SKC - Sky City

[Norwest]

Rob Campbell buying more shares

https://www.nzx.com/announcements/359638

[winner69]

Rob Campbell buying more shares

https://www.nzx.com/announcements/359638

Suppose 5000 more a vote of confidence

What you make of all free shares issued to the Exec for doing a great job? .....though some to have been forfeited

[Norwest]

You need to pay people commensurate with the job that they do, these share rights issues are effectively salary at risk as part of their employment agreement.
e.g. Graeme's target under DSTI is 50% of his base salary.

Remember back in April, Graeme took a 40% pay cut, as did the CFO and COO till the end of 2020 and the board's fees were reduced by 50%.

There is no doubt that Graeme, Rob and the exec team have worked very long and hard hours during this Covid outbreak to sail the ship in the right direction.

I have no problem with them being issued these shares as part of their salary, infact I believe it is a good thing.

[Waltzing]

Its a casino stock.. lots of people being paid high salaries to keep the gambling and entertainment machine going. Casino stocks always pay management position well to keep pushing entertainment message. Lots of over paid upper management but thats what you do else they will go and talk rubbish in another casino.. Working in management in these companies is as addictive as it is for some punters, just like horse racing.. You should see the types horse racing attracts..

DSIC: trade this stock.

[NZSilver]

It will be a solid investment long term - very good property and license assets.

[Waltzing]

"It will be a solid investment long term - very good property and license assets."

exactly.

[Balance]

"It will be a solid investment long term - very good property and license assets."

exactly.

And monopolistic in nature in each of the cities - Auckland, Adelaide, Hamilton & Queenstown.

[Balance]

Comes 2021, comes negative interest rates.

Hugh yielding stocks like SKC will be re-rated massively imo and I fully expect the sp to have at least a $5 in front of it within the next 2 years.

Seen it all before when interests dropped sharply in the 1990s and 2000s.

Except that this time, with negative interest rates I will add - ‘you ain’t seen nothing yet!’

[dibble]

Comes 2021, comes negative interest rates.

Hugh yielding stocks like SKC will be re-rated massively imo and I fully expect the sp to have at least a $5 in front of it within the next 2 years.

Seen it all before when interests dropped sharply in the 1990s and 2000s.

Except that this time, with negative interest rates I will add - ‘you ain’t seen nothing yet!’

Not so far back pension fund models relied on 6% return (I recall one using 7%). Current environment makes even 3% a big challenge. That's a huge difference, they will be burning capital. If you believe interest rates will stay "low for long", and that SKC reverts to a half decent 5%+ divvy (given all the new shares on issue 20c seems unlikely for a while) consider the appeal for the non-ethical international pension fund.

[Biscuit]

....consider the appeal for the non-ethical international pension fund.

I've never really understood the whole "non-ethical" thing about SKC. They sell entertainment to people who want to buy it. The entertainment is not damaging per se. Almost all companies will do their level best to get you to buy something you don't need and can't afford with money you don't have. Gambling can be addictive and can damage people's lives. The same is true, to some degree, of many products and services. SKC would be one of very few companies who go out of their way to identify problem customers and discourage them from their consumption. I'd call that within the bounds of normal ethical behavior.

[hogie]

I've never really understood the whole "non-ethical" thing about SKC. They sell entertainment to people who want to buy it. The entertainment is not damaging per se. Almost all companies will do their level best to get you to buy something you don't need and can't afford with money you don't have. Gambling can be addictive and can damage people's lives. The same is true, to some degree, of many products and services. SKC would be one of very few companies who go out of their way to identify problem customers and discourage them from their consumption. I'd call that within the bounds of normal ethical behavior.

Exactly the view I have ... I'm glad I'm not alone.

SkyCity has a "Surveillance" team of 50-100 people constantly watching people inside the Casino and looking for signs of "gambling distress" ... all staff are trained to look out for the signs that guests are no longer having fun and will eject them from the casino if this is detected (hence SkyCity may lose their casino licence). There is also a permanent police/government information sharing agreement due to the highly regulated nature of the business. I don't believe the same can be said for the pokies at the local workingmans club or RSA! I always find it's a huge double standard that the TAB and Lotto get to advertise on prime time TV where SkyCity is not allowed to advertise anywhere except for brand signage around their precinct ... you may notice the complete lack of "Casino" signs except for the single one at the front of the building ... this is because of regulations.

[winner69]

No matter whatever others think that casino in Auckland it is a den of iniquity .. and that's being kind.

Out of curiosity went inside once - a couple of minutes in a dingy area squelching through wet carpet was enough to put me off for good....and then some poor souls heading off to the carpark (no doubt to check on the kids).

was staying at the place for a conference - not by choice

[NZSilver]

Should move towards 3.50.

[Waltzing]

3.50? No please please not yet... awa NOOOOOooooo... waste of a good pandemic.. cant these newbies understand... no dividends... low profits... no asian high rollers.... oh well we will trade the sell off back from 4 dollars then..

the new chairs in the bar areas in hamilton very nice pitty the champagne bar is closed!

[Biscuit]

... that casino in Auckland it is a den of iniquity ..

Den of iniquity is a lovely phrase. Apparently taken from Jesus's phrase "den of thieves" referring to traders working in the temples. Does not seem to apply to gambling particularly though. "Iniquity" apparently refers to wickedness or being sinful. From Jesus's perspective that would principally mean transgression of the commandments of the God of the Bible, the ten commandments. Pretty much any trader open on a Sunday would meet that threshold.

[Waltzing]

that so called church in south auckland is a den of well... slick tribal leaders ... quick fleecing dinner every day in the lords name... not sure whats worse casinos that say they are gambling.... or prayer that is ? local prayer group here meet in each other homes... we could shut down horse racing and sport betting as well...better stop looking at that horse painting on the wall... that horse must have made a lot of people a lot of money on the track and a lot of sport gamblers a lot of money...

[Balance]

Deleted deleted

[dibble]

Exactly the view I have ... I'm glad I'm not alone.

SkyCity has a "Surveillance" team of 50-100 people constantly watching people inside the Casino and looking for signs of "gambling distress" ... all staff are trained to look out for the signs that guests are no longer having fun and will eject them from the casino if this is detected (hence SkyCity may lose their casino licence). There is also a permanent police/government information sharing agreement due to the highly regulated nature of the business. I don't believe the same can be said for the pokies at the local workingmans club or RSA! I always find it's a huge double standard that the TAB and Lotto get to advertise on prime time TV where SkyCity is not allowed to advertise anywhere except for brand signage around their precinct ... you may notice the complete lack of "Casino" signs except for the single one at the front of the building ... this is because of regulations.

I wouldnt try to think too hard about the logic of it all (Mcdonalds is hardly good for humanity or the planet but I dont see that on many "avoid" lists). Just important to remember that fashionable marketing parameters, which influence the SP, are in play. You cant fight it.

[tango]

Exactly the view I have ... I'm glad I'm not alone.

SkyCity has a "Surveillance" team of 50-100 people constantly watching people inside the Casino and looking for signs of "gambling distress" ... all staff are trained to look out for the signs that guests are no longer having fun and will eject them from the casino if this is detected (hence SkyCity may lose their casino licence). There is also a permanent police/government information sharing agreement due to the highly regulated nature of the business. I don't believe the same can be said for the pokies at the local workingmans club or RSA! I always find it's a huge double standard that the TAB and Lotto get to advertise on prime time TV where SkyCity is not allowed to advertise anywhere except for brand signage around their precinct ... you may notice the complete lack of "Casino" signs except for the single one at the front of the building ... this is because of regulations.

That's very interesting on the advertising. I have seen an online casino advertising on television but I haven't seen Sky advertising their online casino on TV

[hogie]

That's very interesting on the advertising. I have seen an online casino advertising on television but I haven't seen Sky advertising their online casino on TV

SkyCity is prohibited from advertising their online casino in NZ ... even though it's only available for people in NZ. You will not see any print media, tv advertisements, mailers etc.
The online casino is not allowed to be hosted in NZ so is therefore hosted offshore in Malta as a separate business entity ... however SkyCity has pledged to still pay tax on the profits made by the online casino (even though by law it does not have to).

I guess the business leaders can try their best to be good corporate citizens but at the end of the day the haters are still going to hate ... those of us who have an open mind can appreciate it's actually an awesome entertainment and hospitality company doing some really cool and unique things!

[Norwest]

11984

SKC was the top performer by a long shot on the ASX200 for September 2020, up over 22%, whilst the ASX200 overall fell 4%

[sb9]

11984

SKC was the top performer by a long shot on the ASX200 for September 2020, up over 22%, whilst the ASX200 overall fell 4%

Keep putting on more gains $3.02 currently....

[Norwest]

My notes from the Virtual AGM.
Other companies should really pay attention to this as some of the virtual AGM's have been a real disappointment in their live technology use. SKC's Videos, Transitions, Audio and Visual quality was outstanding.

Challenging Year thus Far. (obviously)

They were very clear no further capital raising.

Thanks to government for wage subsidy. Hundreds of people still have jobs because of Wage Subsidy, otherwise they wouldn't be employed today.

Really odd comment from Graeme, "our balance sheet allows us sufficient liquidity to sustain one or two further lockdowns" but they currently have half a Billion of available liquidity?

