SKC the stock (from 9/3/04)

[winner69]

New thread seeing old one has generated into a slanging match not related to SKC

See price back to where it fell day after announcement re Darwin and still 13 cents below where it was when they announced they were talking about Darwin

So some would say that even at today's price you get SKC as it was .... and Darwin for free

Does this mean there is still significant upside?

[Happy]

Yeah Winner I'm with you. I sold down my BCA position to jump into SKC at 4.28 seemed an absolute bargain to me given the earnings and divis. Though tried to exit at 4.60 a few days later and just fell short so I'm holding.

[Binklebonk]

Was a lengthy article in today's Press by Roger Armstrong. He was bagging their acquistions as being mainly flops quoting Adelaide,Canbet,SLL,Qwt and now Darwin, although he did acknowledge that Hamilton was looking good.

[bongo66]

Care to post a link Bickle?

TIA, Bongo

[Nightmare]

quote:Originally posted by winner69

New thread seeing old one has generated into a slanging match not related to SKC

See price back to where it fell day after announcement re Darwin and still 13 cents below where it was when they announced they were talking about Darwin

So some would say that even at today's price you get SKC as it was .... and Darwin for free

Does this mean there is still significant upside?


No - this means that like Adelaide, Canbet, Force and Queenstown, the market sees Darwin subtracting value from SKC into the future. Remember that SKC will have to set aside at least $15m each year to renew the casino licence. [xx(]

The licence is not free and is renewable for a big fee onexpiry - unlike the National Government gaving it FREE to their Business Roundtable mates per the Sky City Auckland casino. :(

[winner69]

One of things that struck me in the numbers that SKC presented to analysts was that while Darwin revenues have grwon from $65M to $74M the infamous thing called EBITDA has remained at about $26M

Darwin has shown NO EBITDA growth over last 4 years - yes none, zilch ... but they had the temerity to go back to a base of 1996 and proudly say that EBITDA has grown at an annual rate of 19% since then.

At least they did own up and say that Darwin is going to run at a loss and that the acquisition does reduce eps (real eps as most of us know it). Maybe some synergies somewhere?

Suppose what you are saying nightmare is that while you can fool some most of the time you can't fool those who have the most dosh to invest ... and they are talking with their money at the mo.

Yes - it does seem to be a value destroying acquisition ... but SKC seem pretty proud that it diversfies their sales base (ie less dependent on NZ) but that seems a pretty costly exercise.

[Binklebonk]

quote:Originally posted by bongo66

Care to post a link Bickle?

TIA, Bongo


Sorry, haven't quite given up on old fashion newsprint despite E-age.

[winner69]

Guys - found the article for you. Seeing I found it the highlighted parts are my doing



Sky City's strategy raises questions


--------------------------------------------------------------------------------

Should the company invest further when it has a poor track record on the majority of diversifications away from its fanta

SKY CITY'S share price took two knocks last month, when it announced the purchase of the Darwin Casino and disappointed the market with a below-par profit result.

In effect, these two events built on each other, with the market quite properly asking: should Sky City invest further in Australia when its first casino purchase there has been a failure?

Or indeed, should the company invest further full-stop when it has a poor track record on the majority of diversifications away from its fantastic Auckland Casino business?

The latest interim profit of $55 million was only $1 million or so below market expectations, but importantly the shortfall was concentrated at Adelaide Casino, where operating profit fell slightly to $7.2 million. It was inferred the full-year profit would be lower than the A$15 million achieved last year.

In addition, the company basically said this was roughly as good as it would get at Adelaide without significant spending on upgrading the facilities. The problem is that the approximate $17 million annual operating profit out of Adelaide represents only a 7 per cent return on the $250 million of investment at that site.

With the operation having been worked on for about four years by Sky City it should be looking to earn the company's cost of capital, about double the rate of the current return.

If Sky City were to sell Adelaide Casino today, it would probably book a loss despite the fact that casino assets are more popular now than when Sky undertook its acquisition.

The bigger problem for Sky City is that it has a very patchy record on all its investment activities.

Its adventure in Internet gambling company Canbet has been a flop, with its 33 per cent stake, which cost about $23 million, worth about $5 million at current market prices.

Sky City Leisure (previously Force Corporation) was initially a disaster, but Sky City has hauled back its position through the underwriting of a capital notes issue. However, given the poor underlying profitability of this business in the first half of the year, Sky City's involvement would still have to be considered a failure.

The company's Queenstown investment is in loss, with the authorities for some reason deciding that Queenstown is the only place in New Zealand big enough for two casinos.

Sky City has improved its investment track record with the recently opened Hamilton Casino. The $50 million investment looks as though it will more than pay its way, booking a $4 million operating profit in the first half of the financial year.

As a newly opened casino, presumably there is still room for considerable improvement.

When a company has a very strong cashflow-producing business, it can keep shovelling the money to shareholders through dividends and returns of capital, it can reinvest the money back into the cashflow business, or it can go out and buy other businesses.

Generally speaking, management teams get more satisfaction out of spending the money on new acquisitions, while boards of directors are there to make sure the boring alternative of giving the money back to shareholders is given due consideration.

Sky City has passed much money on to shareholders, but Auckland Casino is such a good business that the company has still had the resources to expand.

The casino has managed to double profits during the past five years (about 15 per cent a year compound growth) from more or less a constant asset base. The result has been massive free cashflows.

One of the mistakes companies can make is to be so intent on investing the big cashflows coming from a star business that they forget to nurture this bus

[Nightmare]

Roger Armstrong has analysed the situation well - unlike the bs touchy feely 'Sky City is a great company' sickophonic postings by some of the characters on this site.

Auckland makes the money and the management pisses it down Adelaide, Darwin, Force Corp, Canbet, Queenstown and the sickophons shout 'more! more!'.

The day of reckoning will come ...:D:D:D

[kiwigold]

Nightmare/Matrix/sniper everyone knows you're jaundiced views about what you think of SKC .How many times do we have to hear it

[Liberty]

Do you think he is wrong, then kiwigold? If so, state your case.

I have found Nightmare's views on SKC are well-reasoned...

[Paddie]

Can't argue with your comment Liberty.:)

However Nightmare is I am sure Rawdata's brother.


Paddie[:p]

[winner69]

Does seem strange though spending $220M on something that, as Armstrong says, is hard to see how they plan to really make a buck from.

And what must be a concern (except for the believers) is that SKC management seem quite pleased they still have another $200M to spend

[CAM]

Hope management havn't got delusions of grandeur and are hell bent on building an empire just because they have the cashflow to borrow and buy

[bongo66]

quote:Originally posted by winner69

Does seem strange though spending $220M on something that, as Armstrong says, is hard to see how they plan to really make a buck from.

And what must be a concern (except for the believers) is that SKC management seem quite pleased they still have another $200M to spend




Winner, I think it is more like 300M:D

[winner69]

and more of the same

http://www.stuff.co.nz/stuff/0,2106,2845280a13,00.html

Large investors worry the casino operator isn't making a big enough splash across the Tasman, writes Garry Sheeran.

.... and the last paragraph gives the diehards another buying opportunity .. unless the Cullen Fund beats you to it

Other institutions were not so generous, with one indicating it would look closely at the number of Sky City shares it held

[bongo66]

Seems to me that brokers are talking it down in the media so as to pick up cheaper stock after they have recently unloaded some.

Please look to the long-term investors.


B

[Nightmare]

quote:Originally posted by bongo66

Seems to me that brokers are talking it down in the media so as to pick up cheaper stock after they have recently unloaded some.

Please look to the long-term investors.


B


Remember that's what you said too about the Warehouse when it started dropping? That brokers were talking it down to buy in cheaper? Ouch! [xx(]

[bongo66]

quote:Originally posted by Nightmare


quote:Originally posted by bongo66

Seems to me that brokers are talking it down in the media so as to pick up cheaper stock after they have recently unloaded some.

Please look to the long-term investors.


B


Remember that's what you said too about the Warehouse when it started dropping? That brokers were talking it down to buy in cheaper? Ouch! [xx(]


NM, not concerned with dropping shareprices but with running and management of companies im invested in.

It has however occured to me today that SKC Management ARE moving more and more outside what they know best-their Auckland cash cow-and that does concern me a little as i dont believe in diversification myself(especially just for the sake of it)

My judgement however is reserved on the merits or otherwise of their recent purchases outside NZ. I have the time to ride out any bumpy ride and of course realise my investment is a long-term thing and not a quick ***k.

B:D

[Nightmare]

B, cannot help but notice that all 3 companies you 'swing' to - RBD, WHS and SKC, stray outside of NZ and into situations where management are found wanting in acquisition strategy and execution strategy.

Long term? More like long term destruction of wealth in all 3 situations.

Truth is, SKC would be at least a $6.00 share now but for the lousy wealth-destructive acquisitions made by the management.

Presumably you would be swinging to Air NZ's Ansett tune as well until Ansett croaked? That's long term becoming terminal?

[truedragon]

hmmm.... a lot of negativity for SKC..... big price drop 15 cent in OZ.. expect the price to drop further tomorrow I will say

DISC: Hold SKC

[Burgerbun]

NM, not concerned with dropping shareprices but with running and management of companies im invested in.

I have the time to ride out any bumpy ride and of course realise my investment is a long-term thing and not a quick ***k.



Bongo, you still have your head in the sand.

I have never heard someone repeat so stubbornly so much rubbish in all my time on this site!

You said the VERY SAME thing about RBD!....and then you sold after a 80% drop in shareprice.


Do you realize how many opportunities you missed in 03 with WHS and RBD.

Do you realize that your long term mantra is rediculous when in 03 SO many companies put on 50-100% and the general market 25% while 2 of your companies nearly halved???

The brokers average was over 30%



I know youll never listen...but Diversify man!

you are in basically 2 companies!

Your portfolio needs a better mix. Then you could take a few small punts like ATR and they can more than pay for a few duds.

Youve been in the market 5 years only right.

Youre just really bloody stubborn I guess and dont seem to want to learn from your mistakes.





Im sure you dont want another RBD in the portfolio!


and SKC DO have a BLOODY poor record outside of Auck...dont they.
Yet half your money is risked here!

[Gryffyn]

Bongo, while C9s style might not get him a post in the diplomatic corps, he has a point about diversification. In many ways your (quite valid) long-term approach would be more suited to an index share or such. We all pick the odd share that fails - just see the regrets thread - but knowing when to move on and make the most of your money at any one point is the best lesson I've learnt. Cutting losses sometimes has to be done.

That said, I'm not convinced that SKC isn't an ok buy at the moment - still a good yield stock with growth potential.

[Happy]

Yeah I must admit though I am a buyer of SKC at sub 4.35 the propensity to spend cash on expensive assets (eg Qtown, Sky Leisure, Adeliade) that don't appear on the face of it to earn their Wacc does worry me a little.

[Nightmare]

$4.26 today and falling ....

Come on, SKC sickophons - opportunity beckons! Buy more!

[winner69]

Suppose todays price also includes 11 cent div as well

[bongo66]

Nm say something new and I will respond and learn to spell that word you keep repeating (sickophons)and you obviously have no idea what it means.

B

[Nightmare]

quote:Originally posted by bongo66

Nm say something new and I will respond and learn to spell that word you keep repeating (sickophons)and you obviously have no idea what it means.

B


B, I apologise if you took offence - I do not mean you as one of those sickophonic supporters of SKC.

It's specifically aimed at those who offer no counter-arguments or convictions and chose to attack postings highlighting SKC's diabolical track record in acquisitions without examining the numbers.

[TheBossMan]

quote:Originally posted by winner69

Suppose todays price also includes 11 cent div as well


yep, record date is 19th friday.

[truedragon]

Took out another lot @4.28 with another lot pending at the same price.
I am too concern about their investment strategy, but with the coming divvy and under line AKL casino performance. I think at sub 4.30, there really isn't much more to be hammered. I mean, they lowest SKC can really go is probably 3.80, anything below that is not likely, and who knows, maybe they will be able to deliver meaningful results from the Adleid and Darwin acquisitions later down the track. Time will tell, it's casino biz, and somebody use to tell me that gambling is addictive...hehe[8D]

DISC: hold SKC

[kiwigold]

Never mind Nightmare/matrix/sniper you'll get over it .I hope! This company is intrinsically sound and still has a good future as long as they can rein in their overenthusiastic propensity to make dubious aquisitions just for the sake of expanding the company.I'll sit on this one and happily take the dividends.And if I need any short term consolation about SKC's temporary falling share price I'll count the profits on FPA.Ooh and Nightmare lurn tu spell,the word is sycophants.

