITY and the Community
‐ Other Achievements and Developments
‐ Trading and Operations Update
‐ Outlook and Focus for FY14
FY Fi i l FY13 Financial Highlights
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Normalised Results FY13 FY12 Movement$m $m $m %
Normalised Revenue (incl Gaming GST) 948.0 950.7 (2.7) (0.3%)
Normalised EBITDA 302 8 310 6 (7 8) (2 5%)
FY13 Result Overview
Normalised EBITDA 302.8 310.6 (7.8) (2.5%)
Normalised NPAT 136.3 141.4 (5.1) (3.6%)
Normalised EPS 23.6 cps 24.5 cps (0.9 cps) (3.7%)Reported Results
Reported Revenue (incl Gaming GST) 947.8 941.1 6.7 0.7%
Reported EBITDA 293 9 300 5 (6 6) (2 2%)
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Reported EBITDA 293.9 300.5 (6.6) (2.2%)
Reported NPAT 127.3 138.5 (11.2) (8.1%)
Reported EPS 22.1 cps 24.0 cps (1.9 cps) (7.9%)
Annual Dividend NZ$ cps 20.0 cps 17.0 cps 3.0 cps 17.6%
For illustrative purposes, converting Normalised NPAT to A$, FY13 Normalised NPAT would be A$119.2m vs FY12 A$108.5m, up 9.9%For illustrative purposes, converting Annual Dividend cps to A$, FY13 AUD17.5 cps vs FY12 AUD13.0 cps up 34.6%NZD/AUD cross‐rate ‐ FY13 converted at the 13th August 2013 rate of 0.8746 and FY12 converted at the 15th August 2012 rate of 0.7675
Revenue and EBITDA growth of 13.2% and 9.5% respectively in Darwin, following the opening of Lagoon Resort and Horizon Villas
IB Revenues grew from A$0.3m in FY12 to A$7.5m in FY13
Adelaide maintained a focus on costs and increased normalised EBITDA margin to 23 6% (FY12: 22 8%)
FY13 Result Overview – Highlights
Adelaide maintained a focus on costs and increased normalised EBITDA margin to 23.6% (FY12: 22.8%)
Auckland had reasonable revenue growth in:
F&B Revenues (+5.0%, excl RWC impact) from success of Federal Street
Hotels and Conventions, with revenue growth of 10.7% in 2H13
Tables Revenue growth in Auckland (+3.4%)
Group International Business performed well, with 29.5% turnover growth for the year, to $5.7 billion
S i f 6 i G i ( G l i $ ) l i i ll
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Strong win rate of 1.64% in Group IB in 2H13 (2H13 Group Actual win $45.9m) resulting in overall win rate at theoretical for the full year (1.35%)
In Auckland: IB gaming revenues now represent around 15% of total gaming revenues, compared to 5% in FY10
2H13 win rate of 1.9% resulted in Actual win of $36.9m, being some $10m in excess of the theoretical win, and 100% higher than Actual win in 2H12 ($18.3m)
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A softer performance in our Auckland business overall:
FY13 was always going to be challenging on the back of the RWC year
Compounded by a long hot summer in NZ in 2013
FY13 Result Overview – Disappointments
Q3 January‐March – underperformed compared to Q3 2012
Q4 April‐June – delivered revenue and EBITDA growth compared to Q4 2012
Hamilton’s results were softer in 2H13, on the back of the drought in the Waikato (impacting the
farming and dairy community)
The appreciation in the NZD against the AUD over the second half of the year, reduced (in NZD
terms) the strong performance in our Australian business, particularly Darwin
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) g p , p y
On a like‐for‐like basis and adjusted for the NZD currency appreciation Normalised NPAT grew 2.6%
In FY12, the RWC 2011 was held in NZ and positively impacted Normalised NPAT in that year by $4.7m
In December 2012 (in the FY13 year), the Group sold its 50% interest in Christchurch Casino for $80m
Like‐for‐like Currency Adjusted Normalised NPAT
( 3 y ), p 5
accordingly NPAT for 2H13 did not include the $3.1 m contribution that Christchurch delivered in the FY12 year
Appreciation of the NZD against the AUD in 2H13 from 0.7792 to 0.8170 (4.85%) reduced FY13 NPAT by $0.8 m
On a full year basis
adjusting for the 2011 RWC
8 1H13 adjusted to 1H12 Average NZD/AUD cross‐rate of 0.7835 (1H13 rate 0.7836) 2H13 adjusted to 2H12 Average NZD/AUD cross‐rate of 0.7792 (2H13 rate 0.8170)
the Christchurch Casino disposal and
constant currency
Normalised NPAT for FY13 would be $137.1 m compared to $133.6 m in FY12 on a like with like basis
an increase of 2.6%
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FY13 FY12 Movement
Interim 10.0 cps 9.0 cps 1.0 cps 11.1%
Final 10.0 cps 8.0 cps 2.0 cps 25.0%
Total Dividends 20.0 cps 17.0 cps 3.0 cps 17.6%
Increased Dividends
The final dividend of 10.0 cents per share increases the total dividend for the full year to 20.0 cents per share. This represents a 3.0 cps increase on FY12 (+17.6%)
