SkyCity Q1 revenue up 3pc

Casino operator SkyCity Entertainment Group says its first quarter group revenue, excluding its VIP and cinemas business, rose 3 percent from the same period of last year but said its outlook remained cautious.

Chief executive Nigel Morrison said revenue from SkyCity's flagship Auckland operations was down 2 percent. Nonetheless the company was pleased with the performance of the table games business and the refurbished main gaming floor.

Meanwhile, revenue at SkyCity's Australian casinos - in Darwin and Adelaide – which were still in a growth phase, rose 3 percent in Australian dollar terms.

SkyCity said although its quarterly results were "sound," the economic environment in New Zealand, in particular, was challenging and it was cautious in its outlook.

"The NZ economy is in recession with trading conditions far more challenging, yet in this very difficult environment, our casino and hospitality businesses are only down 2 percent for the quarter," said Morrison.

With the opening of a cinema complex in Manukau, South Auckland last month, Morrison said SkyCity Cinemas' revenue had increased year-to-date by 5 percent with its share of the Auckland box office market up to 64 percent from 55 percent. However, cinema revenue for the September quarter fell 1 percent.

For the June year SkyCity posted a 49 percent fall in annual group profit to $49.9 million after writing down the value of SkyCity Cinemas by $58.4 million.

Revenue from high rolling VIP casino customers was down 33 percent compared to the first quarter of last year, SkyCity said. However, half the 2008 win came in the first quarter. Furthermore, this year's first quarter "win" level was above budget.

"Lifting performance across every division in the business, optimising benefit from the Auckland refurbishment, completing the stage one investment in the Darwin business, coupled with strong control over capital expenditure, are key imperatives for SkyCity for the 2009 year," Morrison added.

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