:D:D:D

[Nightmare]

quote:Originally posted by kiwigold

Never mind Nightmare/matrix/sniper you'll get over it .I hope! This company is intrinsically sound and still has a good future as long as they can rein in their overenthusiastic propensity to make dubious aquisitions just for the sake of expanding the company.I'll sit on this one and happily take the dividends.And if I need any short term consolation about SKC's temporary falling share price I'll count the profits on FPA.Ooh and Nightmare lurn tu spell,the word is sycophants.



No ...it's sickophonic supporters.

Sycophant is too nice to use on people who ignore facts and numbers but rely on management's assurances .....[^][^][^][^][^]

Kiwigold? More like turning gold into coal! [:p][:p][:p]

[Nightmare]

Especially for those who can actually understand numbers:

NPBT for Adelaide for half year to 31 Dec 2003 - $1.09m(down 48%)
NPBT for Adelaide for half year to 31 Dec 2002 - $2.08m

So have $250m invested in Adelaide and that's how much they make from it! Less than 1%.

Now let's add $200m plus to be invested in Darwin and get $2.0m return from it? And another $80m to be spent on Adelaide?

All funded by ever increasing level of debt - $667m as at 31 December 2003 (was $587m in 2002). Now to go up to over $1000m by June 2005.

[winner69]

quote:Originally posted by Nightmare




All funded by ever increasing level of debt - $667m as at 31 December 2003 (was $587m in 2002). Now to go up to over $1000m by June 2005.

PE of 15 odd seems pretty reasonable on the face of it ... but allow for that debt you mention you get an EV/E of about 25.

Thats making SKC looking pretty expensive eh nightmare ... even at 429.

More than half billion bucks invested to make almost zilch - no wonder some of the larger investors are getting worried.

[The Doctor]

NM ...the message is always compelling even if the 'messenger' has an identity crises,these guys are doing their level best to destroy the profits from their cashcow monopoly in Aucks and by sheer determination are bound to succeed.

[quartzpurple]

nightmare, could you please tell me where you got the npbf figure for 2003 $1.09m???
i have been trying to find that number but cannot find it.
thank you very much

[Nightmare]

quote:Originally posted by quartzpurple

nightmare, could you please tell me where you got the npbf figure for 2003 $1.09m???
i have been trying to find that number but cannot find it.
thank you very much


It's Supplementary Appendix 4D Information of SKC's results announcement - http://www.asx.com.au/asx/statistics/announcementSearch.do?method=searchByCode&issuerCode=skc&timeFrameSearchType=D&releasedDuringCode=M

[Gryffyn]

SKC reply in Dompost article this morning. May account for slight proce rise.

It's a longer term proposition is the mantra. I'm prepared to enjy an ok yield and give them a chance to deliver on that.

[quartzpurple]

nightmare, from p.9 i saw the EBIT from Adelaide is 7.2M. could you specify where you got your figure from? like what page? thank you very much. i am confused.

[kiwigold]

Nightmare, no I don't mine coal and I don't mine gold either.I invest in the NZ sharemarket to make a profit , something I have done with every share I have held in the last 2 years, before that, well that's another story.You can analyse the fine details of a companies report until the cows come home and no doubt put any spin on your results that you care to.Sometimes its better to take a broader view and say to yourself is this a sound company to invest my money in.the answer in this case is yes...it is.The performance is underpinned by the New Zealand operation (the broader view again you see)I did'nt pay a fortune for these shares and as I said before I'm quite happy to take the dividends for now and ride out the daily peaks and troughs of the shareprice.Also don't discount brand loyalty which in Sky city's case is very strong.No I'm not burying my head in the sand ,I have no doubt this company is going to continue to make a profit and reward its shareholders with steadily increasing dividends year on year.If I start to lose money on SKC I will cut my losses and move on.

[Nightmare]

quote:Originally posted by quartzpurple

nightmare, from p.9 i saw the EBIT from Adelaide is 7.2M. could you specify where you got your figure from? like what page? thank you very much. i am confused.



Page 17 .......you have to add back $1.4m associate accounted loss from Canbet to the loss figure of $361,000 out of Australian operations.

[quartzpurple]

thank you very much nightmare, could i suggest you something?

next time please write clearly that you were talking about australian operation in general only made $$$. "NPBT for Adelaide for half year to 31 Dec 2003 - $1.09m" from your previous post was misleading becuase in fact, it made a small 7.2M EBIT.

Please do not be offend. I appreciate your efforts for posting the link anyway.

[Nightmare]

quote:Originally posted by quartzpurple

thank you very much nightmare, could i suggest you something?

next time please write clearly that you were talking about australian operation in general only made $$$. "NPBT for Adelaide for half year to 31 Dec 2003 - $1.09m" from your previous post was misleading becuase in fact, it made a small 7.2M EBIT.

Please do not be offend. I appreciate your efforts for posting the link anyway.



$7.2m EBIT is correct but you have to take out funding cost on Adelaide debt of around $100m to arrive at the NPBT of $1.09m.

The Australian operations on Page 17 = Adelaide plus equity accounted Canbet loss of $1.4m = $391,000 loss. Therefore, Adelaide = $1.09m NPBT.

[quartzpurple]

Thank you for enlightening me NM. I understand what you meant by that now.

Gryffyn, could you link the post you mentioned?

thanks

[bongo66]

quote:Originally posted by Nightmare


quote:Originally posted by bongo66

Nm say something new and I will respond and learn to spell that word you keep repeating (sickophons)and you obviously have no idea what it means.

B


B, I apologise if you took offence - I do not mean you as one of those sickophonic supporters of SKC.

It's specifically aimed at those who offer no counter-arguments or convictions and chose to attack postings highlighting SKC's diabolical track record in acquisitions without examining the numbers.


No offence taken, and i DO appreciate your comments negative or otherwise on this stock. It is important to discuss all facets of a biz, good and especially bad, as this is obviously where improvements can be made, so the more they are pointed out the better as far as im concerned.

Having said that my money is invested here, and while their track record so far in OZ could be better, i cant see a fundamental reason for me to remove my cash and put it elsewhere on the market.

Just as ornery as Nightmare, :)Bongo

[truedragon]

Took up a relatively significant lot on Monday @4.28. Can't believe my short term luck really, immediate appreciation, very much like what FPA has done. I think there is clearly a strong support at around 4.25 level, and regardless of the virtues of Oz investments, provided that it can eventually exceed it's borrowing cost, I believe SKC will continue to appreciated. I mean if we take 300 mil for Adleide, and cost of capital is @ 7% say 21 mil. And Darwain take 200mil to fund and cost of borrowing @ 7% say 14mil. They are not targets that's too difficult to achieve (purly my own personal speculation), and any surplus above that is a plus for SKC group. I think my money is reasonably safe and will probably increase my stack if the 4.2x level is available again before the next divvy[8D]

Disc: Hold SKC

[Gryffyn]

QP: It was in the DomPost but I can't find it on Stuff now sorry.

[truedragon]

The expansion of Hamilton Airport has gotta be a positive for the SKC Hamilton.... any comments?

http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3556620&thesection=business&thesubsection=transport&thesecondsubsection=airports&thetickercode=

DISC: Hold SKC

[clearasmud]

Cost of capital is apparently 11% but cost of borrowing is 7%.
Anybody understand this?

[frostyboy]

Never tried to explain this so……

I think the cost of capital in this case includes debt costs and equity costs
A simplified cost of capital
R = div/price +g
R = 35.81/434 + growth
R= .0825 + .0275
=11%

the dividend is a result from debt used + the companies risk, this takes into account the share price, and the shareholders are suppose to receive higher returns than debt holders because of the risk involved, (assuming stocks price is intrinsically valued)

[mikescott]

This is be my studying book calculating of cost of capital;

cost of capital = beta (e/t*(10 years bond rate plus equity risk premium) + d/t*debt funding rate). e = equity, d = debt and t=equity plus debt.

So it is better having more debt than equity as equity is more dear than debt.

[CAM]

Share goes ex dividend THEN the price goes up....go figure.

[Shooter]

End of financial year euphoria starting to kick in, perhaps?

[TheBossMan]

quote:Originally posted by Shooter

End of financial year euphoria starting to kick in, perhaps?


Trading Halt requested. Some news on Darwin and Christchurch?

[Gryffyn]

SKC
05/04/2004
HALTRECQ

REL: 0950 HRS Sky City Entertainment Group Limited (NS)

HALTRECQ: SKC: SKYCITY Entertainment Group Ltd: Request for Trading Halt

SKYCITY Entertainment Group Limited expects later today to announce a
significant transaction involving the company and, as a consequence, requests
in accordance with NZX Listing Rule 5.4.1(a) a trading halt from receipt of
this notice until the announcement is made, expected to be at approximately
11.00am NZ time today.

The company believes that information regarding the transaction (if it is
entered into) is likely to have a material effect on the company's share
price (ie it will be "material information" under the Listing Rules). The
company will not, however, be in a position to confirm or otherwise the
transaction until approximately 11.00am this morning. Once that announcement
has been made, the requirement for the trading halt will cease.

SKYCITY Entertainment Group Limited is not aware of any reason why the
trading halt, as requested, should not be granted.
End CA:00098858 For:SKC Type:HALTRECQ Time:2004-04-05:09:50:00

[Gryffyn]

Chch maybe, Darwin is done.

[floyd]

its christchurch, 40.5 percent for 90 odd million

[johna]

Let's just hope they don't turn our classy southern Casino into a copy of that trashy Auckland one.

[Nightmare]

Yes, they are profitable ...pity it's thru' loading up with debt and are eps negative. :D

Remember they said the same thing about Adelaide and 3 years later, they still barely cover interest costs, let alone return on equity. [}:)][}:)]

[Prophet]

Both Darwin and CHCH are profitable from day one. Debt funding aside the sagging share price has opened up good buying opportunities.

[Nightmare]

quote:Originally posted by Prophet

Both Darwin and CHCH are profitable from day one. Debt funding aside the sagging share price has opened up good buying opportunities.


Yes, they are profitable ...pity it's thru' loading up with debt and are eps negative. ;)

Remember they said the same thing about Adelaide and 3 years later, they still barely cover interest costs, let alone return on equity. And then there's Canbet (Canlose), Queenstown (Beggartown), Force (PeterFrancis special) ......:D:D:D

[bongo66]

quote:Originally posted by Nightmare


quote:Originally posted by Prophet

Both Darwin and CHCH are profitable from day one. Debt funding aside the sagging share price has opened up good buying opportunities.


Yes, they are profitable ...pity it's thru' loading up with debt and are eps negative. ;)

Remember they said the same thing about Adelaide and 3 years later, they still barely cover interest costs, let alone return on equity. And then there's Canbet (Canlose), Queenstown (Beggartown), Force (PeterFrancis special) ......:D:D:D



Yup Nightmare that is why the other major shareholder wanted to buy the Aspinal stake and doesnt want SKC to have a share. It is a cash cow, and that is about the long and short of it. Aspinals are selling to raise funds in the growing UK gambling market.

Surely johna Auckland owners of your dinky little gambling den would actually inject some life and energy into an otherwise dull as dishwater country town:)

SKC maybe pushing sheeite uphill to pass regulatory requirements to purchase their latest stake.

excellent news!! Bongo

[bongo66]

Sky City Entertainment Group Limited (NS) - Announcements






SKC
05/04/2004
ASSET

REL: 1105 HRS Sky City Entertainment Group Limited (NS)

ASSET: SKC: SKYCITY acquires Christchurch shareholding

SKYCITY Entertainment Group Limited (SKYCITY) advises that it has reached
agreement with the shareholders of Aspinall (NZ) Limited to purchase the
shares in Aspinall (NZ) Limited for NZ$93.75 million (on a debt-free basis).
The shares in Aspinall (NZ) Limited are currently held by interests
associated with the late John Aspinall (UK) and Consolidated Press Holdings
(Australia).