The final dividend of 10 cents per share represents a 25% increase on the FY12 final dividend of 8 cents
based on a share price of $4.10, this is an annual gross dividend yield of 6.3% to NZ shareholders
The dividend is calculated in accordance with the previously announced policy of:
an annual dividend of not less than 20 cents per share and
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an annual dividend of not less than 20 cents per share, and
a dividend payout representing not less than 80% of Annual Normalised NPAT
The Dividend Reinvestment Plan was re‐activated for the FY13 final dividend without any discount. This was taken up by shareholders holding 21% of the shares in the company
SKYCITY is committed to retaining this dividend policy for shareholders, subject to maintaining our investment grade credit rating and giving priority to funding major strategic projects
Agreement with the New Zealand Government on the $402 million New Zealand International Convention Centre (“NZICC”)
Licence certainty to 2048
Tax certainty expansion regulatory concessions
Other Key Highlights in 2013
Tax certainty, expansion, regulatory concessions
Agreement with the South Australian Government
Licence exclusivity until 2035
Tax certainty, expansion, regulatory concessions
Christchurch Disposal
Sold 50% stake in Christchurch Casino for $80m
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Sold 50% stake in Christchurch Casino for $80m
Queenstown acquisitions
Acquired remaining 40% stake in SKYCITY Queenstown for $5m
Wharf Casino acquired from Lassetters for $5m
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T l Sh h ld Total Shareholder Return (TSR)
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Total Gross Performance Relative to NZX‐50Last 2 Years
50%
60%
+44%
10%
20%
30%
40%
Total R
eturn +33%
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-10%
0%
SKYCITY (NZX listing) NZX50
Data as at 11 Oct‐13. Assumes dividends are reinvested in equivalent amount of shares as at the ex‐dividend date. Rebased to SKC at the beginning of the periodSource: Capital IQ
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Total Gross Performance Relative to ASX‐200Last 2 Years
50%
60%
+49%
10%
20%
30%
40%
Total R
eturn
+36%
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-10%
0%
SKYCITY (ASX Listing) ASX200
Data as at 11 Oct‐13. Assumes dividends are reinvested in equivalent amount of shares as at the ex‐dividend date. Rebased to SKC at the beginning of the period Source: Capital IQ
K A hiKey Achievements‐ NZICC Agreement‐ Adelaide Agreements
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Signed the $402m NZICC Agreement with the NZ Government on 5 July 2013 – subject to the enabling legislation passing through Parliament – expected this calendar year
This follows extensive public scrutiny and consultation:
Auditor‐General report on Government’s bid process – cleared
The NZICC Agreement and Next Steps
Auditor‐General report on Government s bid process – cleared
Select committee process including public hearings
Parliamentary debate and questions to Ministers
Architect, design and other consultant appointments are well advanced – will be announced after legislation passing
Focus for 2014 will be:
proposed designs for consultation
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proposed designs for consultation
building works contract let
2015 – construction starts – creation of 1,000 jobs
Target completion date: September 2017
Full details of the NZICC Agreement were announced on 6 July 2013
SKYCITY will invest A$350m to transform the Adelaide Casino into a world‐class integrated
entertainment complex as part of the new entertainment precinct on the banks of the River
Torrens
The Adelaide Transformation
Will include:
Adelaide’s first 6 star boutique hotel
celebrity and signature restaurants
high‐quality local and interstate premium gaming rooms
world‐class VIP gaming experiences with ‘Horizon’ international suites with adjoining private
gaming salons
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SKYCITY’s investment will create much needed jobs and economic growth for South Australia
and complement the redeveloped Adelaide Oval and the new and expanded Adelaide
Convention Centre
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Following the agreement reached with SA Government on December 2012 and the subsequent
passing of the enabling legislation in August 2013, final agreements were signed last Friday in