International business won't be back for a year at least. Not expected to have international tourists back until 2022 at least.


Group is now fully carbon neutral in (NZ was in FY19, Adelaide in FY20)
New "6th" Pillar to "Create Value for its Shareholders" while being conscious of the area's they operate. (bit of a no brainer you would think!)

#1 objective is to "Stay Open" - lockdowns obviously hurting them a lot, pretty self explanatory.
Graeme Spoke multiple times about "Able to Stay Open"... I suspect they are very nervous if they keep getting locked down again and again. (obviously)

No new capital allocations to be made in FY21.
No change to financial guidance around FY21.

Expected to pay Final Dividend in FY21 (no interim dividend end of Calendar 2020) - Graeme later went on to say "Hopefully..."

Auckland:
The second lockdown in Auckland cost SKC $20million
Level 8/9 redeveloped, new bar, new food court due to open in Auckland customers will be "suprised and delighted about these developments"
Rebuild of NZICC starting "imminently" - ICC to open 2023
Horizon Hotel open 2021
Hobson St Air-bridge will be installed this month (I think I heard that correctly).
Gaming Business has been very positive
Non-Gaming Business is "very light" during the week but "very strong" during the weekends (read: Food/Accomodation).
Excited about new VIP gaming room "black" which is twice the size of the previous VIP gaming room which will be relevant for the years to come.

Hamilton:
Applications for swapping 3x Blackjack tables for 60x EGM's was turned down.
New Lounge opened which is very positive.

Queenstown:
Really strong recovery since reopening with domestic tourism very strong.

Note: Any Further Developments are currently paused at ZQN/HLZ.

Adelaide:
weeks away from opening (November 2020) - Graeme looked very happy and spoke very positively about the precinct opening up.
"The best integrated resort in Australia". "EOS will be Most Luxurious Hotel in SA". "World-Class". Initially targetting local and inter-state customers. Project will be delivered inline with $330m budget.
I noted some of the pictures of Adelaide are absolutely amazing, they look better than any other hotel that I have stayed in (and I've stayed at a lot over the years).

Online:
Online business well above expectations, it is now a meaningful business for us.
35,000 customers, of which 25,000 are active. Profitable on month by month basis.
Believe in the "relatively near" future, there will be regulations allowing an "online casino" allowed to be hosted in NZ. Have been in discussions with the regulators around this. (remembering this is operated via a Malta based subsidary, even though they are paying Tax in NZ and following all "expected" regulations.)

[MauroNZ]

Thanks for sharing Norwest!.

[tango]

Thanks Norwest.
I completely forgot about the presentation. Your summary is wonderful.

I am bullish about sky city. I think they are well-positioned for the recovery, the online website is a good addition to cash flows with more to come and it seems that SKC can withstand any future adverse events.

[tango]

Here is a summary of the meeting from the Herald

https://www.nzherald.co.nz/business/covid-19-coronavirus-skycity-entertainment-prepared-for-more-lockdowns-no-normality-until-2022/C5MWH4S23ZORRM4TPSCFA762Q4/

[Filthy]

Crown Resorts: Australian casino operator faces laundering probe https://www.bbc.co.uk/news/world-australia-54595050

[Filthy]

would be an interesting opportunity for SKC if Crown lost a licence or two!! more likely a fine though (if proven). Still.... might make it harder at renewal time eh...

[Sir Ten]

https://www.nbr.co.nz/story/skycity-chair-rob-campbell-blames-lazy-proxy-advisors-vote-against-re-election

I think this shows a distinct lack of self-awareness from Rob Campbell... for someone so woke, seems more asleep.

[Norwest]

https://www.nbr.co.nz/story/skycity-chair-rob-campbell-blames-lazy-proxy-advisors-vote-against-re-election

I think this shows a distinct lack of self-awareness from Rob Campbell... for someone so woke, seems more asleep.

Your link is behind a pay wall, can you summarize what it says please?

[Sir Ten]

"SkyCity chair Rob Campbell blames lazy proxy advisers for vote backlash"
- Campbell had 91.3 million shares or 16.76% of the vote directed against his re-election last week
- Votes against were due to proxy adviser recommendations
- Campbell states these proxy advisers don't speak to management and it's just formulaic "box-ticking"
- Proxy advisers claimed he is potentially too stretched across multiple directorships to be effective
- Campbell claims he doesn't play golf or sail boats or do anything else to chew up his time like a lot of other directors
- NZSA voted in favour of his re-appointment despite policy that directors shouldn't have more than 5 directorship

Gist of the comments section (around 15 of them)
- Rob spends too much time on LinkedIn and other social media pontificating
- He is hypocritical taking the wage subsidy given his broader virtue signaling social media posts
- One comment suggesting a blanket rule on number of directorships are rubbish
- Comment that proxy voters are actually quite well informed and Rob just doesn't like the advice

...and it appears Rob himself has replied in the comments:
- If you don't like my posts block them
- I have 29,000 connections
- Comments on the underlying business performance across his directorships are not well informed - albeit THL is suffering due to Covid (i.e. out of his control)

[Sir Ten]

"SkyCity chair Rob Campbell blames lazy proxy advisers for vote backlash"
- Campbell had 91.3 million shares or 16.76% of the vote directed against his re-election last week
- Votes against were due to proxy adviser recommendations
- Campbell states these proxy advisers don't speak to management and it's just formulaic "box-ticking"
- Proxy advisers claimed he is potentially too stretched across multiple directorships to be effective
- Campbell claims he doesn't play golf or sail boats or do anything else to chew up his time like a lot of other directors
- NZSA voted in favour of his re-appointment despite policy that directors shouldn't have more than 5 directorship

Gist of the comments section (around 15 of them)
- Rob spends too much time on LinkedIn and other social media pontificating
- He is hypocritical taking the wage subsidy given his broader virtue signaling social media posts
- One comment suggesting a blanket rule on number of directorships are rubbish
- Comment that proxy voters are actually quite well informed and Rob just doesn't like the advice

...and it appears Rob himself has replied in the comments:
- If you don't like my posts block them
- I have 29,000 connections
- Comments on the underlying business performance across his directorships are not well informed - albeit THL is suffering due to Covid (i.e. out of his control)

... and my own editorial addition, while Mr Campbell doesn't play golf or sail boats to chew up his time - I do agree that he seems to spend an inordinate amount of time on LinkedIn

[hogie]

... and my own editorial addition, while Mr Campbell doesn't play golf or sail boats to chew up his time - I do agree that he seems to spend an inordinate amount of time on LinkedIn

The dangers of putting yourself out there on social media :)

[Sideshow Bob]

https://www.nzx.com/announcements/363264

Plenty of exec changes and a trading update coming.

Not much time between announcement and the CEO leaving....

[Balance]

https://www.nzx.com/announcements/363264

Plenty of exec changes and a trading update coming.

Not much time between announcement and the CEO leaving....

No change to positive trading outlook.

All good.

[sb9]

https://www.nzx.com/announcements/363264

Plenty of exec changes and a trading update coming.

Not much time between announcement and the CEO leaving....

Looks like bit of nice house clean up for sure....

[Norwest]

It sounds like Rob Hamilton is leaving because he was in contention for the CEO role (and wanted it), thus has decided to leave.

Though Graeme is retiring from this role, he will "stay active in the NZ Market" (read: he'll be looking for another job, however he does not have another role to go to).
Graeme had 6 months requirement to leave in his contract, thus with only 2 weeks notice it was a "mutual parting"... he will be paid out all his entitlements under his contractual agreement, no extra inducements paid out.

Michael's priorities (other than to get new exec structure in place)... focus on core business, navigating through Covid, focus on execution in Adelaide as part of the opening and completing NZICC.

Also it sounds like the Michael is going to be getting remunerated less than Graeme was.

[Filthy]

https://www.rnz.co.nz/news/world/430713/seventeen-new-cases-linked-to-adelaide-coronavirus-cluster

[King1212]

That was yesterday news...

I think Skc... retailers..will be okay as people are not spending thier overseas holidays money.

People will spend on hobbies... restaurants....movie... entertainment coming this Christmas

[NZSilver]

SKC has to be one of the best potential recovery stocks once everyone gets vaccinated and borders open. I'm sure there will be a lot of pent up demand with IB. I'm thinking one from now we should be aroung $4-$4.50.

[King1212]

Oz crown is in the deep sheet...facing money laundering. Will see fundies coming to SKC shortly

[Waltzing]

You may not see 3 dollars again any time soon but you never know... Topped up a few months back in the high 2's

[Filthy]

You may not see 3 dollars again any time soon but you never know... Topped up a few months back in the high 2's

under $3 now and down through the 90MA
next stop, $2.80, then $2.40 if that doesn't hold

[Biscuit]

under $3 now and down through the 90MA
next stop, $2.80, then $2.40 if that doesn't hold

I took a bit of profit off the table back in May around $2.40 after buying in the big dip. I'd be surprised if it went back there now though, surely the end of tunnel is in sight?

[Norwest]

under $3 now and down through the 90MA
next stop, $2.80, then $2.40 if that doesn't hold

Can you care to explain why you say $2.80 and $2.40?