The purchase of the shares in Aspinall (NZ) Limited is conditional on, among
other things, Overseas Investment Commission, Casino Control Authority, and
Commerce Commission approvals. These approvals are expected to take
approximately 6-8 weeks to conclude.

The acquisition will be fully debt-funded.

Aspinall (NZ) Limited holds an effective 40.5% shareholding in Christchurch
Casinos Limited (CCL), the owner and operator of the Christchurch casino.
The other shareholders in CCL (and their effective interests) are Skyline
Enterprises Limited 40.5%, Southern Equities Limited 8.6%, and SPHC (NZ)
Holdings Limited, a subsidiary of InterContinental Hotels Group plc, 10.4%.

Aspinall (NZ) Limited also holds an effective 32.2% interest in Victoria
Hotels (Christchurch) Limited, the owner of the 296 room, 4 star,
Christchurch Crowne Plaza Hotel, which is located adjacent to the
Christchurch casino in central Christchurch. The Christchurch Crowne Plaza
was refurbished in 2002.

CCL is also a 33% shareholder in Dunedin Casinos Limited, the owner and
operator of the Dunedin casino.

The Christchurch casino, which opened in November 1994, operates 500 gaming
machines, 45 gaming tables, two restaurants and three bars. CCL is a
successful and well-regarded business which has achieved growth in
profitability since it commenced operations in November 1994. Aspinall (NZ)
Limited reports, in its financial statements, a growth in its share of the
surplus earnings from its investment in CCL from $5.53 million in the year
ended 31 March 2000 to $8.09 million for the year ended 31 March 2003.

SKYCITY advises that the purchase price of $93.75 million is consistent with
a multiple of 7.8 times CCL's historical (year ended 31 March 2003) net
surplus before tax. This represents a favourable multiple on an EBITDA
(earnings before interest and tax) basis to recent gaming sector transactions
in Australasia.

Whilst the investment will not confer a controlling position in the
underlying assets, SKYCITY considers that the proposed purchase provides a
unique opportunity to gain a significant interest in a quality New Zealand
gaming/entertainment asset at a favourable price. From SKYCITY's
perspective, the proposed acquisition has the following characteristics:
? the investment is core business in SKYCITY's home market - ie is a
logical addition to SKYCITY's gaming and entertainment portfolio
? Christchurch Casino is a well-managed, quality asset
? CCL has demonstrated strong growth performance over recent years and
this is anticipated to continue
? the investment is at favourable pricing
? SKYCITY's recently renegotiated senior debt facility allows the
acquisition to be fully debt-funded without placing any strain on the Group's
funding.

SKYCITY advises that it has undertaken due diligence with respect to this
proposed acquisition based on publicly-available information and information
made available to the company by Aspinall (NZ) Limited, pursuant to
confidentiality agreements between SKYCITY and Aspinall.

SKYCITY looks forward to participating as a shareholder in CCL alongside its
partner in SKYCITY Queenstown Casino, Skyline Enterprises Limited, which also
holds an effective 40.5% shareholding in CCL. SKYCITY and Skyline have been
associated as the shareholders in Queenstown Casinos Limited since the
Queenstown licence application was filed with the Casino Control Authority in
1997.

[bongo66]

An 8.6% stake is also up for sale by Louis Crimp.

If bought by SKC it would make it the biggest shareholder in CH CH C...

[Halebop]

I think it is actually too early to make a judgement on the purchase either way.

The Christchurch casino operation seems to be a reasonable price. With Aspinall New Zealand's share of earnings placed at $8.09m for the previous year (I assume pre tax?) and a purchase multiple of 7.8 then the inferred price was around $63.1m for the casino.

Sky have advised this price reflects good relative value compared to recent casino sales. Comparison is fraught however as their own transactions have been at the "lofty" end of valuation science and would also include a premium for control (of cashflow) - something they lack in this instance. Also, their relationship with Skyline seems less than ideal right now - a factor the press release seems at pains to downplay.

If CCL is worth $63.1m to Aspinall then this leaves $30.65m for the 32.2% interest in Victoria Hotels (Christchurch) Ltd plus whatever other sundry assets might remain with the holding company. I don't know anything about this asset but $30 million seems like quite a wad of money to me - Implying a $95m'ish value on the hotel plus whatever debt the hotel owning company might have, if any.

Perhaps someone knows something about the hotel owning company? Perhaps one of the other shareholders is a public company? What does it return? Does anyone know? [?]

The conspiracy theorist in me has a suspicion they might have bought the Aspinall holding company to fudge the relative values of the casino and hotel property.

[Nightmare]

Let's assume SKC funds itself at 7.5% pa on its to be $1 billion debt.

7.5% on $93.75m = $6.5625m per annum.

Let's assume CCL increased its NPAT by 20% to $9.71m so SKC's 40.5% gives it $3.93m return.

Call me old-fashioned but I like positive eps ....:D:D:D[^][^][^]

[bongo66]

Can you actually read Nightmare , here it is in bold, itallic and colour just for you.[:p]


Aspinall (NZ)
Limited reports, in its financial statements, a growth in its share of the
surplus earnings from its investment in CCL from $5.53 million in the year
ended 31 March 2000 to $8.09 million for the year ended 31 March 2003.


Aspinals 40.5% share of CCL gives them a surplus of just over 8m for the year ended 2003. It is NOT a 40.5% of that 8m.

mmm, Bongo

[Nightmare]

You are right, Bongo69 and I stand duely corrected and properly highlighted for not reading properly! :(:(:(

[bongo66]

quote:Originally posted by Nightmare


You are right, Bongo69 and I stand duely corrected and properly highlighted for not reading properly! :(:(:(


Well Daygelding, i guess it just goes to show that the fact is in the detail and it is always important to get these things right. Especially when you are talking about money-indeed large sums of it.

Incorrect detail or reporting fiction as fact can often lead readers to totally misrepresent what one is saying[:p]:D

B

[bongo66]

Was reminded by the better half yesterday that borrowing to invest inccurs excellent tax credits.

It is exactly what I do and in both my and SKC case it involves revolving credit lines except SKC has a slightly higher debt.:D But no mind it also has large cashflows and these kinds of loans are perfect to have when you have the cash flow to pay debt and available funds to purchase new businesses .

I cant believe i didnt think of the tax benefits myself and after having taken them into account SKC last 2 purchases look much better than indicated by some.

Look for the long-term kimosabi, Bongo

[Shooter]

Could anyone shed more light on the issues surrounding the Commerce Commission decision. How likely is it that they would approve/disaprove the latest SKC purchase?

[Gryffyn]

In the paper today that it is likely - let's face it, they have their fingers in all other casinos bar one in NZ.

[Shooter]

Gryffyn, if that was the case, you would think that should work against them come the decision time, given the monopoly issues, etc.

[bambi]

But they won't have a controlling share so that is a positive for them. I think it would be much much harder if they were trying to take a controlling stake in Chch Casino. If they can't get a member onto the BOD then it's a bit like investing the money in the bank.

Bambi

[Gryffyn]

Shooter - my point was that they are already so close to monopoly position in what is now a closed market that it makes little difference for them to be in ChCh.

[bongo66]

This peice from the well informed NBR shoeshine is interesting:


[i]Sky City in shootout at Christchurch corral
Column by Shoeshine


At first glance you might be forgiven for wondering how on earth Sky City Entertainment thinks it's going to get away with buying into the Christchurch and Dunedin casinos.

After all, the group already has the monopoly casino franchise in Auckland, Hamilton's only casino and a gambling hell in Queenstown.

If Tuesday's deal goes ahead it will effectively own five out of six New Zealand casinos * the only other one is Queenstown's minute Steamer Wharf casino.

In fact, approval by both the Commerce Commission and the Casino Control Authority shouldn't be a problem.

The authority has to check only that an applicant is a suitable candidate to run a casino. Sky City already owns half of them so it would be unusual if the authority has changed its mind.

A Commerce Commission precedent was set when Sky City applied to build the Riverside casino in Hamilton.

The commission defined the market in which it would investigate potential dominance as casino entertainment in Auckland and Hamilton, so it is likely to consider the current application under casino entertainment in Christchurch and in Dunedin.

After all, it's scarcely as if the Christchurch casino competes with Auckland for customers.

If all goes well with the regulatory stuff, it looks as though Sky City managing director Evan Davies has bought himself some useful strategic stakes at reasonable prices.

The $93.75 million price for 40.5% represents 6.8 times 2003 ebitda (earnings before interest, tax, depreciation and amortisation). That compares with the 7.3 times paid recently for the Darwin casino, but in Christchurch Sky City has not gained a controlling stake.

The share Sky City bought yielded previous owner Aspinall $8.09 million last year, a return of 8.6%. As the debt Sky City will raise to fund the acquisition will come a lot cheaper than that, the buy will be cash earnings positive from day one.

Now comes the battle for control and, eventually, outright ownership.

Sky's buying into Christchurch Casinos Ltd has been opposed all along by the other 40.5% owner, Barry Thomas, although it still isn't clear to Shoeshine, or to Evan Davies, what Mr Thomas' problem is.

Unless the two can resolve their differences they will have to slug it out to buy the stakes held by British giant InterContinental Hotels Group * which, with 10.4%, could put either party in control * or by Invercargill businessman Louis Crimp

Crimp is a colourful character who outrages readers of the Southland Times by writing letters to the editor about "the looting of New Zealand by Maori," and his fellow townsfolk by fighting development battles with the city council.

But he has only 8.6%, not enough to confer control.

In any case, analysts suspect both Barry Thomas' Skyline and Aspinall, and so now Sky City, have pre-emptive rights over both stakes that will allow them, if the shares are sold, to acquire them in equal proportion, so the most likely outcome is that each will end up holding 50%.

Control of the board, however, lies with Thomas. As chairman he has the casting vote on a four-man board on which there is another Skyline director, one Aspinall (now Sky City) director and managing director Arthur Pitcher, whom Davies indicated he was keen to see stay on.

Davies could, of course, simply bid a price for the stakes, or just InterContinental's, that Thomas can't match.

But he is unlikely to want to do so. Although Sky City's balance sheet, with interest cover still at 4.5 times post-acquisition, is not stretched, investors are already questioning whether Sky City has been paying too much for its recent acquisitions.

In any case, Thomas looks seriously outgunned, ranged as he is against a $2.5 billion public company. The denouement will be interesting to watch.

Davies, with 33% of Dunedin Casino under his arm, will also no doubt be dropping in on Earl Hagaman, who owns 42%.

[winner69]

quote:Originally posted by bongo66


The same is true of the Darwin purchase; with that casino adding around 3 cents per share in earnings.

let it roll baby, Bongo


Company themselves say Darwin reduces eps. Look at the proformas they include in company presentation - last years results if Darwin had been included would have seen eps of 25 cents (instead of 26 cents actually achieved) .... that seems a decrease in eps to me

See 03 proformas with Darwin included in SKC presentation - page 12
http://www.skycity.co.nz/scl/upload/Darwin_Presentation.pdf

[Nightmare]

B66, What's there to be found out? I was very quick and happy (unlike many others)to admit that I had the numbers on ChCh wrong as soon as you pointed them out.

As to being quiet, I think SKC will go the same way as your two other picks - RBD and WHS - massive value has been destroyed for shareholders and those who were stupid enpough to stay in missed the opportunity to make money elsewhere as well as lose a bundle.

There are developments which fundamentally tell you a company is acquiring so-called 'growth assets' for growth's sake and SKC crossed that line with Darwin. Fancy building up debt to $1.1 billion ....[xx(]

[bongo66]

quote:Originally posted by winner69


quote:Originally posted by bongo66


The same is true of the Darwin purchase; with that casino adding around 3 cents per share in earnings.

let it roll baby, Bongo


Company themselves say Darwin reduces eps. Look at the proformas they include in company presentation - last years results if Darwin had been included would have seen eps of 25 cents (instead of 26 cents actually achieved) .... that seems a decrease in eps to me

See 03 proformas with Darwin included in SKC presentation - page 12
http://www.skycity.co.nz/scl/upload/Darwin_Presentation.pdf


Thanks for that Winner, but I seem to recall the intial announcement by SKC saying it would add around 3 cents per share to earnings. I posted it somewhere in this or the previous SKC thread. Has that original statement been refuted by them?