Adelaide with the Premier Hon. Jay Weatherill and Deputy Premier Hon. John Rau, (new Approved
Licensing Agreement and a new Casino Duty Agreement)
What Adelaide Agreement means for SKYCITY
These create certainty and capacity for SKYCITY to compete and grow:
extension of exclusive SA licence for a further 20 years out to 2035
reduced premium and VIP tax rates
tax rate certainty
additional 505 electronic gaming machines (to 1,500)
extra 100 gaming tables (to 200)
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of which 15 may be convertible to automated table games (300 stations)
ticket in ticket out (TITO) in Premium gaming rooms
card based cashless gaming throughout
This enables us to compete against our peers in Australia for the first time on a level playing field attracting the interstate and international markets
SKYCITY’s new Adelaide Development
18 Artists impression
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Net debt at 30 September 2013 is $598m. Available committed, undrawn bank facilities total $380m
Extension of the $200m syndicated bank facility from June 2016 to October 2018
At 30 September 2013, average debt maturity is 4.5 years (similar levels to 30 September 2012)
f f f
Well Funded for Future Growth
Currently only $56m of the $150m Capital Notes are issued, leaving $94m in Treasury Stock for future issue
SKYCITY holds a Standard and Poor’s Investment grade rating of BBB‐ (Stable outlook)
Existing available funding facilities total $474m (being undrawn bank facilities and Treasury Stock)
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H R ibiliHost Responsibility
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SKYCITY is committed to providing a safe environment for anyone who comes to work, stay or be
entertained at SKYCITY
The SKYCITY Board and Senior Management take our host responsibility obligations very seriously.
P t C lli h i C t S i l R ibilit B d b itt
SKYCITY’s Host Responsibility
Peter Cullinane chairs our Corporate Social Responsibility Board sub‐committee
SKYCITY Auckland has the most comprehensive host responsibility programme in NZ and it is
considered world‐leading by experts
We spend more than $5m annually in Auckland on customer care and host responsibility
It is central to what we do every day and we invest significant resources into ensuring our
venues are as safe as possible for all our customers
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venues are as safe as possible for all our customers
Latest Ministry of Health research shows the prevalence rate for problem gambling has declined
from 0.4 per cent to 0.3 per cent of the population compared to:
smoking at 20 per cent, and
hazardous drinking at nearly 18 per cent
The Facts
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Department of Internal Affairs figures show as at 30 June 2013, New Zealand had a total of 20,360
gaming machines:
17,534, or 86 per cent, of these are in these in pubs and clubs across New Zealand
only 2,826 or 14 per cent were located in casinos
Latest Ministry of Health intervention client data shows that the majority of problem gambling
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related presentations to counselling agencies relate to the following:
56% gaming machines in pub and club gambling venues
12% lotteries
9% racing
8% casino gaming machines across New Zealand
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“Collectively the responsible gambling measures provided in both Australia and New Zealand are more rigorous than anything offered in the United States, The United Kingdom and Asia”. “SKYCITY’s programme would be considered of a higher standard than what is offered in other casinos in Australia”.
SKYCITY is World Leading – Expert opinions
Associate Professor Dr Paul Delfabbro, University of Adelaide
Submission to New Zealand Gambling Commission 2013
“Dr Delfabbro’s report makes it clear that New Zealand is leading the world in this area and both the current HRP and revised HRP approved in this decision are products of an evaluation process which is thorough and independent”.
New Zealand Gambling Commission, GC21/13, 2013
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“No other casino in the world has introduced facial recognition technology, electronic monitoring and ‘pre‐commitment’ to time and/or expenditure limits together. It is ground‐breaking and could raise the bar across all gambling settings and forms”.