I could see it bouncing down to $2.72 temporarily which would be a good buying opportunity but highly doubt it will go back to $2.40

[Filthy]

Can you care to explain why you say $2.80 and $2.40?

just based on TA. $2.80 would need to break first to get to $2.40; so I wouldn't stress too much.

[Waltzing]

possibly responding to the round 3 of virus in europe the world..

3 was probably getting a bit carried away and 3.20 was sale able...

we have this down as the last stock to revalue in the NZX after all others revalue.

we though perhaps the sharie people would prop it up... i appears they are running out of spare cash in summer...

GFC share price .

[tango]

I don't think Sharesies people understand that SKC is building its online income and can do well out of local high rollers in the VIP section. Obviously it's not going to do as well without tourists but it's a well run company

[Filthy]

EPS: 10.4cps: down from 49.3cps - Ouch!
https://www.nzx.com/announcements/367765

[Norwest]

It was interesting listening to Michael deliver for the first time, he was quite nervous in his delivery and potentially out of his depth to a degree, I thought he was quite lucky to have someone else who was much, much more confident sitting with him (It wasn’t Rob, I’m not sure who it was) to interject and save him a few times during questions. Also the call quality was pretty bad which didn’t help.

Questions: Forsyth Barr
Q: Coming back to Adelaide, trying to understand the profile from here.
A: Domestic Trading activity only (obviously), its early days, over the period the consistency has been good with plenty of upside from the hotels.
Q: From the group level, you've been taking costs out, have you put costs back (read: operational).
A: Some costs have come back as activity has recovered, more marketing and more hires to support gaming. We are being pretty cautious, but don't expect to add back all the costs that we've taken out moving forward.
Q: So you'll be able to sustain these cost decreases?
A: Yes we think it’s sustainable, but it’s very difficult to see a clean margin but in reality we are seeing a higher underlying margin in the market.
Q: Re: Hamilton, currently you are hitting it out the park. Interested in how you think of this sustainably?
A: Happy with Hamilton, significant changes made and the product, pricing and outlook is very positive and it’s a sustainable level of earnings this is not just a one off. Once international boarders open up, you will see people in the Waikato wanting to head to Aussie, Overseas etc and this may impact FY22 results.

Questions from Goldman Sachs
Q: Slide 10 can you give us info on performance on Jan-Mid Feb.
A: It's been pretty consistent, it’s a progression over time in performance, getting more confident over time. January very similar to December, it’s been consistent across each category.
Q: Full year guidance has been re-iterated, FY21 above FY20, but below FY19. Is there a degree of conservatism baked into this?
A: We just don't know. Increased lockdowns may have impact on EBITDA. Level 2 operation is half of what Level 1 is. We've been deliberately cautious, last week has shown how this can change so quickly.

Questions from Macquarie
Q: When can you structurally expand margin?
A: If you look at Hamilton it is dominated by EGM, good table performance, margins up significantly. Stronger gaming performance which is our higher margin performance. We're not looking to add costs back in where we don't need to. Auckland is different due to wider array of outlets e.g. food, beverage and hotels are relatively weak. Significant adverse effect on this property, but gaming margins are equivalent if not slightly up. If we are back to normal revenue activity in Auckland, we would expect to see margins slightly up. Re: Adelaide, the growth we are expecting will be higher margin for our business, hopefully we can see that flow in to improvement on our current 15-18% EBIDTA as we further open up.
Q: With IB, do you think NZ will ban "Junket Tours"
A: We haven't had any communications from this around DIA. This has been major focus on NSW obviously. The key thing is border opening. Our business in the international side has been operated much more conservatively than our peers. Look at FY19, 15% of IB turnover was junkets.
Q: Are you getting a benefit because of being ahead of any reform changes?
A: I don't think that’s beneficial even though we are ahead.

Questions from UBS (Marcus was quite frustrating in his line of questioning around the crown casino issues).
Q: On Adelaide, could you give us hard numbers since it’s opened?
A: It's difficult to put numbers here, I wouldn't be comfortable doing that. We're not in a habit of giving out monthly results and we aren't about to start.
Q: Is the right working assumption moving forward, is that you want be involved in junket play?
A: Borders are closed for 12months, so it’s not relevant at this time.
Q: When do you think you'll announce this?
A: There is a review underway, however our reliance on these junkets are a lot smaller as I've reiterated earlier.
Q: The issues crown has run into, would these equally apply to yourselves or could you manage the junket operators in an appropriate way?
A: We don't want to get into the crown casino issues, we've operated our business successfully since inception so these issues don't apply to Skycity.

Questions from Evans & Partners
Q: Can you give us EBITDA figures for Auckland for the December quarter.
A: We don't put out quarterly EBITDA numbers.
Q: Re: your comment of costs coming back into your business, how much headcount did you remove, and how much did you add back?
A: ~900 were made redundant, ~150 have come back, mainly casual and part time. Equivalent additional FTE is around 20. I would say we are not sure about outlook on when the business will recover and we're taking a cautious approach.
Q: What is the long-term guidance on Adelaide
A: $60M EBITDA target
Q: How soon do you expect to get up to 1500 slots at Adelaide, do you need this to hit $60m.
A: We don't need this to hit the target (anytime soon). It's a nice option to have to grow. There is some capacity, there are space in the facility to convert non-gaming to gaming depending on future demand.

Questions from Jarden
Q: Re: Slide 45, would it be normal to think this EBITDA contribution without using jobkeeper?
A: If you take this out, July-Nov was pretty close to PCP during this period, despite the constraints around construction and covid. December was obviously a much better month. Clearly out expectations for Adelaide in our second half will be better.
Q: Would you expect Adelaide to be higher EBITDA in second half?
A: Jobkeeper does impact first half, we don't expect to be below this in second half. No jobkeeper flowing into second half.
Q: Would you expect full year profits to flow into the dividend, or just the second half? e.g. a catchup dividend.
A: It will be half of full year. It won't be a catchup dividend, it will be sustainable consistent with the new policy. Our performance doesn't justify a catchup dividend.

It was also interesting to note that Michael shut down call quite abruptly at the end.

[Waltzing]

over priced at the moment but long term a return to steady increasing profits in 2022-2023.

[Norwest]

EPS: 10.4cps: down from 49.3cps - Ouch!
https://www.nzx.com/announcements/367765

You really need to read into financial report more in depth and compare like for like on PCP.

If you do this, you'll see a $193million differential in there regarding the NZICC fire which skews the figures quite a lot. It's still not a great result but once you take into account the above, plus the closures of our international borders and the continued lock downs, the EPS drop isn't as bad as the headline.

[Waltzing]

the share is still surely a head of its self by about 12 months?

DISC: We Hold .

[Entrep]

Vaccines much more effective than previously thought. Time to start accumulating this one?

[Waltzing]

accum ? we did at 2.96 the other day.

[sb9]

Closed bit strong on ASX at NZ $3.31 equivalent, obviously demand coming from Aus Instos, same deal as in case of FBU too.

[stoploss]

accum ? we did at 2.96 the other day.

Why did you say the share was 12 months ahead of itself then ? Trying to talk it down while you were buying ?

[ratkin]

over priced at the moment but long term a return to steady increasing profits in 2022-2023.

When you said this (Three weeks ago) the price was in the 2.80s yet you now say you have since bought some at 2.96.
Where is the logic for this?

[Waltzing]

Logic? none ! We have missed out on making a lot of money this winter by trying to apply FA to the market. Logic said all high dividend stocks would increase in value. The market did in fact follow this logic much to our surprise. We should have held on to some wonderful NZ stocks but felt the market would roll over again, IT DID NOT.

But other stocks that we thought would be under performers for at least 2 year caught a bid and we have made money of these late reflation trades.

We held sky city in several portfolios all the way through which are under water positions.

As banks have outperformed taking out our loss positions years ahead of our worst case, much to our surprise, we also thought Sky City would attract a bid at under 2.90.

We only bought a small allocation at 2,96 after trading it up from 2,40.

It was a bet that the market MIGHT bet on the stock here.

Sky city is always a trade for us as its a casino stock and we treat it that way until its others business start to perform. NZ will be THE place for people to travel to in the future as it reputation for control virus's will place it at the forefront of safe places to hold a conference and travel the gulf , fly to the south island.

Global pandemic the best advertising the country could ever get.

We also wished we had added to overseas travel last week.

[Entrep]

Bought in this week. Bottom draw along with CEN

[Waltzing]

big move of 2.90 to 3.30 , well the market is buying now for 2023 and beyond. Glad we got some more at 2.94 last week. This stock is always a bit of a coin toss. But a lot of people will want to party soon. Its anyone's guess where this stock goes for the next 12 months.

But we are looking to increase over seas travel stocks that are now firm in profit for us and we dont have enough of them.

[sb9]

The way its going, could well be onto 4 handle very shortly.

[Entrep]

We like the stock

[daveypnz]

Nearing pre covid levels, where the stock had been for years. The upside is surely fairly limited from here? Or does SKC now have a growth runway?

[sb9]

Worst affected negatively due to COVID are travel, tourism, hotel and entertainment sectors. Obviously they're bound to be big beneficiaries when things looking to return to normal in the medium term.

My pick is its got few legs past $4 mark this time around, like most recovery stocks have zoomed past pre-covid levels.

[ratkin]

Nearing pre covid levels, where the stock had been for years. The upside is surely fairly limited from here? Or does SKC now have a growth runway?