B

[Halebop]

They pro-forma'd (is that a word?) the full year 03 results to synthesise the Darwin acquisition's impact. Pre Amortisation earnings rose from 27 cents to 29 cents and Post Amortisation earnings dropped from 26 cents to 25 cents.

The real truth behind those earnings is based upon what might happen in 2015 when the "exclusive" casino operators license expires. It's too far away to guess. The $103m license value is being amortised over 11.5 years plus $47m goodwill being amortised over 20 years. This seems fair and reasonable.

[Halebop]

The focus given their debt funded growth should not really be EPS. Concentrate instead on Return on Assets, Return on Equity and the Debt profile - i.e. How long will it take to pay debt down based on retained earnings.

I haven't looked at this in depth but on the surface it appears management must be expecting/hoping for continued growth from their Auckland casino powerhouse. While I don't believe the balance sheet is as stretched as appears given that Auckland has a substantial unrecognised goodwill value - it appears current debt level and planned capex and acquisitions will boost interest bearing liabilities to a position somewhere around the NZ$1 billion.

Debt at balance date was $600m. Committed capex was a further $143m - mostly Auckland's hotel/convention complex. Christchurch is $94m. Darwin is A$195m (around NZ$224m). That puts total debt at $1060m.

Annualised, Christchurch should add at least NZ$8.1m to EBITA
Darwin's NZ$27m EBITDA implies EBITA of around NZ$20 to 24m (I cant get my head around what depreciation actually is for Darwin!)
Total debts from these acquisitions of $317m at a cost of maybe 7.3% or $23.1m pa
Amortisation will push this cash earnings surplus into the red.

On an annualised basis, all of this implies tax paid earnings before amortisation of around $120m'ish. Maybe $115m for this financial year depending on acquisition timings. If dividends were say 22 cents p.a. they would cost around -$91m,leaving cash of $29m to help pay down debt of $1060m.

Hence, some juicy growth better be in the offing to cope with the debt load. Once the hotel and convention centre comes fully online this should contribute but on those numbers I'd either want lower dividends or free cashflow of $60m'ish.

Dividend reinvestment might catch a further 20m+ but as it represents dilution this is only of use if the share price is consistently trading above intrinsic value... (I'd also ask myself if something is trading well above intrinsic value why am I holding it?)

[bongo66]

HB, can you factor in the tax benefit to invest with borrowed money. Also is it likely that the borrowed money cost less than 7% given attractive borrowing rates available globally?

Annualised, Christchurch should add at least NZ$8.1m to EBITA


The above fig, as reported by SKC, was in fact net profit for the share of CH CH casino that Aspinals owns and SKC wants to buy.

B

[belgarion]

For a share that just continues to go up and up and up and is currently sitting on a PE of about 11, SKC seems like a good buy to me. Debt seems managable and so is pretty much a non-issue. Add to that the SKC has a number of 'assets' that are surplus to requirements that can be flogged off to reduce debt.

Looking forward, the NZD is above its long-run average and a fall should increase the attractiveness of NZ as a destination for things other than holidays. Additional revenue streams coming online soon that seem to me to have been very conservatively estimated. Im expecting to be pleasantly surprised when these revenue streams are active and reported.

One notes that last split saw a very flat SKC price that didn't start to pick again until after april. Will the same happen again?

On the downside, SKC is exposed to geo-political risks and at this time they shouldn't be underestimated.

discl: Have dipped a toe is the murky waters and may going swimming as the price picks up.

[nelehdine]

Agree Belg ... seems to me the company has received little credit for the things it does well ( run casinos ) and lots of bad press about the things it does averagely (diversification) This is usually a recipe for short term under-performance and normally a very good buying opportunity for investors after more than a 5 minute fling !!!

[Placebo]

Agree. Where there is nervousness is in the extent of its acquisitiveness (is that a word?), and some lingering doubts over the price paid for Adelaide. Canbet is a worry, but SKC's overall exposure there is small compared to its overall asset base.

The only risk in Chch is if Barry Thomas has a major hissy fit and decides to run the company down just to spite his northern raider. Anyone think that's a likely scenario? Me either. Chch is nearly as big a cash cow as Auckland casino, and as others have observed, SKC's behaviour is usually to build up a long-term moneyspinner with heavy investment (cf Auckland, Adelaide plans), rather than as a profit-taking asset stripper.

Yes it's relatively cheap, get in now. Remember in gambling, the house always wins! :D

[brent]

Interesting yarn on ShareChat with SKC ceo Evan Davies

The interview is here http://www.sharechat.co.nz/features/iinterviews/

[Kookaburra]

"The only risk in Chch is if Barry Thomas has a major hissy fit and decides to run the company down just to spite his northern raider. Anyone think that's a likely scenario? Me either. Chch is nearly as big a cash cow as Auckland casino, and as others have observed, SKC's behaviour is usually to build up a long-term moneyspinner with heavy investment (cf Auckland, Adelaide plans), rather than as a profit-taking asset stripper."

Interestingly the Chch place could do with a spend up. It was always a tatty design though fresh and smart enough inside. But has none of the presence of the Auckland facility. Good surrounding facilities which it would do well to take up the management of and unify the whole lot as a convention centre.

[Placebo]

Anybody else getting twitchy about SKC's acquisitive tendencies of late? They are on a bit of a spend-up, I know what I'd rather see them do... Also, I would've thought they would wait for the dust to settle on one purchase before moving on another. Makes me wonder what else is around the corner. I wouldn't want to see their fundamentally sound core business compromised by over-committing their spending.

Can someone soothe my ruffled feathers?

Disc: Hold SKC.

[belgarion]

You can sell to me ....;)

[bongo66]

Im always looking to buy more of this one...

[Burgerbun]

quote:Originally posted by bongo66

Im always looking to buy more of this one...



what a tease:D...why just "looking"[:p]

how about WHS?

[CAM]

Question.....does anyone know when they are due (roughly) to make the next profit announcement??

[nest]

am i missing something here or what. everyone seems pissy about skc buying more and more, does not this signify more and more income?????

[quartzpurple]

Nest, I would suggest you to read all the historical threads. More income does not necessarily translate into more profit or cash flow.

[quartzpurple]

CAM, I would expect it to be aound mid-August.

[Halebop]

quote:Originally posted by nest

am i missing something here or what. everyone seems pissy about skc buying more and more, does not this signify more and more income?????


Welcome Nest.

Buying more and more (and increasing leverage) is a fantastic strategy if the assets are bought cheaply and/or their income grows strongly. I won't go so far as to say this hasn't happened but it certainly hasn't been seen to have happened. The current performance of investments such as Adelaide and Canbet suggest management have a dose of bad luck or gaps in their analysis.

If anyone was lucky enough to be a shareholder in Rank (was it '91 or '92?) when they initially bought the Government Printing Office and then later Whitcoulls, Croxley, London Bookshops, etc will remember despite very high leverage the share price rose rapidly from around one dollar to over $30 dollars (allowing for splits) - in fact, the share price doubled instantly upon the GPO announcement and quickly rose to four times it's value.

If the market believed Sky City had done such a good job of acquiring you would have seen some sort of upwards movement in their share price as well. Unfortunately, they are now leveraged to an extent that if an attractive and large opportunistic acquisition presents itself they would have to issue new shares to fund it (dilution) or walk away (opportunity cost).

It is worth reading up on Buffett and the "Corporate Imperative" in this case. I suspect Sky City are failing this particular litmus test.

[nest]

thanks for your explanation, as u may have guessed i am new at this, but u gotta start somewhere, right? Adelaid is not making a loss but is not making the huge profits that skc auckland is either, in fact auckland seems to be holding up everything else it owns, including Queenstown, so picture is far from purfect......what the hell are they going to do with canbet????? the next profit announcement should be around the end of August.

[Binklebonk]

quote:Originally posted by belgarion

For a share that just continues to go up and up and up and is currently sitting on a PE of about 11, SKC seems like a good buy to me. Debt seems managable and so is pretty much a non-issue. Add to that the SKC has a number of 'assets' that are surplus to requirements that can be flogged off to reduce debt.


Are you sure PE is around 11 is correct?

My rough calculations are:
Last Year Profit $110m
Shares 416m
EPS 26c
Price $4.50
PE 17
Dividends 23c
Yield (net) 5.1%

On this basis would you say SKC is fully valued?

[Andrew]

Any ideas what will happen to casinos when inflation increases.

Still betting in dollars, machines still accepting the same coins.
It will take time to update machines to play higher coins.

Roulette still accepts $1-00 chips. Will we all start using $10-00 chips.

[Halebop]

quote:Originally posted by Andrew

Any ideas what will happen to casinos when inflation increases.

Still betting in dollars, machines still accepting the same coins.
It will take time to update machines to play higher coins.

Roulette still accepts $1-00 chips. Will we all start using $10-00 chips.



In the macro sense if you have a threshold of losing up to $100 a week and inflation ran at 5% then your income would rise 5% and so would your gambling losses.

Punters wouldn't actually think of it in this manner but it is what would happen.

[Gryffyn]

You could argue that with high inflation there is more encouragement to gamble as your money is just wasting away otherwise. RB won't let inflation get that high though. Main worry is rising interest rates hurt yield shares like SKC.

[nest]

seems to me people who gamble will always gamble, no matter what the interest rates are or how much they earn. actually, for the gambler the harder life gets the more they look for the easy way out. like to know how hard the company is penny pinching to keep those profits increasing though.

[Placebo]

Another step on the road toward the buy-in to Chch, http://www.comcom.govt.nz/publications/display_mr.cfm?mr_id=1336.

It seems Barry Thomas isn't giving in yet though. Next step the Casino Control Authrority... then the OIC... then presumably the UN, the EU and possibly God himself...:D

[nest]

i'm sure god himself wont say no.....:D[8D][}:)]

[bongo66]

Anyone noticed the steady rise of this companies SP on much bigger volume than average. Today nearly 10M$ went through.

What do the brokers know that you and me dont?

Bigger forecast profit coming up is my guess.

Anyone? Bongo

[Burgerbun]

now you like brokers

now you dont

yes I do

no I dont

[?][?][?][?]

[bongo66]

Goodness me C9 , my comment, if anything my comment above simply reinforces my lack of respect for the old boys network-just for once i would like to know what they know, at the same time if poss.

They know something and are acting upon it, THAT is all i am saying.

IM consistant in my approach.

Still i cant expect more from a deluded lefty who twists fact to get across their megre point.You lefties are all the same.

Try again, Bongo

[kiwigold]

I was having a look on stockness Bongo there are some fairly large trades going on there.Still with all the cash they're spending on acqisitions and increasing total market share the bottom line should be getting fatter too,one would hope !:)

[Burgerbun]

Bongo my dear man, I didnt think you thought of me as a lefty.

My observation came from your WHS comment of....if they have a sell rec on WHS in Aussie...maybe its time to buy.

and here youre wanting to know what they know.


night....my precious[:p];)

btw.. I see your still waisting valuable time with the WHS.
I rec MHI at $5 and its put on 20% in less than 2 months.

...you gotta know when to fold em....and

[clearasmud]

I'm not suprised SKC is heading north.
New purchases means improved cash flows/profits
Although borrowing is increased the risk is discounted because casinos are reliable cash flow producers.

[Placebo]

I bought into SKC about 2 years ago and wish I had sooner:(, it's been in an uptrend for most of that time, but paused for a breather when the stock split, that occurred about the time they announced the Darwin acquisition, and there was some concern in the market over that move.

In their last annual report they were very upbeat about Adelaide and Auckland, they've increased their holding in Hamilton and appear to be clearing the regulatory hurdles for Christchurch. It's a good story and the market likes good stories. No surprise it's on the way back up.

[bongo66]

Could this, in Granny today, be the thing that brokers know about that we dont and the reason for the steady increase in shareprice over the last 2 weeks?


The gaming industry is consolidating in Australia, where eight out of 10 people gamble at least once a year and 40 per cent wager every week - the highest rate of gambling in the world.

Unitab and Sky City Entertainment Group have been named as possible takeover targets, with Packer's PBL and Tabcorp seen as likely predators.