Professor Max Abbott, AUT University, Media Release 25‐06‐2013
The new host responsibility initiatives being introduced by
SKYCITY, under the NZICC Agreement include:
doubling the number of full‐time Host Responsibility staff
in Auckland, providing dedicated Host Responsibility staff
New Host Responsibility Measures
, p g p y
onsite at all times, 24/7
introducing predictive modelling technology which
analyses player data to help identify customers most at
risk from gambling harm
continuing to roll out SKYCITY’s Pre‐commitment
Programme allowing every gaming machine customer to
set both the time and the amount they wish to spend over
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a given period
trial the use of further measures, including facial
recognition technology, to identify and prevent barred
problem gamblers from gaining entry to the Auckland
casino
Artists impression
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SKYCITY d h SKYCITY and the Community
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SKYCITY is a major contributor to the local and national
economies and New Zealand and Australian Tourism
We employ more than 6,500 employees across New Zealand
and Australia
SKYCITY’s Economic and Tourism Contribution
and Australia
Our 4,000 New Zealand staff earn salaries and wages of
approximately $150m each year
The largest private sector employer in the Auckland CBD,
employing 3,500 Aucklanders
Taxes payable of over $160m to central government in FY13
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The biggest ratepayer in the Auckland CBD – $4.3m for FY13
Bringing new award winning restaurants to Auckland – The Grill,
The Depot – and now The Sugar Club, The Federal Deli, Masu
Our International Business earned Tourism Export Income for
New Zealand this year of $55.0m up from $16.5m 3 years ago
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In addition to the SKYCITY Community Trusts funding in
Auckland, Hamilton and Queenstown which has provided
more than $37.2m in funding to thousands of community
groups and programmes, we also directly provide support to
SKYCITY – Key Charity Partnerships
g p p g y p pp
a range of key charities, including:
Variety the Children’s Charity – new Variety of Chefs
event
Leukaemia Blood Cancer NZ – raised $800,000 this year
through fundraising events at SKYCITY
Kidz First Children’s Hospital – Christmas Party
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Prostate Cancer Foundation
NZ Breast Cancer Foundation
Auckland RSA – Poppy Partnership – new for 2013
A Focus on Trans‐Tasman Competitions
SKYCITY Breakers – three peat champions 2012/13 –
renewed sponsorship for a further 3 more years
SKYCITY – Key Community Sponsorships
Vodafone Warriors – renewed sponsorship for a
further 2 more years
X Factor NZ – highest rating programme in TV3 history –
1 million+ viewers each show
2013 Adelaide Casino Adelaide Cup
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O h A hi Other Achievements and Developments
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SKYCITY Grand Hotel has won 2 significant industry
awards:
World Travel Awards 2013 New Zealand’s Leading
Business Hotel
SKYCITY Grand Hotel – Awards & Refurbishment
Business Hotel
Trip Advisor – Certificate of Excellence 2013
SKYCITY Grand Hotel refurbishment of Premium Luxury
Rooms underway
first 5 floors to be completed mid‐April
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Our Federal St Dining Precinct continues to be successful:
The Grill by Sean Connolly – two chef’s hats at Cuisine Magazine’s Good Food Awards 2013
Depot – awarded Metro magazine’s Best Casual Bistro
Federal Street Dining Precinct
Depot – awarded Metro magazine s Best Casual Bistro 2013, won one chef’s hat at Cuisine Magazine’s Good Food Awards 2013
Three new restaurants opened with celebrity chefs in past 3 months
Federal Street shared space – $10m co‐investment with A kl d C il
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Auckland Council
The Sugar Club – opened August 2013
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Federal Delicatessen – opened September 2013
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Masu – opened October 2013
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SKYCITY Darwin’s Lagoon Resort won
Australia’s Best Redeveloped Hotel in
SKYCITY Darwin
Australian Hotels Association (AHA)
Awards for Excellence 2013
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T di d Trading and Operations Update
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New Zealand
Auckland revenues of $145.9m are up 3.8% ($5.3m), due to: modest growth in core local gaming revenues, non‐gaming revenues being flat, but continued strong
International Business revenue growth
The softness experienced in 2H13 in Hamilton has continued into 1H14, with revenues down $2.4m
Year to Date Trading – Overview
p 3 4, $ 4
Queenstown has started the year strongly, both in local and International Business revenues, up over 70%
Total NZ Revenues of $165.2m are up 2.9% ($4.7m), reflecting the Auckland result as above
Australia
Total Australian revenues of A$90.3m are flat on prior year, with growth in Darwin being offset by some softness in Adelaide
Darwin continues to benefit from investment in the Lagoon Resort and improved gaming facilities
Adelaide visitation is soft compared to prior year, as a number of the main railway lines at the train station