Looks like 4.00 about the max, unless you can make a case that they used covid to trim all the fat, and accelerated their online activities. If so they could emerge leaner and meaner.
On the other hand it maybe getting ahead of itself

[Balance]

Looks like 4.00 about the max, unless you can make a case that they used covid to trim all the fat, and accelerated their online activities. If so they could emerge leaner and meaner.
On the other hand it maybe getting ahead of itself

Precisely what SKC & many companies were doing - trimming that fat (as in highly paid staff who could be replaced with cheaper staff), renegotiating supply contracts and streamlining operations.

Meanwhile, the substantial capital spend on ICC and Adelaide lays the platform for the next phase of earnings growth for the company.

[sb9]

Been to Orbit 360 for anniversary night dining with Mrs last week under level 2, super impressed with their protocols and new attractions they've in place like All Black Exp etc.

Not a gambling person, so didn't check out Casino, but from up above looks like ICC coming along nicely.

[Snoopy]

big move of 2.90 to 3.30 , well the market is buying now for 2023 and beyond. Glad we got some more at 2.94 last week. This stock is always a bit of a coin toss. But a lot of people will want to party soon. Its anyone's guess where this stock goes for the next 12 months.

But we are looking to increase over seas travel stocks that are now firm in profit for us and we don't have enough of them.




we picked up SKC... yes i know MR B not a clean stock.


Article on Rob Campbell where he discusses the ethics of managing SKC.

https://businessdesk.co.nz/article/listed-companies/rob-campbell-the-legacy-of-nzs-corporate-socialist

"He’s fully aware about issues plaguing both the corporate world wider society and knows that change is necessary and inevitable."

"The incongruence of chairing a company that profits from gambling, while advocating for social well being is not lost on Campbell, who says “it’s hard to find that balance” at SkyCity. However, he says the company has a constant vigilance about its potential role in causing social harm; reminders about the host responsibility to mitigate problem gambling have been placed throughout the company’s structure; from the board table to the website and every employee’s key cards."

" “How many other businesses have that level of focus on the potential harm that they can cause?” Campbell asks. “How many petrol companies have that level of focus on the climate damage their products are doing, or fast food companies on the health issues they cause?"

" “The answer is, there’s none I’ve ever come across that has anything like the ongoing focus on wider stakeholder issues that SkyCity has.” "

SNOOPY

[NZSilver]

This should move back to pre covid levels, once reopening occurs abd ICC is up and running it will be spitting out a lot of cash, at which point it will be 4.50-5

[Balance]

https://www.smh.com.au/business/companies/crown-resorts-receives-8bn-takeover-bid-from-private-equity-giant-blackstone-20210322-p57csb.html

Takeover offer from Blackstone for Crown Casino for A$8 billion.

Could see some of that institutional money flow into Sky City if the takeover goes ahead.

Or will Blackstone make a tilt at Sky City too?

[Balance]

https://www.smh.com.au/business/companies/crown-resorts-receives-8bn-takeover-bid-from-private-equity-giant-blackstone-20210322-p57csb.html

Takeover offer from Blackstone for Crown Casino for A$8 billion.

Could see some of that institutional money flow into Sky City if the takeover goes ahead.

Or will Blackstone make a tilt at Sky City too?

[mikelee]

This should move back to pre covid levels, once reopening occurs abd ICC is up and running it will be spitting out a lot of cash, at which point it will be 4.50-5

But are you sure high rollers will be coming back in drove? Just look at what happened in Macau. No doubt business will pick up but as online gambling becomes increasing popular Sky's food and restaurant business could take much longer to recover I suspect.

[Waltzing]

thats like saying history doesnt repeat its self. Show us a time in the last 2000 years where human behaviour has changed much.

Does Zealandia today not look like Athens and Sparta and Pompeii.

What did they do in Pompeii, they PARTIED!!!

Imagine your locked up in china what are you going to do with your money. Leave if you can and go somewhere and party. They always find a way to get the money out. Hamilton has never stopped party mode at sky city.

[sb9]

Some solid financial, capital market and investment banking heavy hitters being added to the SKC Board incl SUM outgoing CEO Julian Cook keeping links with Chairman Rob Campbell.

With Crown being acquired recently, wonder if there's somethings up in the air with SKC too coinciding with these new Board appointments...

[Norwest]

Some solid financial, capital market and investment banking heavy hitters being added to the SKC Board incl SUM outgoing CEO Julian Cook keeping links with Chairman Rob Campbell.

With Crown being acquired recently, wonder if there's somethings up in the air with SKC too coinciding with these new Board appointments...

I thought exactly the same thing when I seen who they appointed.

If Crown are split up, Star is an obvious choice for their Sydney Casino given they own the the sole poker machine casino license in Sydney. That leaves Perth and more likely Melbourne as potential acquisitions if SKC was looking.

Unfortunately they don't have the cash on hand to do anything like this without a massive capital raise, thus I view 2 of the 3 appointments as a defensive move against potential vultures (e.g. Blackstone) looking at SKC, with the third appointment being Rob's association with Julian from working together at SUM.

[winner69]

Suppose not dealing with any international ‘junket operators’ makes Sky City less of a sin stock

Wonder how many zillions has been laundered over the years

[Filthy]

Wonder how many zillions has been laundered over the years

that just reminds me of OZARK (on Netflix)...

[MauroNZ]

It seems one Senior Manager has reduced his holding:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKC/371097/344679.pdf

[sb9]

SkyCity tipped to reach 75% of pre-COVID revenue in 2021, outlook upgraded to stablehttps://www.asgam.com/index.php/2021/04/19/skycity-tipped-to-reach-75-of-pre-covid-revenue-in-2021-outlook-upgraded-to-stable/

[mikelee]

too optimistic in my opinion, even with the OZ bubble, I reckon it's gonna be another 2yrs or so, similar to AIA, until the business becomes viable again

[Biscuit]

too optimistic in my opinion, even with the OZ bubble, I reckon it's gonna be another 2yrs or so, similar to AIA, until the business becomes viable again

They are currently not viable? They are making a profit even.

[Waltzing]

MARKET UPDATE AND LODGEMENT OF RETAIL BOND OFFER - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/371427)

[Balance]

MARKET UPDATE AND LODGEMENT OF RETAIL BOND OFFER - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/371427)

Steady as she goes - still on track to pay a dividend this year.

[Waltzing]

"Steady as she goes" :t_up:

[ratkin]

What is an electronic gaming machine? Is it just a posh name for Pokie

[Norwest]

What is an electronic gaming machine? Is it just a posh name for Pokie


All Pokie machines are classified as EGM's, however I am not sure if, for example, the roulette tables with electronic tellers are classified as an "EGM'" or they are classified as a "Table".

[Waltzing]

USA Vegas reporting big increases in customer numbers for april.

[bull....]

sky city adelaide being investigated for serious money laundering

[Rowdy Flat]

sky city adelaide being investigated for serious money laundering

Nope, they're not. At issue is, “potential serious noncompliance” of anti-money laundering laws. This is a procedural / processes failure; Austrac have not tabled any actual incidence of money laundering at Sky Adelaide.

[winner69]

@MarkListerNZ
SkyCity shares down 8.5% in Australian trade today, on the back of a range of companies finding themselves in the spotlight for AML compliance issues. Expect a similar fall when our market reopens for the week tomorrow.

[winner69]

If SKC share price collapses tomorrow could be a good buy

[winner69]

Reported in SMH

Meanwhile New Zealand group SkyCity said AUSTRAC had launched an enforcement investigation into its operations, relating to a potential failure to conduct proper due diligence on high-risk and politically exposed patrons at its Adelaide casino.

[Rowdy Flat]

Down 8.5% on ASX.

https://www.theaustralian.com.au/business/financial-services/austrac-targets-casinos-cryptocurrency-and-money-transfer-businesses/news-story/0dc27ae902ea0f2133ed160e1757c3ca Puts the situation in context

[winner69]

Somebody dumped 1.5 million shares a few minutes ago on ASX

[bull....]

Nope, they're not. At issue is, “potential serious noncompliance” of anti-money laundering laws. This is a procedural / processes failure; Austrac have not tabled any actual incidence of money laundering at Sky Adelaide.

nope this is very serious , all casino's in aus under investigation for crime , money laundering. sky city share price could be savaged if found to be allowing this. covid lows ? place your bets

[winner69]

nope this is very serious , all casino's in aus under investigation for crime , money laundering. sky city share price could be savaged if found to be allowing this. covid lows ? place your bets


Their recent announcement about “permanently ceasing dealing with all junket operators, effective immediately” didnt read that well at the time.

Operating International Business Division under a new operating model ...hmmm

[Beagle]

I have personally witnessed heavy hitters laying down one strap after another after another after another on the main gaming floor at Sky City Auckland and nobody in authority batted an eyelid. A strap is 100, 100 dollar notes. One strap is $10,000. A brick is 40 straps. i.e. a brick is $400,000. I suspect a lot of bricks get "washed" upstairs in the high rollers room which is closed to the general public. My father always used to call these places dens of iniquity. I find it difficult to believe that many straps and bricks of money come from legitimate sources of revenue...