Im not interested in selling if the rumours are true:D

Its gooble or be gobbled, Bongo

[lucky]

How many other Cuba Street casinos in NZ ???

Get in first and pinch Burswood packer is being to mingy.

[lanenz]

I don't think Sky City will compete against K P for Burswood.
Also, the industrial strike against Sky City had a lot ofimpact the other night. The company has a big weekend ahead with a lot of overseas visitors. I wonder if they will use that as a weapon?

[bongo66]

Lanenz, I read that the "strike" had no impact on SKC operations at all. Only 250 of the staff decided to take a holiday that day.

Anyone know which 2 OZ institutions bought and sold 10M shares off market on Tuesday?

Gerry, are you still there, wanna give us a run down on your profit estimate for August.

B is for break the bank:D, Bongo

[lanenz]

Hi Bongo. I happened to have a look for myself. It was only a 4 hour strike. They had to close both the "Play and Alto". Also half the main gaming floor was closed at that time.

[Halebop]

quote:Originally posted by bongo66

...B is for break the bank:D, Bongo

I thought B was for Borrow?

I used to work for a business that had an 80 seat call centre. When they had 8 people off wait times would baloon from 0-60 seconds to 1-10 minutes! I think having 250 people off would get noticed.

I see they declared their offer for Sky City Leisure unconditional. Perhaps we'll see gaming machines in the food hall at Sky City Metro?

B is for B Grade Movies, Halebop

[nest]

yes i agree ianenz, this weekend could turn out to be rather interesting. and yes, 250 pax where noticed. 4 hours would have only been a show of force. next one could be longer and that would have a real impact i am sure, not matter when it was taken. it is a 24hr business after all.[?] oh well, watch this space...

[Gryffyn]

SKC
18/06/2004
GENERAL

REL: 1608 HRS Sky City Entertainment Group Limited (NS)

GENERAL: SKC: SKYCITY and Christchurch Casino

SKYCITY Entertainment Group Limited advises that it has today received Casino
Control Authority approvals relating to its proposed acquisition of the
shares in Aspinall (NZ) Limited which in turn owns 40.5% of the shares in
Christchurch Casinos Limited.

SKYCITY Entertainment Group Limited has already received Commerce Commission
clearance and Overseas Investment Commission approval for its acquisition of
the shares in Aspinall (NZ) Limited and Casino Control Authority approval
completes the regulatory requirements which were a condition of the purchase
agreement with Aspinall.

SKYCITY will now move to complete the formalities of the transaction and
looks forward to its involvement in Christchurch Casinos Limited.
End CA:00101538 For:SKC Type:GENERAL Time:2004-06-18:16:08:12

[Gryffyn]

Interesting to see how much of a battle is left for this buy in. Will they get a seat on the board?

[bongo66]

We now own a share,its official:



Sky City Entertainment Group Limited (NS) - Announcements


SKC
18/06/2004
GENERAL

REL: 1608 HRS Sky City Entertainment Group Limited (NS)

GENERAL: SKC: SKYCITY and Christchurch Casino

SKYCITY Entertainment Group Limited advises that it has today received Casino
Control Authority approvals relating to its proposed acquisition of the
shares in Aspinall (NZ) Limited which in turn owns 40.5% of the shares in
Christchurch Casinos Limited.

SKYCITY Entertainment Group Limited has already received Commerce Commission
clearance and Overseas Investment Commission approval for its acquisition of
the shares in Aspinall (NZ) Limited and Casino Control Authority approval
completes the regulatory requirements which were a condition of the purchase
agreement with Aspinall.

SKYCITY will now move to complete the formalities of the transaction and
looks forward to its involvement in Christchurch Casinos Limited.


Looking forward to the extra revenue.

A fight indeed Griff, give up the seat Southern man, it could be all ours eventually anyway:D

B

[Gryffyn]

So good it was worth saying twice eh? ;)

[Gryffyn]

Bongo - do you think this move for SKC will translate the extra revenue into actual profit growth given all their other distractions at present.

Will the new acquisition provide a good return on capital?

[lanenz]

Christchurch has been a long term steady business. The biggest benefits are that it consolidates SKC operations in N.Z. Logistically it helps Sky Alpine (Queestown)greatly to overcome shortfalls in labour when they have V.I.P players from Asia. It also provides more options for SKC to attract "Junket Players" to their various sites. That is why Darwin is an important acqusition for their Asian market.

[truedragon]

Just got back from Macau the sin city LasVegas style of Asia.... Lisboa and many other casions are fairly packed.. people just love gambling I guess. From memory, I think SKC AKL measures up okay compare to these casions..

[bongo66]

Griff, I think it is supposed to add 2-3 cents per share...

[CAM]

The best thing it does is strengthen its monopoly in NZ gaming. Never know it might pop up on the radar of one of the big boys one day. Although I would be reluctant to sell as it has done me very well. Got mine before they listed and have held ever since. Been a nice bottom draw investment with the old drip and share splits.

[bongo66]

If the Las Vegas example below is anything to go by then SKC AK looks set to benefit from their expansion of the convention centre:


[i]Vegas on a winning streak as visitors fill hotel rooms

19.06.2004
By JEANNINE DEFOE
Richard Tucker attends trade shows across the US to meet buyers for the T-shirts and jackets made by his company, Richmar Fashions. When he goes to Las Vegas, he takes two extra workers and rents 20 feet more floor space because demand is 25 per cent higher than in other cities.

"Vegas is number one by far," says Tucker, as he and eight employees of his Fort Mill, South Carolina-based business negotiate with buyers on the floor of the Mandalay Resort Group's convention centre. "You get more bodies, you generate more sales. Everyone wants to come to Vegas."

Last year, for the first time, Las Vegas conventions generated more revenue for the local economy - US$6.5 billion ($10.3 billion) - than the US$6.1 billion that gambling gave casinos. Visitors flocked to Las Vegas as lower room rates and more convention space lured them away from cities like Chicago.

The phenomenon has motivated casino owner MGM Mirage, which this week agreed on a deal to buy Mandalay Resort Group, owner of the city's newest convention hall, for US$4.8 billion in cash.

The enlarged company will surpass industry leader Caesars Entertainment and No. 2 Harrah's Entertainment with US$6.5 billion in annual sales. The purchase creates a company of 28 resorts in Nevada, Mississippi, Illinois, Michigan and New Jersey.

The combined company will own many of the newest resorts on Las Vegas Boulevard, known as "the Strip", including the Bellagio, said Ross Gerber, chief operating officer at Independent Capital Management in Santa Monica, California.

"It's probably bad for everybody else on the Strip," said Gerber. "Harrah's Las Vegas, the Flamingo, Caesars are sort of older properties. Mandalay is the hippest property there is. Their competitors should be worried."

MGM Mirage chief executive Terrence Lanni will lead the new company.

"The convention market there has just been fantastic and it seems that Mandalay has capitalised on it the most," says Troy Huff, who helps manage US$122 billion, including shares of Las Vegas-based Mandalay, at US Bancorp Asset Management in Minneapolis.

"They're surpassing everyone's optimistic expectations with the building of their convention centre."

Las Vegas-based casino companies MGM Mirage, Caesars Entertainment, Wynn Resorts and Las Vegas Sands are investing US$5 billion to add about 7500 rooms and 74,000sq m of meeting space in their hometown by the end of 2006.

Today, at least nine construction cranes dot the horizon along the 6km Strip. Wynn Resorts' US$2.4 billion resort will have 2700 rooms when it opens next year, MGM Mirage is adding 930 rooms at its Bellagio casino, and Caesars Entertainment is building a 950-room tower at Caesars Palace.

"We've never been busier," says Richard Rizzo, chairman of Framingham, Massachusetts-based Perini Building Co, the biggest US builder of casinos. The company is working on at least six other Las Vegas hotel projects that will each exceed US$100 million, he says.

Investing in new rooms is not a sure bet: the last Las Vegas building boom in the 1990s was followed by a bust.

Las Vegas casino owners overestimated demand when adding 20,000 rooms in the mid-1990s with the development of resorts such as New York New York and Bellagio. MGM Grand's net profit slid to US$69 million in 1998 from US$111 million in 1997.

The turnaround began in 1999 with the opening of a 105,000sq m convention centre as part of the Las Vegas Sands' Venetian resort. Three years later, the city expanded its own convention centre by 121,000sq m to 186,000sq m, and Mandalay's 93,000sq m hall opened last year.

The city's convention centres, which drew 5.66 million attendees last year, help casino operators sell rooms to business travellers on weekdays. Mandalay Bay guests are almost all convention goers during the week as hotel

[bongo66]

A stoush looks certain with Sky City looking to get board representation:


Sky City betting on casino board seat
19 June 2004

Sky City Entertainment managing director Evan Davies has hinted at ambitions to join the board of Christchurch Casino after the company cleared the final hurdle to buy into the landmark gambling business.


Sky City yesterday won clearance from the Casino Control Authority to take a 40.5 per cent stake in Christchurch Casinos Ltd (CCL) for $93.75 million, despite bitter opposition from CCL chairman Barry Thomas.

Thomas, whose Skyline Enterprises business owns a matching 40.5 per cent stake in the casino, had accused Sky City of trying to muscle in on the casino and has vehemently opposed the deal.

Yesterday, Mr Davies said he had no problem working with Mr Thomas, and said taking a seat on the board was a possibility in the future.

"It's a big investment for us... I like to think I've got something to offer," Mr Davies said.

Sky City has bought the stake from UK gambling house Aspinall. Aspinall has two seats on the board, and Mr Davies said he expected that to continue.

"Sky City is spending $93 million and we want to make sure that's properly represented."

But last night Mr Thomas said a seat on the board was not an automatic right under the constitution.

He said he would not comment on whether he could work with Mr Davies.

"I think they will get their shareholding but what happens after that... I can't say.

"I'm surprised that the board of Sky City who have portrayed such keen governance and asset assessments would spend the thick end of $100 million without doing proper due diligence or securing board representation."

Mr Davies said he had worked with Mr Thomas since 1997 on the board of the Queenstown casino.

Asked whether he could work with Mr Thomas on the casino board, Mr Davies said it was a query probably better put to Mr Thomas himself.

"I have no trouble at all with him," Mr Davies said. "It's Barry that has expressed the concerns. He is going to have to decide whether he will continue."

"We are there now, we are not going to go away."

In CCL's submission to the Commerce Commission, the Thomas camp had argued Sky City's interest would affect the individual flavour of the casino.

Mr Thomas had pointed out Sky City's ownership would give it an interest in five out of six casinos in New Zealand.

In the submission, CCL claimed Sky City had already set its sights on buying a majority stake, and had approached the remaining minority shareholders.

The Commerce Commission and the Overseas Investment Commission have already cleared the deal, and getting the nod from the Casino Control Authority was the last hurdle.

Mr Davies said he was always hopeful the deal would get the nod, but once the Commerce Commission cleared it he was confident it would happen.

Sky City said it would now move to complete the formalities of the transaction and looked forward to its involvement in CCL.


Can any boffins out there tell me why SKC do not have automatic representation on the CH CH Casino board regardless of anything Barry Thomas' says?

TIA, Bongo

[Gryffyn]

I think existing board appoint other board members etc.

[craic]

Probably because board members are elected. With 40+% it is only a matter of waiting till the next AGM or whatever.

[bongo66]

The war of words has begun. Surely a precedent has been set with Aspinalls 2 seats and SKC purchase means that should continue?


Sky City heads for clash on board

21.06.2004


Sky City Entertainment managing director Evan Davies expects to join the board of Christchurch Casinos now the company has cleared the final hurdle to buy into the landmark gambling business.

But Christchurch chairman Barry Thomas remains vehemently opposed to the Auckland company's involvement.

Sky City on Friday won clearance from the Casino Control Authority to take a 40.5 per cent stake in Christchurch Casinos for $93.75 million, despite a bitter fight from Thomas.

Thomas, whose Skyline Enterprises business owns a matching 40.5 per cent stake in the casino, had accused Sky City of trying to muscle in and has vehemently opposed the deal.

Davies said he had no problem working with Thomas and taking a seat on the board was a possibility.

Sky City has bought the stake from British gambling house Aspinall, which had two seats on the board.