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adjacent to the property remain closed for electrification – expect to re‐open by December 2013
Group Overall
For the period 1 July 2013 to 13 October 2013, Group Normalised Revenues on a constant currency basis are up 1.7% from $276.5m to $281.2m however, taking the significant $12.5m movement in NZ$/A$ (0.78 to 0.87) into account
Normalised Revenues at actual currency are down 2.8%, from $276.5m to $268.7m
YTD Group Revenue to 13th October (incl Gaming GST)
New Zealand Casinos
■ Auckland 145.9 140.6 5.3 3.8%
■ Hamilton 14.7 17.2 (2.4) (14.2%)
FY14 FY131 Jul - 13 Oct Movement
1 Jul - 13 Oct 1 Jul - 13 Oct
$m $m $m %
■ Queenstown 4.2 2.4 1.9 78.4%
■ Other 0.4 0.3 0.0 4.8%
Total New Zealand 165.2 160.5 4.7 2.9%
Australian Casinos
■ Adelaide (A$) 46.6 48.4 (1.8) (3.7%)
■ Darwin (A$) 43.7 41.9 1.8 4.3%
Total Australia (A$) 90.3 90.3 0.0 0.0%
Total Australia at LY fx rate 0.7809 (NZ$) 116.0 116.0 0.0 0.0%
Normalised Revenue at constant currency (NZ$) 281.2 276.5 4.7 1.7%
38 In constant currency section FY14 1 Jul – 13 Oct adjusted to LY fx rate of 0.7809 Current actual YTD FY14 fx rate of 0.8720
Exchange rate impact at CY fx rate 0.8720 (12.5) (12.5)
Normalised Revenue at actual currency (NZ$) 268.7 276.5 (7.8) (2.8%)
Adjust International Business to actual win rate 3.3 (11.3) 14.6
Christchurch - 1.8 (1.8)
Reported Revenue at actual currency (NZ$) 271.9 267.0 5.0 1.9%
Normalised Revenue in AUD at actual currency (A$) 234.2 215.3 18.8 8.7%
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F d O l k Focus and Outlook for FY14
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New Zealand
Focus on growing Auckland’s hospitality, tourism and gaming business through revenue initiatives and improved cost management
Continue to grow our International gaming Business, both VIP tables and EGMs
Awaiting Parliament’s decision on the NZICC Bill anticipated by December 2013 Appoint design and project
Focus for FY14
Awaiting Parliament s decision on the NZICC Bill, anticipated by December 2013. Appoint design and project management teams, progress design works
Australia
Adelaide – with the passing of the enabling legislation in July, and having now executed the new ALA and CDA agreements with the SA Government, commence interim capex works to activate VIP product and tax rate concessions in the second half of FY2014
Darwin – continue to drive revenue growth from new gaming, hotel and conventions/events facilities
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International Business
With our new Executive VP International, Craig Ashton, continue to grow International Business in Auckland, further activate “Horizon” in Queenstown and drive growth in our new “Horizon” Salons in Darwin
Other
Continue to stay abreast of regional casino developments and opportunities that may lead to shareholder accretive opportunities and transactions
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Management expects to continue to deliver revenue growth in the underlying business
Currently, the most significant factors that will continue to impact the FY14 result are:
negative foreign currency translation effect of the strong NZD versus AUD: currently NZ$/A$ 0 882 versus 0 800 in FY13 (a 10 25% negative impact on AUD earnings
Outlook for FY14
currently NZ$/A$ 0.882, versus 0.800 in FY13 (a 10.25% negative impact on AUD earnings translated into NZD)
macro economic conditions in New Zealand, which are showing some (but not consistent) positive signs
continued challenging economic conditions in Australia, in particular in South Australia
Adelaide Casino trading improvement once the agreed reforms become effective in 2H14 –now likely to have minimal EBITDA impact in FY14 due to timing of reforms, capex and new systems implementation
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ongoing positive momentum and growth in the International Business
Management will release 1H14 results on 12 February 2014, at which time further guidance on the FY14 result will be provided
All information included in this presentation is provided as at 18 October 2013.
Reconciliation of Reported Revenue to Normalised Revenue
Gaming Revenue figures reflect gaming win (inclusive of gaming GST). This facilitates Australasian comparisons and is consistent with the treatment adopted by major Australian casinos
Disclaimer
Non‐gaming Revenues are net of GST
Total Revenues are gaming win plus Non‐gaming Revenues
Reported revenue reflects actual International Business win rate while normalised revenue shows International Business at the theoretical win rate of 1.35%.
Normalisation adjustments have been calculated in a consistent manner with prior periods.
The presentation includes a number of forward‐looking statements. Forward looking statements, by their nature, involve inherent risks and uncertainties. Many of those risks and uncertainties are matters which are beyond SKYCITY’s control and could cause actual results to differ from those predicted. Variations could either be materially positive or materially
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ff f p y p ynegative.
This presentation has not taken into account any particular investor’s investment objectives or other circumstances. Investors are encouraged to make an independent assessment of SKYCITY.