A real "SIN" stock. One to definitely avoid if you value your soul, in my opinion. Where there's smoke there's usually fire and in SKC's case that's been more than just a metaphor, Karma ?

[bull....]

Two South Australian MPs have called for a royal commission into the operations of the Adelaide casino

https://www.abc.net.au/news/2021-06-07/call-for-royal-commission-into-adelaide-casino/100195002

[winner69]

Two South Australian MPs have called for a royal commission into the operations of the Adelaide casino

https://www.abc.net.au/news/2021-06-07/call-for-royal-commission-into-adelaide-casino/100195002


SKC announcement a month or so ago was pretty close to an admission that things were not all well

New management will blame old management

[winner69]

common practice across the sector? How to reduce the gambling tax.

https://www.northweststar.com.au/story/7286724/crown-could-owe-vic-167m-in-pokie-taxes/

[Ggcc]

Two South Australian MPs have called for a royal commission into the operations of the Adelaide casino

https://www.abc.net.au/news/2021-06-07/call-for-royal-commission-into-adelaide-casino/100195002

I find it funny and don’t know whether to
Take that seriously.

SkyCity takes its anti-money laundering responsibilities and obligations very seriously. SkyCity has processes and practices in place in its business to detect and prevent money laundering and continually reviews these to ensure it meets all anti-money laundering requirements.

How many people truly believe that is what happens

[winner69]

I find it funny and don’t know whether to
Take that seriously.

SkyCity takes its anti-money laundering responsibilities and obligations very seriously. SkyCity has processes and practices in place in its business to detect and prevent money laundering and continually reviews these to ensure it meets all anti-money laundering requirements.

How many people truly believe that is what happens

but apparently spooked a month or so when they announced they were “permanently ceasing dealing with all junket operators, effective immediately”

[bull....]

I have personally witnessed heavy hitters laying down one strap after another after another after another on the main gaming floor at Sky City Auckland and nobody in authority batted an eyelid. A strap is 100, 100 dollar notes. One strap is $10,000. A brick is 40 straps. i.e. a brick is $400,000. I suspect a lot of bricks get "washed" upstairs in the high rollers room which is closed to the general public. My father always used to call these places dens of iniquity. I find it difficult to believe that many straps and bricks of money come from legitimate sources of revenue...

A real "SIN" stock. One to definitely avoid if you value your soul, in my opinion. Where there's smoke there's usually fire and in SKC's case that's been more than just a metaphor, Karma ?

i spent a little time working on the tables at sky city so i could study gambling techniques to incorporate into my trading strategies and i can say from dealing in the vip room that the money crossed in there is unbelievable 40k on a blackjack hand not uncommon.
when i was there also once was offered by a punter a large amount of money in the carpark after work if i cut the deck more favourable for him. of course the machines now make that not an option now.

[Ggcc]

but apparently spooked a month or so when they announced they were “permanently ceasing dealing with all junket ope rators, effective immediately”
An acquaintance/not a friend who is a high roller at Auckland. He has apparently chosen to ban himself for 6 months…….. He always boasted to friends about how much cash he was taking from jobs he did and taking that cash to Auckland to gamble. He is in something like the black club which means he spends a huge amount per year. The ban does sound like a skycity ban rather than by his choice, but will it be permanent?

[Rawz]

Humans have been gambling ever since someone decided to stick their hand in a beehive.
Ancient Greek's or Roman's would gamble their wages.

Gambling will never go away. It is in our DNA. Without someone taking a risk who would go to outer space or to the depths of the ocean.

Unfortunately there is the bad side where people gamble their life down the drain.

Wouldnt want to be a SKC holder right now.

[Waltzing]

In industries like this one and sports betting, horse racing ect there is always going to be problems.

Do you try to ban all forms of betting?

I imagine the money will return to the horse tracks at a gallop.

well over 1 billion profit in drug trade within just one group in AUS at present and that money will turn up in SKY and other punting operations.

drug dealers look like they are now in the DOCK... oh dear

market update soon on trading...

we never did sell those positions in time....

[mikelee]

watched a video about online gambling in Philippine, it's down right scary how crime ridden the industry is over there, but it's so profitable to the underworld that even China's call to shut it down was "politely" refused by the gov't there

[Beagle]

SKC not the only one at risk of losing their license. Crown under investigation in Melbourne for some very dodgy practices. WOW - fascinating insight into the world of high roller betting.
https://thewest.com.au/business/crown-let-man-with-100k-debt-keep-playing-c-3047757?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+9 +June+2021

[Rawz]

I wonder how much of a dent income will take given all that dodgy high roller money will disappear

[dibble]

Meanwhile the PNG "regulator" has just approved their first casino. You have to feel a bit sorry for a people who've not had a very good time the last few decades to now deal with a casino under weak government.

[winner69]

I wonder how much of a dent income will take given all that dodgy high roller money will disappear

FY20

IB turnover down 59% to $5.8 billion (covid)

Win rate 1.47%

[Rawz]

FY20

IB turnover down 59% to $5.8 billion (covid)

Win rate 1.47%

Thanks W69. Thinking more about it the crims will find a way..

Might just change from 1 kingpin gambling $1m to 10 foot soldiers gambling $100k..

[bull....]

Hamilton City Council wants SkyCity Hamilton to do what other gambling venues around the country are doing, and contribute 40 per cent of the proceeds from its pokie machines to the community.

https://www.stuff.co.nz/waikato-times/news/125383967/councils-hard-line-on-casino-you-need-to-do-much-more-for-your-community

[Balance]

Not as big a deal as some would like the probe to be :

https://www.nzherald.co.nz/business/skycity-entertainment-group-adelaide-probed-vip-income-at-centre-of-allegations-only-1-of-group-earnings-analyst/RC4SMOUHEBFQFXZPNS3V65KMBQ/

Adelaide is the sole focus of the probe into SkyCity Entertainment Group, and VIP earnings understood to be at the centre of investigations only account for 1 per cent of group earnings, an investment analyst said today.

Andrew Kelleher, a director of JMI Wealth in Auckland, told today's Mike Hosking Breakfast on Newstalk ZB that allegations were also historic, dating back to the last decade.

[sb9]

Not as big a deal as some would like the probe to be :

https://www.nzherald.co.nz/business/skycity-entertainment-group-adelaide-probed-vip-income-at-centre-of-allegations-only-1-of-group-earnings-analyst/RC4SMOUHEBFQFXZPNS3V65KMBQ/

Adelaide is the sole focus of the probe into SkyCity Entertainment Group, and VIP earnings understood to be at the centre of investigations only account for 1 per cent of group earnings, an investment analyst said today.

Andrew Kelleher, a director of JMI Wealth in Auckland, told today's Mike Hosking Breakfast on Newstalk ZB that allegations were also historic, dating back to the last decade.

May get a slap on the wrist with some token penalty. Nothing much more than that imo.

[Balance]

May get a slap on the wrist with some token penalty. Nothing much more than that imo.

Be more than a slap on the wrist I suspect as the Australians play rough with NZ companies.

Could be a big fine but not cancellation of casino license or anything like that as some have speculated.

$160m getting wiped from market cap yesterday was an over-reaction imo.

[winner69]

Needed something to get things back on track

Guidance update ...and we will pay a divie

https://www.nzx.com/announcements/373722

[Balance]

Profit upgrade & Dividends to resume in September 2021.

https://www.nzx.com/announcements/373722

SkyCity Entertainment Group Limited (SkyCity) advises that, following stronger than expected recent trading, it is now in a position to provide detailed guidance for the financial period.

SkyCity has continued to see strong performance from its local gaming businesses in New Zealand, particularly from electronic gaming machines, and consistent performances from both SkyCity Adelaide post opening of the expansion from December 2020 and the offshore online casino (SkyCity Malta).

SkyCity’s tourism-related businesses in New Zealand and South Australia continue to be impacted by ongoing international border closures (excluding the Trans-Tasman border which re-opened on 19 April 2021), but are benefitting from positive domestic tourism, particularly on weekend and holiday peaks.

Subject to no property closures prior to 30 June 2021, SkyCity expects FY21 Group normalised EBITDA of between $247-253 million and FY21 Group normalised NPAT of between $84-88 million.

PS. W69 beat me to it by 1 minute so a repeat of his post. :t_up:

[Entrep]

Damn, meant to top up yesterday

[mikelee]

it could shoot up again once tourist starts returning in drove from next year onward **fingers crossed**

[Entrep]

Thought I had a very nice entry but now marginally underwater. Looking very weak with Oz closures and everyone realising that international travel is not returning to anything like normal for 2+ more years.

[Entrep]

Still no sign of buyers. Would be interested in input from others.

[Snoopy]

Thought I had a very nice entry but now marginally underwater. Looking very weak with Oz closures and everyone realising that international travel is not returning to anything like normal for 2+ more years.


I think the positive side of SKC is that they still have the legislated monopoly of having casino licenses in Auckland and Adelaide. Proximity to the soon to be completed 'Tasman Conference Centre' (it is probably too optimistic to call it the 'International Conference Centre', post Covid-19) will provide a solid customer base for their Auckland hotels going forwards. It is thought of as a tourism share, and for sure tourists provide the cream. But although we can say goodbye to the 'high rollers' from Asia, most of the SKC business is still domestic (that applies to the Adelaide casino as well). It wouldn't surprise me to see more domestic custom from NZers who cannot travel.