Davies said he expected that to continue.

"Sky City is spending $93 million and we want to make sure that's properly represented."

But Thomas said a seat on the board was not an automatic right under the constitution. He said he would not comment on whether he could work with Davies.

"I think they will get their shareholding but what happens after that ... I can't say.

"I'm surprised that the board of Sky City, who have portrayed such keen governance and asset assessments, would spend the thick end of $100 million without doing proper due diligence or securing board representation."

Davies said he had worked with Thomas since 1997 on the board of the Queenstown casino.

"I have no trouble at all with him," Davies said. "It's Barry who has expressed the concerns. He is going to have to decide whether he will continue."

The the game begin, Bongo

[Gryffyn]

Not good if they all take eye off the ball while sorting this.

[bongo66]

A reliable source tells me that the high rollers room at SKC AK has had a great year so far.

A 30 year old Chinese National with 37M in his SKC account has lost 10M this last year.

The High roller room has also been busier than usual.

As I indicated when SKC mooted the Darwin purchase, my feelings were that Darwin was being looked at as an alternative for SKCs large book of high rollers to keep gambling at a SKC venue. Something a casino needs to do is keep the high rollers gambling for as long as poss as the odds then fall further in the casions direction that they will gain the monetary advantage.

Get out there ans spin that wheel, Bongo

[lanenz]

Hi Bongo. I think your comments have some merit. with Darwin. SKC will see Darwin as an important site geographically to capture the junket market. Darwin is not being used as an alternative but an addition. They will book players to play at these various sites to nullify the boredom of a single site.
As for the odds to go in the casinos favour. The odds stay the same but revenue is simply made by turnover.
SKC have been for a long time aggressively seeking international players. Providing they offer excellent service they will continue to build up there client base.
Your comment about the Chinese National makes interesting reading.

[bongo66]

quote:Originally posted by lanenz

Hi Bongo. I think your comments have some merit. with Darwin. SKC will see Darwin as an important site geographically to capture the junket market. Darwin is not being used as an alternative but an addition. They will book players to play at these various sites to nullify the boredom of a single site.
As for the odds to go in the casinos favour. The odds stay the same but revenue is simply made by turnover.
SKC have been for a long time aggressively seeking international players. Providing they offer excellent service they will continue to build up there client base.
Your comment about the Chinese National makes interesting reading.


Hi LaneNZ, my comment about casinos wanting gamblers to stay longer at their venues(esp high rollers)and the odds then going in the casinos favour are true. The odds dont actually change-i dont think-but the fact that players stay longer mean they are more likely to lose to the casino. This is from my own practical experience AND it is well known in the industry.

Going back to the Chinese national, it is indeed interesting that you point out the boredom factor as my source tells me that that is what the gambler was talking about-the Darwin casino is another feather in SKCs cap to keep their high rollers happy-for you would have to be bored with life to get excitement from trying to lose 37M!!.

This whale gets all his expenses paid for by SKC-yes even air fares ,for that doubting thomas out there who said they didnt.What i was surprised about is they had high rollers with such large accounts.

Let it ride baby!! Bongo

[Halebop]

quote:Originally posted by bongo66

...This whale gets all his expenses paid for by SKC-yes even air fares ,for that doubting thomas out there who said they didnt.What i was surprised about is they had high rollers with such large accounts.

This and the commissions they pay to to attract the highrollers is the reason why this business tends to be quite low margin. They hope to make up for it with the volume. It is a highly volatile source of cashflow given that you are dealing with much smaller numbers of players. You only need a few "phat-cats" to stop coming or one to win big and you've got a nasty hole in your numbers. Although the locals shoving coins into slot machines is not very exciting, the cashflow is a lot more dependable.

I certainly hope they didn't buy two Australian Casinos just to develop their "high roller" business. It's a relatively cheap and useful add-on but not a stand alone business strategy.

[bongo66]

HB, I understand that Highrollers are an important part of ANY casinos fit. SKC is no acception. It just adds another tool to their shed.

While it can be volatile-Burswood is a good example of what not to do-SKC have managed their HR biz well and are benefiting for that good management. Associated costs with bringing HRs in barely rate on an expense scale when you are talking millions.

Ill take evens, Bongo

[lanenz]

What hurt Burswood Casino is I believe they got raped by a few big players in the past. I think i am right by saying that they used to have quite high maximum on there baccarat tables. This caused them to be more exposed should a big player get a roll on. SKC plays with a conservative maximums on their tables by internation standards. i.e 100k is generally their top with overseas players.
Even though SKC have performed well, especially at their Auckland site, they have had a few miserable failures as well. Village cinemas,Argentina and Canbet.In the casino game there can be more than just a meaningless swing. :-

[bongo66]

100K a hand was what china boy was playing Blackjack with.

[lanenz]

Hi Bongo.You will find it being baccarat not BJ. BJ only has a 5k max per box. 7 boxes per table gives a max 35k per round

[bongo66]

LaneNZ, im sure my guy said BJ, but my memory aint as good as it once was.

B

[nest]

just to put my oar in, the 'junkets' are 95% baccarat players, not that they are real junkets. you might think they are playing with a lot of money but this is peanuts to these guys. nice to see the stock moving slowly up again. its all good in the long term i am sure.

[bongo66]

A delay with the conference building?

[stolwyk]

Hi Guys,

Please disregard my guided forecast made some time ago. There have been so many changes caused by the activities of SKC (Darwin, Christchurch, Adelaide and the delay with the Conference building), that the guided profit data are not realistic anymore.

Gerry

[CAM]

quote:Originally posted by bongo66

A delay with the conference building?


Not sure about that but I did see an advert in the paper...think it was the herald....promoting an upcoming liftout in the paper of the new sky city conference center and what it offers. Sorry can't remember date of liftout and the paper was used to light the fire!
Pretty sure it was Saturdays Herald on the bottom right of a page.

[CAM]

For those interested the ad for the supplement is in todays Herald.......page B4

"Auckland has a new and exciting purpose built convention centre, developed to meet increasing demand from both local and international markets.

On Thursday 29 July 2004 the Herald will publish the official SKYCITY Auckland Convention Centre supplement, detailing its benefits, innovative services and vision for the future.

Don't miss your chance to advertise - please contact.....blah blah blah"

[bongo66]

Its all ours this Friday. Hope it is a good one:


Friday July 16, 2:32 PM
NZ-Based Skycity Gets Nod to Buy Australian Casino

SYDNEY, July 16 Asia Pulse - Gaming and entertainment company Skycity Entertainment Group Ltd (ASX:SKC) today said it had received regulatory approval to buy the Darwin casino and hotel complex in the Northern Territory (NT) for $A195 million ($US140.51 million).
The New Zealand-based company, which owns Adelaide Casino, is buying the Northern Territory operation from Las Vegas based MGM Mirage Inc.

It said it had received consent from the NT government as well as approval from the Foreign Investment Review Board and could now settle the transaction with MGM Mirage - five months after it first announced plans to acquire the property.

Settlement date will be July 22 and the casino will be renamed Skycity Darwin.

Skycity said the purchase would be funded by additional senior debt provided by existing lenders and was the second Australian property added to its portfolio, after it bought former Adelaide Casino from the South Australian government in 2000.

Skycity managing director Evan Davies said expansion within the Australasian gaming environment was becoming more and more challenging to achieve as the gaming sector tended to lean towards consolidation.

"Operating in Darwin represents an excellent opportunity for Skycity Entertainment Group to expand its Australian footprint," he said.

"The existing mix of operations at this property also fits well with the Skycity business model, which encompasses the provision of multi-faceted entertainment experiences."

Located three kilometres from the Darwin city centre, Skycity said the property was about 25 per cent larger in gaming machines and table numbers than its most recently opened casino in Hamilton, New Zealand.

"This is a solidly-performing, prominent facility in a region with a favourable economic outlook," Mr Davies said.

"The casino complex is already a major entertainment venue and has the capacity for further development."

However, Mr Davies said major capital outlays were not immediately on the agenda as $A18 million ($US12.97 million) was recently spent on improving the casino and the gaming machines were less than three and a half years old.

"We do not anticipate a need for significant post-acquisition expenditure, beyond immediate branding-related changes," he said.

Shares in Skycity were not traded today. They last traded at $A4.30 ($US3.10).

ASIA PULSE


BTW, was at SKC AK today and the place was buzzing. For a Sunday that is good. The new casino is doing well also. From this casual glance i wouldnt be suprised if revenue is well up on last yuear for this site come August reporting.

B

[Capitalist Pig]

My short opinion, as it is getting late.

SKC is well run company with good management.

Good cashflow.

Well priced but worth holding for yield.

Once its theatres and new casinos are fully functional SKC will need to come up with new high growth ventures to justify its fairly high valuation. Possibilities are concept resorts for Aussie, Asia or the Pacific, event management? Would want to see them avoid standard hotel/resort developments.

Currently holding to see what future developments are in the pipeline.

[truedragon]

Congratulation on the SKC holder today. A good rebound on the share price and too bad I am no longer a holder.

I am looking for opportunity to get back in though.

[CAM]

and it continues this morning....probably people getting in early for the next divi

[Placebo]

Perhaps what we are seeing is increasing confidence in long-term earnings as SKC overcomes the regulatory hurdles in Darwin, Chch and with SKX.

This is going to be a long-term earning stock with a strong divvy, and hopefully continuing shareprice growth. :D

[Shamrock]

Hopefully they can turn Canbet around.

[Placebo]

Or perhaps rename it...
Can'tmakemoney:D

[nest]

canbet...ooohhh....anyone think they will write it off like they did the sth american part of the movie theatre mess??????

[bongo66]

This from Stuff:

Sky City net profit will reach $118m after $107m last year, with its dividend yield rising from 7.6 per cent in 2004 to 8.5 per cent in 2005.

Oh my heart is palptating if this is true:D

Were in the money...sings the tune(badly) Bongo

[Gryffyn]

Ok news if true Bongo - but better yields out there so I hope you're happy from a growth perspective. Will be hard to see the true picture for a while if all the buy ups that have happened but any increase is at least not bad news.

[bongo66]

Im taking my DIV in cash this time and will buy some more when the smoking legistlation kicks in NOV-DEC.

B

[bongo66]

If true though Griff, surely a 10% lift in profit is great news, considering some facilities at SKC AK have been off-line this year-some still are.

The result excludes a full year of revenue from the expanded AK casino and the larger slice of Hamilton Casino, and any revenue from CH CH casino and Darwin.

Im looking forward to Feb 2005 for an indicator of where these purchases maybe going and the full year 2006 when their new AK hotel should be fully included in the frame.

Keep rolling, Bongo

[CAM]

quote:Originally posted by bongo66

Im taking my DIV in cash this time and will buy some more when the smoking legistlation kicks in NOV-DEC.

B


I thought there was no choice but to take it in cash???????

[Gryffyn]

Bongo - if you really think the smoking thing will reduce the share price and it will become cheaper - then why not sell now and buy back later? Or, are you just being cautious and having a bet each way - averaging the risk and return?

[CAM]

Sounds like a fun job....anyone interested
Whats the pay like?


SKC28/07/2004MEETING REL: 1556 HRS Sky City Entertainment Group Limited (NS) MEETING: SKC: Opening & Closing Dates for Nomination of Directors
SKYCITY Entertainment Group Limited advises that the period for nomination of directors to be considered for appointment at the company's annual meeting to be held on 29 October 2004 opens on 29 July 2004, and closes on 29 August 2004. The requirements for a person (other than a director retiring at the annual meeting) to be nominated as a director are set out in clause 17.3(b) of the company's constitution.

[lanenz]

Whats up with Evan and Heather. Has heather got a gun to his head? Or has Evan been sprung for an indescretion? Could it be a woman scourned?
A company like Sky City does not need to bring the wife into such a high profile position. When she had their twins the company and marketing dept were doing fine without her.
Can someone shed any light a logical reason for this?
Or am I way off the mark?

[Gryffyn]

Dodgy - never a good look and perhaps skc management thinking they can do anything.

[lanenz]

How much of an impact will this smoking law have?
The next gambling tax (on the pokies)that has come i does this affect casinos or only pubs?
Any thoughts would be appreciated.
Funny to note that since Evans wife is second in charge the share price has been dipping.