I would suggest the business has been permanently affected by Covid-19, but the market price has come down accordingly. Don't forget the cash issue will reduce earnings per share going forwards as well. Dividend restoration has been promised and that should underpin the share price from here.

SNOOPY

discl: long term holder, and happy to continue on today's forward outlook.

[Entrep]

I think the positive side of SKC is that they still have the legislated monopoly of having casino licenses in Auckland and Adelaide. Proximity to the soon to be completed 'Tasman Conference Centre' (it is probably too optimistic to call it the 'International Conference Centre', post Covid-19) will provide a solid customer base for their Auckland hotels going forwards. It is thought of as a tourism share, and for sure tourists provide the cream. But although we can say goodbye to the 'high rollers' from Asia, most of the SKC business is still domestic (that applies to the Adelaide casino as well). It wouldn't surprise me to see more domestic custom from NZers who cannot travel.

I would suggest the business has been permanently affected by Covid-19, but the market price has come down accordingly. Don't forget the cash issue will reduce earnings per share going forwards as well. Dividend restoration has been promised and that should underpin the share price from here.

SNOOPY

discl: long term holder, and happy to continue on today's forward outlook.

Appreciate your comments as always. Great long term hold I agree. Might need to break my rules and average down.

[Waltzing]

SKC is a 10 year hold from here. Think GFC style recovery which although brought forward deficit spending had bridged the gap for many sectors this sector is damaged as far as IBS.

However imagine the CCP locks down china society where are they going to party....

Imagine the pent up demand in 5 to 6 years for gambling and parties...

Now those with accounting back grounds are not disposed to gambling but double entry doesnt seem to be big in china.

[Balance]

https://www.nzx.com/announcements/377917

Results better than market expectations.

Resumption of dividend so back as a yield stock .

[Entrep]

Broke my average down rule on this but seems to have paid off

[101nick101]

Sold out after I learnt the girl I was formerly snuggling with was responsible for hiring decisions at Sky City.

[mikelee]

I wonder if SKC can really afford to pay a dividend, especially with AKL in lock down for a month at least. Perhaps online gambling is doing extremely well? Still, I doubt that gambling alone can offset heavy loss from its hospitality wing.

[Norwest]

I wonder if SKC can really afford to pay a dividend, especially with AKL in lock down for a month at least. Perhaps online gambling is doing extremely well? Still, I doubt that gambling alone can offset heavy loss from its hospitality wing.

Of course they can, dividend is approximately 33% of last year's EPS.

[Norwest]

Money in the bank today, great to have SKC back to paying out dividends again.

[sb9]

Money in the bank today, great to have SKC back to paying out dividends again.

Yes, nice to see resumption of dividends and long it may continue.

[Waltzing]

Surprised this hasnt taken a beating. Back at 3 soon?

[Rawz]

SKC a good covid recovery stock. Along with EVO.

[Waltzing]

With Auckland turning into a leaky managed isolation city a few more big cluster outbreaks and a lower 3 handle is likely.

a lot of business in retail and hospo will be bobbing about water logged.

Auckland needed to do a Dubrovnik.

[Waltzing]

No, going the wrong way. Its going up....

[Norwest]

Rob Campbell stepping down as Chairman and Director of SKC in "early 2022".

I think Rob is a fantastic Director and it will be sad to see him depart from SKC. Let's hope they get an equally good replacement.

[mayday]

I was wondering why SKC's sp fell sharply on opening today. I thought it had something to do with the annoucement of Chairman's retirement.....but

Star Entertainment: Shares fall on money laundering claim - BBC News (https://www.bbc.com/news/business-58866576)

[winner69]

I was wondering why SKC's sp fell sharply on opening today. I thought it had something to do with the annoucement of Chairman's retirement.....but

Star Entertainment: Shares fall on money laundering claim - BBC News (https://www.bbc.com/news/business-58866576)

Sky City owned up that their processes dealing with the high rollers weren’t up to scratch

Casino operators squeaky clean …..rather paradoxical

[stoploss]

How about this one.....Surely someone at WINZ was paid off to sign this off for so long ?
https://www.nzherald.co.nz/nz/drug-boss-spent-15m-at-casino/BHHI462QAXANQ3SSBK5KTPH6NM/

[Balance]

Some positive news for the casino sector - news that Crown Resorts would not lose its casino licence, despite damning Royal Commission findings, saw its shares rise 8.7 per cent to a three-month high of $10.50. Star Entertainment, which is also facing compliance scrutiny, gained 4.3 per cent to $3.61.

[Waltzing]

the EVIL city is creeping up... thank goodness... but without all those china boys and girls with the big money will it ever see > 4 every again?

[mikelee]

borders opening up next year, fingers crossed, should at least boost SKC's hospitality business though

[Waltzing]

once those Chiina boys and girls are sick and tired of being locked in china they will be moving in with the cousin in AUS and here and bring a lot of Piz Card money with them.. Also money diverted Via Hong Kong and Singapore markets... took a long time for SKC to recover from GFC and this isnt much different.

we picked up some more at 2.96 recently in one of the portfolios... Not any different to betting on horses which is just as addictive..

Los Vegas Sands is also cheap at the moment.

The other market is Europe with a few US investment houses moving out of China investments into Europe instead as more property companies cant pay there bonds.

The Chinese wont ever back the bonds and just expect more stupid people to invest in the ever bankrupt China property market.

There she blows 3.10!!!

Jim O Neil saying on CNBC last night that the china market is heading into lower and lower interest rates to try and prop up the markets.

[Waltzing]

UP UP and AWAY!!! going over 3.13...

[Entrep]

That strength was short lived

[Waltzing]

Expecting more weakness later this summer if what is happening in the UK hits here...hoping this stock gets into the high 2's at some point.

The country is voluntarily starting to stay away from hospitality as Xmas approaches..

Some commentators in the UK sounding the alarm for business..

And Boris is under notice...

https://www.bbc.com/news/uk-politics-59699135

[Waltzing]

In the 2's

[Waltzing]

SIN CITY looking a buy here and maybe with the big sick even better prices....

But if the country is triple boosted this might be it... slow accumulate more.

could be a bargain shortly AGAIN!!!

4 years time a cash machine...SIN CITY!!!

Aucklands got nothing on those 1920's roaring party cities...

https://www.youtube.com/watch?v=7heXZPl2hik

[Biscuit]

SIN CITY looking a buy here and maybe with the big sick even better prices....

But if the country is triple boosted this might be it... slow accumulate more.

could be a bargain shortly AGAIN!!!

4 years time a cash machine...SIN CITY!!!

Aucklands got nothing on those 1920's roaring party cities...

https://www.youtube.com/watch?v=7heXZPl2hik

I picked up a few more, but I wonder if it hasn't got further to fall as the game with omicron has a long way to play out IMO.

[Sideshow Bob]

INTERIM RESULT FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/387205)

SkyCity Entertainment Group Limited 2022 Interim Result
Summary of six months to 31/12/21

Reported: Net Profit After Tax: -$33.7m (-$111.6m) -143.3%
Normalised: Net Profit After Tax: -$19.5m (-$62.7m) -145.3%

Name of Listed Issuer: SkyCity Entertainment Group Limited
CONSOLIDATED OPERATING STATEMENT
Current Interim Period NZ$: Up/Down %: Previous Corresponding Period NZ$

REPORTED REVENUE (excl GST) FROM CONTINUING OPERATIONS
$289.8m: down 35.6%: $449.9m

TOTAL REPORTED REVENUE (excl GST)
$289.8m: down 35.6%: $449.9m

REPORTED NET PROFIT FROM CONTINUING OPERATIONS
-$33.7m: down 143.3%: $77.9m

TOTAL REPORTED NET PROFIT
-$33.7m: down 143.3%: $77.9m

EARNINGS PER SHARE (REPORTED)
-4.5cps: down from 10.3cps

NORMALISED REVENUE (incl GST)
$260.8m: down 32.6%: $386.9m

NORMALISED NET PROFIT
-$19.5m: down 145.3%: $43.2m

EARNINGS PER SHARE (NORMALISED)
-2.6cps: down from 5.7cps

INTERIM DISTRIBUTION
There will be no interim FY22 dividend paid

[Waltzing]

as expected.

[winner69]

as expected.

A casino losing money - that's funny

[alokdhir]

A casino losing money - that's funny

Casino needs people to make money ...they didn't have but now onwards they will always have ...so they will make big money ahead ...reason why its brokers pick

[Waltzing]

It was all forecast back here...

love it when companies lose money for a while...opportunities.. but it throws the stats off and that poses a math problem with event smoothing... sometimes you have to get the Quants in..

Lockdown hit: SkyCity Entertainment Group profits forecast to sink into loss - NZ Herald (https://www.nzherald.co.nz/business/lockdown-hit-skycity-entertainment-group-profits-forecast-to-sink-into-loss/FJDHE3KXPRNA7NCGU4ZR2WZP2Q/)

some buying oppo's coming up...

[winner69]

Good that the dens of iniquity can now operate with hardly any restrictions

Shareholders should be happy

Talking of gambling might see a $4 share price soon

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKC/390586/368793.pdf

nothing like taking the weekly benefit money down to the casino and hoping you can win enough to overcome the cost of living crisis

[Waltzing]

SIN CITY is still operating without the international business gambler from China unless they flee MOA's china.

3 dollars is still good value .

suppose the Racing public will gamble it up though.

Vegas is packed apparently according to CNBC. Winners fav channel to not whatch.

No actual numbers given.

"The Group has remained EBITDA and cashflow positive over the period, even
during periods of peak disruption in February and early March 2022."

[Waltzing]

Winner() this is probably the most undervalued stock on the exchange.

Its a Bargain!!!

[Rawz]

Winner() this is probably the most undervalued stock on the exchange.

Its a Bargain!!!

The trend doesnt look too good thou. Might just wait to see a bottom formed here.

[Rawz]

Hey Waltz if you go to the kitchen and get some baking paper, roll it out on your granite bench top, grab a red crayola and chart SKC out its actually in a 5 year downtrend???

[Waltzing]

Think we posted the web link to the first charts created by a scot. Very nice charts they were.

Pastels.

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

you can read about them here.

a broker once said, "stocks go up and stock go down".

there will be an up out there again but not yet. Expect it to take longer than some expect for 4 dollars to be reached again.

GFC took 5 years to wash over and dont see why this time should be any different since inflation has acted as poring petrol on the fire.

[Waltzing]

if SIN CITY gets down to 2.60 it will be a much better Bargain than WHS.

[Rawz]

if SIN CITY gets down to 2.60 it will be a much better Bargain than WHS.

That would be a new 52 week low.

Who is going to try catch this falling knife?

[Waltzing]

AUS tourism stocks have bounced back in the last 2 months and that should flow on at a later date to SKC.

Chances of 2.60 are slim.

Even in the darkest days it has bounced back.

[Waltzing]

market has taken a hit... Sin City bouncing up and down and last week SP UP!

was 2.60's the Bargain!

[7h23]

I can't speak for all venues, but the one I am familiar with has been packed out every weekend since Easter. I think the wealth effect is still strong, at least for now.
Draw your own conclusions on whether people keep gambling throughout a recession though:
https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1202&context=gradconf_hospitality

[Sideshow Bob]

EARNINGS GUIDANCE FOR FY22 RESULT - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/393668)

SkyCity Entertainment Group Limited (SkyCity) advises that, following stronger than expected recent trading and increasing certainty around its full year result, it is now in a position to provide earnings guidance for the financial year ending 30 June 2022.

Following recent relaxation of COVID-19 operating restrictions, SkyCity has seen strong performance from its local gaming businesses, particularly in New Zealand. SkyCity’s non-gaming businesses continue to recover, benefiting from positive domestic tourism, particularly during weekend and holiday periods, and the reopening of international borders.

Subject to there being no material changes to SkyCity’s current operating settings before 30 June 2022, SkyCity expects Group normalised EBITDA(1) of between $135 - 140 million and Group normalised NPAT(1) of between $3.5 - 7 million.

Due to the uncertainty around the potential accounting adjustments required as part of the FY22 result process, SkyCity is unable to provide guidance for reported (statutory) results at this time.

SkyCity intends to release its FY22 result on 25 August 2022.

[winner69]

EARNINGS GUIDANCE FOR FY22 RESULT - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/393668)

SkyCity Entertainment Group Limited (SkyCity) advises that, following stronger than expected recent trading and increasing certainty around its full year result, it is now in a position to provide earnings guidance for the financial year ending 30 June 2022.

Following recent relaxation of COVID-19 operating restrictions, SkyCity has seen strong performance from its local gaming businesses, particularly in New Zealand. SkyCity’s non-gaming businesses continue to recover, benefiting from positive domestic tourism, particularly during weekend and holiday periods, and the reopening of international borders.

Subject to there being no material changes to SkyCity’s current operating settings before 30 June 2022, SkyCity expects Group normalised EBITDA(1) of between $135 - 140 million and Group normalised NPAT(1) of between $3.5 - 7 million.

Due to the uncertainty around the potential accounting adjustments required as part of the FY22 result process, SkyCity is unable to provide guidance for reported (statutory) results at this time.

SkyCity intends to release its FY22 result on 25 August 2022.

Thought I misread that profit figure

So $3.5m this year after reporting $90m last year

At least still profit in sin

[Balance]

EARNINGS GUIDANCE FOR FY22 RESULT - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/393668)

SkyCity Entertainment Group Limited (SkyCity) advises that, following stronger than expected recent trading and increasing certainty around its full year result, it is now in a position to provide earnings guidance for the financial year ending 30 June 2022.

Following recent relaxation of COVID-19 operating restrictions, SkyCity has seen strong performance from its local gaming businesses, particularly in New Zealand. SkyCity’s non-gaming businesses continue to recover, benefiting from positive domestic tourism, particularly during weekend and holiday periods, and the reopening of international borders.

Subject to there being no material changes to SkyCity’s current operating settings before 30 June 2022, SkyCity expects Group normalised EBITDA(1) of between $135 - 140 million and Group normalised NPAT(1) of between $3.5 - 7 million.

Due to the uncertainty around the potential accounting adjustments required as part of the FY22 result process, SkyCity is unable to provide guidance for reported (statutory) results at this time.

SkyCity intends to release its FY22 result on 25 August 2022.

Excellent recovery in 2H :

EBITDA of $101.3m vs 1H of $36.2m

&

NPAT of $24.75m vs 1H loss of $19.5m.

[ratkin]

Not a sky property but was at Chch casino last Saturday night and the place was absolutely heaving,so many in that could not get near the tables.
Fifteen minute wait for cocktails due to the big demand. Not seen it so busy in years

[Waltzing]

SP must have had it priced in? still a pretty good result. onwards from here.

[Rawz]

SP is in a fairly sick downtrend.

Not outrageously cheap either

[Waltzing]

Recovered well from the GFC. Took a few years though and expect the same here. If you look at the chart from 2000 you can see it been a great stock to trade. Range 2.50 to 4 dollars.

[Waltzing]

and SKC holds steady as the market stumbles at the water jump... probably run out of legs in the back straight as the lactic comes on from the Aussie starting later in the day.

[Waltzing]

well GNE might have had a not very exciting day and the WHS did nothing much but for some unexplained reason this stock has recovered far to fast for its own good. Only that in 2 or 3 years it will be back to 4 dollars....

what happened to sub 2.60 and a bargain... the SHAZ decided along with AIR that it was already a big BUY... but hopefully some really terrible economic news will come along this winter like minus GDP.

Complete with rolling blacks out in july and august and panic finally sets in when the entire hospital system collapses and staff leaves for AUS and the last nurse turns the lights out....

[Balance]

well GNE might have had a not very exciting day and the WHS did nothing much but for some unexplained reason this stock has recovered far to fast for its own good. Only that in 2 or 3 years it will be back to 4 dollars....

what happened to sub 2.60 and a bargain... the SHAZ decided along with AIR that it was already a big BUY... but hopefully some really terrible economic news will come along this winter like minus GDP.

Complete with rolling blacks out in july and august and panic finally sets in when the entire hospital system collapses and staff leaves for AUS and the last nurse turns the lights out....

Easy stock to buy whenever it approaches $2.50.

Hospitality, tourism and entertainment are on the up and up.

[Waltzing]

well Balance it never got close although you might say 2.64 is close enough and the market today just took off...

wonder if some of the big insto bought back in for the long run. They should have bought tons..

but only small VOL at over 200,000 but AIR was over 4 MIL.

Basically the selling stopped and that was the bounce.

[bull....]

Easy stock to buy whenever it approaches $2.50.

Hospitality, tourism and entertainment are on the up and up.

even in a slowing economy ... no way. i still cant believe this stock like also thl and couple others still trade so high on little earnings.

[Waltzing]

Market expecting a bounce back in earnings in the next 12 months.

and like AIR the SHAZ are looking through the next 2 years and buying now for the long run.

[winner69]

Use of word systemic is a worry

Hope not a case of where’s there smoke there’s fire


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKC/394755/373996.pdf

[Waltzing]

Could be a real bargain coming up here and really these stocks have always been a gambling trade ...

huge range now between about 2.20 to 4 dollars over a decade long cycle.

reminds one of the westpac problem ...

[winner69]

Could be a real bargain coming up here and really these stocks have always been a gambling trade ...

huge range now between about 2.20 to 4 dollars over a decade long cycle.

reminds one of the westpac problem ...

If found they were aiding and abetting the ol dirty money trick what’ll happen to share price?

[Waltzing]

well crown has recovered.

[Ggcc]

If found they were aiding and abetting the ol dirty money trick what’ll happen to share price?
Most likely 20-25% knocked off the share price in the short term at a guess

[Waltzing]

will be a bargain..

[bull....]

as expected a loss. maybe one day there be back in profit to past levels.

[NZSilver]

Actually looking quite positive I thought, recent trading months excluding IB have been strong. I'm happy to hold this one, it will recover. You couldn't really get a worse headwind for a business like this; massive fire, the covid borders shut and lockdowns.

[Balance]

Actually looking quite positive I thought, recent trading months excluding IB have been strong. I'm happy to hold this one, it will recover. You couldn't really get a worse headwind for a business like this; massive fire, the covid borders shut and lockdowns.