[lanenz]

If Evan can think with his brains instead of his balls im sure they can get back on track. Simple answer, put Heather back in charge of the marketing dept.

[bongo66]

Who bought and sold 11M shares this arvo @ 4.56?

[Gryffyn]

Not me. Are you still in with your recent buys Bongo? You'd be happy with the 428 and the 455 looks better now.

[bongo66]

Im still in Griff but things are volatile...


Not me either, Bongo

[Gryffyn]

They sure are.

[Placebo]

I'm not one to gossip, but... all I can tell you is it was an off-market trade by UBS. Any more than that, I'd have to kill you... ;)

Hey lanenz, what you got against a bit of good old-fashioned nepotism? Surely this is a practice to be encouraged? You seem under the misapprehension that this is some kind of meritocracy ... [:p]

Anyway, what makes you think that, even though she's married to the boss, she ain't the best person for the job?

[CAM]

quote:Originally posted by Placebo

I'm not one to gossip, but... all I can tell you is it was an off-market trade by UBS. Any more than that, I'd have to kill you... ;)



ohhhh takeover rumours huh....they are usually good for the shareprice....and a good time to strike when sentiment is down....especially as its only a short term blip

[CAM]

Larger parcels going through towards the end of the day the last few days....something happening or just normal institutional behaviour???

[nest]

placebo if she was that good she wouldnt be working at skc, she would be working in a company that needed to be turned around and needed great leadership, this is an easy patch for her as its a bit hard not to make money out of a casino. turning management upside down as is being done now is always unsettling. once u lose sight of the individuals who make up a company it all turns rather characterless. its all a numbers game, on and off the floor...

[lanenz]

Hi Nest,
Got to say, I agree that they are doing a lot of restructuring lately. I get the feeling you have some association with SKC. Maybe I know you?
I think Darwin will show some good fiqures in the next couple of years. As I have stated before I think the main attraction was the close proximity to the asian market. Look for good things in the short to medium term there.

[bongo66]

CBA continues to offload. This time 20 cents below their last offload:



Sky City Entertainment Group Limited (NS) (SKC)
SSH: SKC: SSH Notice Received
Monday, 20 September 2004 09:45 (NZ Time)

SKC
20/09/2004
SSH

REL: 0945 HRS Sky City Entertainment Group Limited (NS)

SSH: SKC: SSH Notice Received

NOTICE 24127 DETAILS

Submitted Date : 20-Sep-2004 09:44
Status : Accepted

Substantial : Y Director : N
Add Holder : N Change Holder : Y
Ceased Holder : N Change Nature : N

Issuer Code : SKC Sky City Entertainment Group Limited (NS)
Holder : Commonwealth Bank of Australia and Subsidiaries

Address : Level 2
: 48 Martin Place
: Sydney NSW 1155
Country : Australia

Contact Name : John Paull
Phone : +61 2 9303 6021

Total of Interest : 23137108
Total Issued : 416401490
Total % : 5.56

Class : SKC
Votes Attached : 1

Beneficial
Total of Interest :

Non Beneficial
Total of Interest : 23137108
Current % held : 5.56
Last % held : 8.94
Names : See Annexure B
Provisions : 5(1)(b)(d)
Transaction dates : 5/06/2004-14/09/2004
Total Votes : 23137108
Considerations :

Description :
Documentation
With Notice : Yes
Not Filed : No
Been Filed : No
Number of pages : 7

Date of Last Notice : 04-Jun-2004

Submitted By : John Damien Hatton on 20-Sep-2004 at 09:44

Someone is wrong. I wonder who the buyer was. Are we not allowed to know that too?

Spin that wheel, Bongo

[johna]

Could just be overseas holders selling down our blue chips because of the high exchange rate. I'm almost tempted to pile into WPT myself (although I've already been burnt once there).

[bongo66]

All short term out @ 4.69 Griff :D

[Gryffyn]

Well done.

[bongo66]

Bought HLG @ 3.55. A similar DIV to SKC but a much lower SP should see this one go above 4 bucks...

Aint been wrong so far. Already mined HLG, FPA and SKC for run up to Divs this year(got the div and the rise in SP for FPA) Might as well have another go at HLG!!

Ahh, aint it good when it goes right, Bongo

[nelehdine]

Nice run in SKC over the last few weeks to a close tonight at 485 , probably the highest for 6 months .... little comment on the stock over recent months , a move above $5 might get tongues wagging again !!

Disc: SKC holder

[clips]

that smoking ban talk must have been just smoke and talk..

[Placebo]

Doesn't come into effect until 10 Dec, but my view all along is that the smoking ban is overstated as a risk. Accordingly, have topped up at 445.

[MPC]

Had to finally move up once I sold out.
Moved into NOG though so not too upset

Cheers,
MPC

[halcyon9]

quote:Originally posted by nelehdine

Nice run in SKC over the last few weeks to a close tonight at 485 , probably the highest for 6 months .... little comment on the stock over recent months , a move above $5 might get tongues wagging again !!

Disc: SKC holder



If you look at the chart for the last year

and compare it too the NZX

youll see quite easily why the talk has stopped.

At least it hasnt done a WHS



Too many other charts look far more yummier
RPL, CDL, EBO, MHI just to name a few of my picks

[KW]

May have something to do with an Australian article over here that proposed Sky as a potential take over target by the likes of Unitab or PBl.
However, all the casino companies in OZ (PBL, Unitab and TABcorp) have rocketed lately as well, Sky may just be catching up on fundamentals

[nelehdine]

499 trading , good volume in SKC the last few days, undisclosed seller at $5 and an undisclosed buyer at 495 , interesting viewing for the rest of the week ...

gaming stocks extremely strong in Aussie, SKC looks good value at $5

[Placebo]

Forget it Neheldine, Gryff's picked it to go down this year [:o)]

Accordingly, will be topping up!

[nelehdine]

Gryff picked SKC and SKY ... maybe it's the "Sky" name he doesn't like ?? Two of the best companies on the NZX and both core parts of my long term portfolio. He was tempted to buy WHS when it dipped below $4 , sound like someone who tries to catch falling knives and doesn't like running his profits ( bailed on HBY at 540 if my memory serves me right ). Has probably watched these 2 rally quite hard over recent months and thinks they are due a correction ... I agree over a few weeks maybe , but over 12 months I can see 20% upside in both these stocks no problem. Am awaiting his reasons with interest !!

[Gryffyn]

Nele - I only picked them for a fantasy game without too much careful analysis. In reality I wonder take that risk as it is just a wild punt. SKC is up on rumours of someone taking a major stake so I just punting for a game that it doesn't come off.

Both picked because they could fall drastically if a major external hit - both are in near monopoly positions etc.

As for WHS - you're right, I was tempted and am obviously more temptet now but am still holding off.

Lighten up lads - I clearly disclose my holdings and calls unlike many who seem to just diss others without equal clarity as to their dealings. My own portfolio is up well over 50% for the year so I'm happy even if I haven't been perfect in all my deals - BGR grrrrr still believe it's undervalued.

PErsonally hope SKC does ok as Bongo, a stalwart holder, deserves some good fortune.

[Placebo]

Gryff, well done on yr 50pct. A good result. I'm just dissing ya re the game, I know it's a game, all good fun. Was tempted to pick NOG as my "falling riser", but knew that would probably get me banned :D

Anyway, SKC still inching up. $5 by Xmas, I hope. Not sure if yr right about it going up on rumours of takeover. Could just be catching up on its fundamentals. Has lagged a bit in the past 12 months.

[Gryffyn]

Well, time will tell as always. I think its been a disappointing share the latter half of this year but the late run has changed that a bit.

I'm avoiding high yield shares at the moment in general but I can see why people would have it for income and a defensive position.

For me to do well in the game next year a Nat-NZ first coalition need to get in and remove the monopoly and close down Asian immigration. Then see what happens to the share price ;)

[Placebo]

Closed above 500 (501 with a seller at 504). Well done Neheldine.

[Gryffyn]

Well, all rises till Dec 6th make it better for the game don't they? Further to fall and all that ;)

Maybe people are going defensive?

[AJ]

Still heading up.

At 517 now high of 518

Anyone want to take a guess at how high it will go? :)

I'll guess a high 555 achieved in Feb next year. Then I think talk about their half year result might start pushing or holding the price down a bit. Seems the price always dips for SKC whenever theres any talk, good or bad.

Disc : Holding SKC

[Gryffyn]

Down damn you, down.

[Placebo]

AJ: I'm expecting them to make a statement early in the New Year about the impact of the smoking ban on, say 2-3 months of revenues in the casinos/hotels. Speculation about impact of the ban has kept a lid on the price I feel. SKC have predicted a $10m negative impact, any indicator it will be less than this will be positively received in the market.

Also related to that I'm predicting some downward pressure from 10 Dec on as fears about the smoking ban kick in again. But hopefully will stay above $5.

Disc: Largest share of my portfolio (by value)

[AJ]

Yeah, could stop moving after 10th Dec, but don't think it should as people wouldn't be pushing up the price at the mo because they are trying to get in before the 10th.

Also I saw a Ad on TV last night from Sky City (a pretty bad ad heheh) and it said that it was Smokefree already. so maybe they started it a week early to try an give the impression that it won't affect them or their customers.

[halcyon9]

quote:Originally posted by nelehdine
doesn't like running his profits ( bailed on HBY at 540 if my memory serves me right ). Has probably watched these 2 rally quite hard over recent months and thinks they are due a correction ... I agree over a few weeks maybe , but over 12 months I can see 20% upside in both these stocks no problem. Am awaiting his reasons with interest !!



add MHI to that...He sold before $6 (MHI subsequently rose up to 40% in the next 8 weeks). I did warn him:D
Grff needs to learn to "run his profits" as we all do.

highlighted in red ....just so we don't start a battle;)

[Sideshow Bob]

Precious little comment/rumour in SKC in recent weeks. Been a great run in those doomsayers who were going on about the Dec 10th smoking regs - ie yesterday!!

Only wish i'd bougth some more at around 440 cps.

Staying loyal to these guys, since bought into the inital listing once Brierlys sold.

SSB

[craic]

495cps is not a bad number for this one. There has been constant pressure from those who didn't want to take a risk with the smoking ban and bailed out in the past week or so. The hard evidence is that a smoking ban tends to improve business.

[lanenz]

As E.D has commented. Expect a drop of around $10m for next 12 months.

Unless there is an exemption for the big players from overseas, the smoking ban will ping the SKC for the next 2 to 3 years.

Junket players (high rollers) are extremely fussy about having the right playing conditions. If players who like to smoke while playing then they won't want to come to NZ and gamble. There are plenty of casinos around Australia and Asia that allow gamblers to smoke.

When it comes to smoking, gambling or drinking go hand in hand. So pubs RSA Casinos will be impacted no question.

The positive is that it will attract other patrons that wouldn't have a bar (no pun intened) of these places when smoking was permitted.

5 years time expect a turnaround as if nothing had happened.

In the next couple of years expect flattish profits but still not bad if you can return $100m plus.

They still have a monopoly and until that changes even Stevie Wonder (as CEO) would still make money in this company.

[Placebo]

This in Granny Herald today...


quote:Sky City Entertainment revised its 2005 profit higher yesterday after it adopted International Financial Reporting Standards.

Net income in the year to June 30 was $106.4 million from a previously reported $104 million.

Profit in the six months to December 31, 2004, was $59.6 million under the new standards. The company reports its half-year results for the six months to December on February 22.


Now we all know there's lies, damned lies and accounting, but is this a shifting of the goalposts to suit themselves or actual positive news. Lord knows they desperately need some...

[Paper Tiger]

quote:Originally posted by Placebo

This in Granny Herald today...


quote:Sky City Entertainment revised its 2005 profit higher yesterday after it adopted International Financial Reporting Standards.

Net income in the year to June 30 was $106.4 million from a previously reported $104 million.

Profit in the six months to December 31, 2004, was $59.6 million under the new standards. The company reports its half-year results for the six months to December on February 22.


Now we all know there's lies, damned lies and accounting, but is this a shifting of the goalposts to suit themselves or actual positive news. Lord knows they desperately need some...

Neither, it is more bad journalism from the Herald.

Read yesterdays announcement from SKC.

[Placebo]

Hmmm, yeah, see what you mean. Although having said that, I'm now even more confused. They changed some accounting procedures and found a bit more money (though it's magic stuff like goodwill and depreciation).

Geeze I'm glad I'm not an accountant [:p]

[bongo66]

50M bucks worth going through on Friday. Whats up there?

B

[bongo66]

Does anybody know how much exposure/benefit(if any) SKC has in Kiwi Casino.

Is it part of SKCs share of CH CH casino or an entity in itself?

Roll those dice for the 22nd, B

[lanenz]

quote:Originally posted by bongo66

Does anybody know how much exposure/benefit(if any) SKC has in Kiwi Casino.

Is it part of SKCs share of CH CH casino or an entity in itself?

Roll those dice for the 22nd, B
SKC has about 40.5% holding of CC Casino. I havent been following this stock too much and I am surprised to learn that C C Casino operates this online gaming site. I dont recall seeing any info about the casino asking for an online gaming license but they must have annouced it at some stage.

[bongo66]

quote:Originally posted by lanenz


quote:Originally posted by bongo66

Does anybody know how much exposure/benefit(if any) SKC has in Kiwi Casino.

Is it part of SKCs share of CH CH casino or an entity in itself?

Roll those dice for the 22nd, B
SKC has about 40.5% holding of CC Casino. I havent been following this stock too much and I am surprised to learn that C C Casino operates this online gaming site. I dont recall seeing any info about the casino asking for an online gaming license but they must have annouced it at some stage.


Hey Lanenz, i am aware that SKC owns part of CH CH Casino but what im NOT aware of is whether that includes Kiwi Casino, which I understand has been going for many years.

B

[lanenz]

The best i can come up without looking at the annual report is that...

3rd August 2000

Toronto based CryptoLogic have announced another contract from a traditional casino operator for the provision of online gaming software. Christchurch Casino on New Zealand's South island will be developing the online version at www.Kiwicasino.com. The casino is co-owned by England's Aspinalls Group and local company Skyline Enterprises.


Another bit of info is from the online gaming site - "about us'

The online casino that offers you the reassurance of a reputable land-based casino company.

Kiwi Casino is an independent offshore operation forming part of Australasia's very finest land-based casino group - Christchurch Casinos, based in Christchurch - New Zealand. In maintaining this reputation, your enjoyment, security, and excellent customer service, are held in the highest regard.

Kiwi Casino's setting is that of a mountainside plateau in the wilds of beautiful New Zealand. Kiwi Casino provides a rewarding haven of excitement and tranquillity to those who enter this luxuriant escape.

Kiwi Casino insists on the finest software and cash systems. Kiwi Casino uses software developed by the new world leaders in internet gaming software, Playtech. All wagers are securely transmitted in U.S. dollars using XPRESS PAYMENT SYSTEMS LIMITED - the leading edge payment processor offering you the latest payment methods, the fastest payouts and the most secure systems.

Kiwi Casino is currently licensed and operated from Antigua.

About the Christchurch Casinos Group
The Christchurch Casinos Group is one of Australasia's prestigious casino organisations. Its land-based casino interests in New Zealand attract visitors from around the world including Australia, Asia, Europe and North America.

what i dont get is how does gambling online with this company provide you with tranquility?

[Tom Hall]

quote:Originally posted by lanenz

The best i can come up without looking at the annual report is that...

3rd August 2000

Toronto based CryptoLogic have announced another contract from a traditional casino operator for the provision of online gaming software. Christchurch Casino on New Zealand's South island will be developing the online version at www.Kiwicasino.com. The casino is co-owned by England's Aspinalls Group and local company Skyline Enterprises.


Another bit of info is from the online gaming site - "about us'

The online casino that offers you the reassurance of a reputable land-based casino company.

Kiwi Casino is an independent offshore operation forming part of Australasia's very finest land-based casino group - Christchurch Casinos, based in Christchurch - New Zealand. In maintaining this reputation, your enjoyment, security, and excellent customer service, are held in the highest regard.

Kiwi Casino's setting is that of a mountainside plateau in the wilds of beautiful New Zealand. Kiwi Casino provides a rewarding haven of excitement and tranquillity to those who enter this luxuriant escape.

Kiwi Casino insists on the finest software and cash systems. Kiwi Casino uses software developed by the new world leaders in internet gaming software, Playtech. All wagers are securely transmitted in U.S. dollars using XPRESS PAYMENT SYSTEMS LIMITED - the leading edge payment processor offering you the latest payment methods, the fastest payouts and the most secure systems.

Kiwi Casino is currently licensed and operated from Antigua.

About the Christchurch Casinos Group
The Christchurch Casinos Group is one of Australasia's prestigious casino organisations. Its land-based casino interests in New Zealand attract visitors from around the world including Australia, Asia, Europe and North America.

what i dont get is how does gambling online with this company provide you with tranquility?
I can see no [u]obvious</u> reference to Kiwi casino in the Annual Report, But even the references to Christchurch casinos are very general.
How does this company provide you with tranquility?
Well once you've lost everything you get to appreciate the tranquility of having no pocessions to worry about.

[lanenz]

How does this company provide you with tranquility?
Well once you've lost everything you get to appreciate the tranquility of having no pocessions to worry about.
[/quote]Ok. is that how i get peace with myself. No money, no worries

[Tom Hall]

quote:Originally posted by lanenz


Ok. is that how i get peace with myself. No money, no worries

I'm willing to help you try lanenz, Give all your money to me I'll suffer the worries. BTW part of the problem with getting information about Kiwi Casino may lie with Barry Thomas I understand he prefers to treat his investors like he'd grow mushrooms.

[lanenz]

I dont believe that the online business has anything to do with NZ gaming. It is licensed and operated out of Antigua. Much like Canbet was originally operated out of Aus then the UK but owned by Sky City. another thing did Aspinalls keep that part of the business when they sold their stake to Sky City.

maybe Skyline Ent may shed some light.

[minimoke]

Pretty positive reults out today which seems to suggest they have got over the smoking bans / restrictions

[Placebo]

Here are the main points:


quote:1H06 COMPARED TO 1H05
o Revenues up 10.4% to $386.3m (+$36.5m)
o EBITDA up 2.5% to $154.6m (+$3.8m)
o EBIT down 1.6% to $119.7m (-$1.9m)
o Net Profit down 1.7% to $58.6m (-$1.0m).
1H06 COMPARED TO 2H05
o Revenues up 17.1% to $386.3m (+$56.5m)
o EBITDA up 19.0% to $154.6m (+$24.7m)
o EBIT up 19.3% to $119.7m (+$19.4m)
o Net Profit up 25.2% to $58.6m (+$11.8m).

KEY ELEMENTS OF THE 1H06 RESULT
o Group Net Profit has shown strength in the post smoking ban implementation

period with the 1H06 net profit result marginally below the 1H05 period. The
majority of the 1H05 comparative period was prior to the introduction of
smoking bans in New Zealand and smoking restrictions in South Australia in
December 2004

o 1H06 Net Profit at $58.6m is significantly ahead of the 2H05 result of
$46.8m.
2H05 was the first reporting period post smoking ban introduction in New
Zealand and smoking restrictions in South Australia
o Earnings performance (EBITDA, EBIT) shows strength across the Group, as
summarised below:

- SKYCITY Auckland in line with 1H05 (despite smoking bans) due to strong
performances from gaming, convention and restaurant operations and the new
revenue stream from the SKYCITY Grand Hotel

- SKYCITY Adelaide result for 1H06 turns around the result reported for 2H05
with the expanded gaming area, North Restaurant and Loco Bar facilities
attracting new patronage and a favourable response from existing customers

- SKYCITY Darwin continues to perform strongly, despite removal of the
community slots rebate from 1 July 2005

-SKYCITY Hamilton's revenues and earnings were supported by the new
entertainment facilities acquired as part of the acquisition of the Riverside

Entertainment Centre in September

- Christchurch Casino performing in line with prior period, despite the
smoking ban implications

-SKYCITY Queenstown down on prior period due to a combination of factors
including limited international VIP/commission play and lower visitation
numbers to the Queenstown/Southern Lakes region. Whilst Queenstown is an
important component of the overall SKYCITY mix, its financial performance
remains relatively immaterial to the overall Group result

- SKYCITY Leisure held revenues and earnings despite increased competition
in the Auckland cinema market and a lack of strength in film product
during 1H06.

Mr Market likes it, up 32c and busts through $5

[cujodog]

What smoking ban:D

[CAM]

Could see a re rating of this one as people look for the defensive stocks to put their money in.
It looks as though they have got over the smoking ban impacts sooner than expected.

[cujodog]

quote:Originally posted by CAM

It looks as though they have got over the smoking ban impacts sooner than expected.


Once a gambler, always a gambler. Thank god for the addicts[8D]

[Placebo]

Cujo! And we thought we'd lost you!!

Sell the family home and buy some! Go on:D:D

[cujodog]

quote:Originally posted by Placebo

Cujo! And we thought we'd lost you!!

Sell the family home and buy some! Go on:D:D


No I'm not getting back into NZ shares, but I really do laugh at all the doom and gloom merchants that had written off this share. Don't they realise that gambling is an addiction and they will always come back for more.

[StainlessSteelRat]

I wonder how CBA feels about selling out 40% of it's stake last week. By my reckoning they are about $3m out of pocket on today's rise. [:o)]

[Placebo]

I would imagine there will be some profit-takers on the spike that has occurred today, but I too am optimistic that this signals a re-rating of SKC. It has been flat mainly because of uncertainty over the impact of the smoking ban. Today's news seems to me to remove most of that uncertainty.

Disc: Sold down my holding but still think it's a good defensive stock.

[bongo66]

Gotta love those anal-ysts:D...

[sniper]

quote:Originally posted by cujodog


quote:Originally posted by Placebo

Cujo! And we thought we'd lost you!!

Sell the family home and buy some! Go on:D:D


No I'm not getting back into NZ shares, but I really do laugh at all the doom and gloom merchants that had written off this share. Don't they realise that gambling is an addiction and they will always come back for more.


And who is the biggest doom and gloom merchant of them all?

You!:D

[cujodog]

quote:Originally posted by sniper


quote:Originally posted by cujodog


quote:Originally posted by Placebo

Cujo! And we thought we'd lost you!!

Sell the family home and buy some! Go on:D:D


No I'm not getting back into NZ shares, but I really do laugh at all the doom and gloom merchants that had written off this share. Don't they realise that gambling is an addiction and they will always come back for more.


And who is the biggest doom and gloom merchant of them all?

You!:D


Just go and check my picks for the Investor contest and eat your words[8D]

[nest]

well, this little bunny is glad he kept hers!! patients is a virtue they say..... yoh dood, ianz, hows life in the tropics?

[Halebop]

quote:Originally posted by nest

well, this little bunny is glad he kept hers!! patients is a virtue they say..... yoh dood, ianz, hows life in the tropics?


Is that little bunny also gender confused? [:p]

[lanenz]

quote:Originally posted by nest

well, this little bunny is glad he kept hers!! patients is a virtue they say..... yoh dood, ianz, hows life in the tropics?
hi Nest

Alls well here thanks.

Good to see you held on to them a little longer.

A good result overall. i think the change in the accounting had a little to do with. Evan lining himself up with a nice bonus this year. Alister Ryan will make sure of that.

i believe things will be hotting up with negotiations soon? Is there still a strong split between the 2 groups? let me know how things develop.

ps. please send my regards to everyone especially send my love to Paul Walsh and apologies to E D that i wont be at the table this year.

[bongo66]

Well...analysts and negative tyre kickers on this forum were wrong.

I dont hear the naysayers coming out in force like they have over the last few profit announcements-where are you?

Good managing of difficult situations-smoking and gambling relulations-has enabled SKC to get back on track for the last 6 months. Going forward is going to be difficult but davies and co have MY support(except for owning cinemas)[:p]

You have to ask the quality of analysts profit forecasts. Do they visit regularly the casinos they "analize? I do. Auckland has been noticeably busier than the previous half-years'

Nothing like a hands-on approach when investing. Numbers dont tell the full story.

B

[Placebo]

Forsooth Bore upgrades its valuation by more than 10%!