Page 26 of Presentation (Outlook) - all divisions operating very well since 1 July 2022. Revenues back to pre-covid levels.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKC/397587/377488.pdf

Potential for corporate activity with Adelaide Casino potentially being sized up by a player like Blackrock?

[Waltzing]

yes 260 was a bargain... and was hoping for more of the same... NOPE they dont know what the R word means in Auckland and Hamilton...

[winner69]

Update

Things are very complicated and our accounting is even more complicated than we thought but it looks like we have OK in Q1

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKC/401309/382096.pdf

[Waltzing]

we are off to the races ... well out of the gates anyway on a muddy track... place your bets...

[NZSilver]

Yeah hopefully we build from here, it's been a long few years.... Their properties and licences are good assets, only reason I have held. Now we need to generate some income. When is the convention center ready?

[Waltzing]

" it's been a long few years'

could be another 12 months or more before it break back above 3.50.

bargain here right now....

[ratkin]

Such a shame about the Adelaide uncertainty. Otherwise would have been adding to holdings. Brave to top up before Feb


“As a result, an investigation will be undertaken by the Honourable Brian Martin AO QC to ensure that the way that SkyCity operates demonstrates that the licensee is still suitable to hold the casino licence in South Australia.”


Mr Martin is due to report back to the Liquor and Gambling Commissioner by 1 February next year

[winner69]

Sin City not playing by the rules

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKC/403668/385153.pdf

Wouldn’t be lax in other places would they

[Rawz]

SP will take a hit today

[bull....]

yep star was fined 100m for same thing

[Balance]

It was coming and it has arrived.

Good stuff!

Hope sp tanks today. :t_up:

[Balance]

SP will take a hit today

Here’s hoping for a 10%+ hit!

Waiting with baited breath, I am!!!!

[Rawz]

Here’s hoping for a 10%+ hit!

Waiting with baited breath, I am!!!!

Only down 3% odd. must have been baked in?

[Balance]

Only down 3% odd. must have been baked in?

Wait for ASX to open.

I am hoping for $2.45.

[Dassets]

Surely the fine will be all the profit gained plus a penalty. Crown made $1.1bil from its breaches. Analysts have pegged the fine for Adelaide at $50m but that seems way light. Given the debt covenant breaches and waiver forbids new debt issuance SKC is in a pickle. I am going to stab in the dark at a fine NZD$250m, Westpac got a A$1.1B fine. A $250m fine is 12% of market cap, $50m priced in so another 7% to fall.

Really SKC should detail how many breach events(up to A$22m fine per breach) and of what nature and profit gained. Otherwise the market is blind and has to throw the dart like I have.

[Balance]

Surely the fine will be all the profit gained plus a penalty. Crown made $1.1bil from its breaches. Analysts have pegged the fine for Adelaide at $50m but that seems way light. Given the debt covenant breaches and waiver forbids new debt issuance SKC is in a pickle. I am going to stab in the dark at a fine NZD$250m, Westpac got a A$1.1B fine. A $250m fine is 12% of market cap, $50m priced in so another 7% to fall.

Really SKC should detail how many breach events(up to A$22m fine per breach) and of what nature and profit gained. Otherwise the market is blind and has to throw the dart like I have.

Let the market guess - the worse the better.

SKC cannot comment any further as stated as matters are now in proceedings.

$2.45, here we come!!!!

[winner69]

Wait for ASX to open.

I am hoping for $2.45.

Sin City at $2.20 could tempt to pretend they not that sinful

[Rawz]

whats wrong with gambling? for the majority its fine.

wouldnt want the minority to kill it for the rest of us. well guess thats how the world works

[winner69]

whats wrong with gambling? for the majority its fine.

wouldnt want the minority to kill it for the rest of us. well guess thats how the world works

Perceived degrees of sinfulness I guess

I gamble (responsibly) with the TAB ....and I gamble on the stock market ...and on the odd occasion buy a Lotto ticket and hope to win Powerball

Might need to asked forrgiveness for being so sinful

[Ggcc]

Perceived degrees of sinfulness I guess

I gamble (responsibly) with the TAB ....and I gamble on the stock market ...and on the odd occasion buy a Lotto ticket and hope to win Powerball

Might need to asked forrgiveness for being so sinful
I’m happy with Skycity. I’m not invested, but I walked away with over $3000 in winnings last time I was there. Very lucky I know and there were so many people losing that night.

[Rawz]

Perceived degrees of sinfulness I guess

I gamble (responsibly) with the TAB ....and I gamble on the stock market ...and on the odd occasion buy a Lotto ticket and hope to win Powerball

Might need to asked forrgiveness for being so sinful

I forgive you Winner69

[Rawz]

lots of punters buying SKC. Might even finish up for the day!

[Balance]

Down a miserable 3c.

What the hell is wrong with the market?

Does the market not know bad news and has it forgotten to panic?

Damn!

[Dassets]

Here is a prediction.

The stock is cum equity raise of circa $400m. With that done the debt guys will throw in more debt if required for the fine.

[Waltzing]

Depends on how good a legal team they can assemble.

They will need to fight this one with everything they can muster.

Even if they a bare faced about it and guilty they will have to say anything that sticks... look it was a rain soaked day everyday and how do they know where paper comes from... anything really...

after all they dont have a tracing scanner for every bit of paper that is OTC...

the market might give some OPPO's going forward though.

Certainly going to mean this one wont recover anything soon after the Buggy bug bug ...

[Marilyn Munroe]

This article explains hoe SKC Adelaide got into trouble.

The amounts of cash some individuals are said to have presented to the casino beggar belief. The sheer volume of cash should have set alarm bells clanging in the compliance office.

https://www.abc.net.au/news/2022-12-07/skycity-adelaide-casino-allegations-detailed-in-court-documents/101745798

Boop boop de do
Marilyn

Top tip: The more you gamble the more the arithmetic grinds you into dust.

[ratkin]

This article explains hoe SKC Adelaide got into trouble.

The amounts of cash some individuals are said to have presented to the casino beggar belief. The sheer volume of cash should have set alarm bells clanging in the compliance office.

https://www.abc.net.au/news/2022-12-07/skycity-adelaide-casino-allegations-detailed-in-court-documents/101745798

Boop boop de do
Marilyn

Top tip: The more you gamble the more the arithmetic grinds you into dust.


"On several occasions Customer 30's known associates had presented cash that was soiled with a strong aroma of dirt“

Surely the above has to be pure conjecture.

[Rawz]

This article explains hoe SKC Adelaide got into trouble.

The amounts of cash some individuals are said to have presented to the casino beggar belief. The sheer volume of cash should have set alarm bells clanging in the compliance office.

https://www.abc.net.au/news/2022-12-07/skycity-adelaide-casino-allegations-detailed-in-court-documents/101745798

Boop boop de do
Marilyn

Top tip: The more you gamble the more the arithmetic grinds you into dust.

wow up to a $2b fine????? SKC completely un-investable for me at this stage

[Balance]

wow up to a $2b fine????? SKC completely un-investable for me at this stage

Think the sp will crash to $2.45?

More doom articles required.

[moimoi]

Will the usual Class Action appear shortly...?

[bull....]

new tax on casino's in NSW proposed ... might spread to other regions ?

[Rawz]

new tax on casino's in NSW proposed ... might spread to other regions ?

You propose that a proposal for a new tax will spread? lol

[Sideshow Bob]

https://www.nzx.com/announcements/406680

Reported: Net Profit After Tax: $22.8m ($56.6m) 167.8%
Normalised: Net Profit After Tax: $73.1m ($92.7m) 474.3%

[bull....]

wonder how skc adelaide going after reading star announcement yesterday

The Group is experiencing a significant and rapid deterioration in operating conditions, particularly atThe Star Sydney and The Star Gold Coast.This has largely been driven by the compounding impact of regulatory operating restrictions andexclusions, and by an emerging weakness in consumer discretionary spending behaviour
To put the operating environment into perspective, the Group’s current earnings performance is atunprecedented low levels

http://research.iress.com.au/IDS/old/20230419/02655859.pdf?uid=EC4D6410CC62007447AD90D48B37149CC D1C0000F8DB1423AEFDE540093D250091850000&ppv=

[dubya]

Jeez....death by a thousand cuts!! 224 as I type.
I wonder if the fine to be imposed by AUSTRAC is about to be announced?
If anything like the Star Entertainment Group fine ($AU100m) could be no divie for the next 12-18 months? Last dividend here was $NZ45 million.
Don't hold, but want to get back in at some stage.

[X-men]

Max fine A$60

The verdict soon ...rekon

[Muse]

aye this is one I'm watching and have done a little bit of work on, but I'm on a total purchase ban until after the debt limit issue is resolved (or not) in America, and otherwise holding more cash than I'd like given the macro environment.

At face value the metrics look good:
* EV/EBITDA: 6.9x, 6.7x, 6.1x, FY23-25 respectively. 5yr pre covid average of 9.5x.
* PE: 16.8, 10.8, 10, FY23-25 respectively. 5yr pre covid ave. of 17.9
* Cash yield: 5.7%, 7%, 8.1% FY23-25 respectively (fully imputed). 5yr pre covid ave. 4.9%.

Consensus estimates for any potential fine seems to hover around the A$45m mark.

The SP before the day of the fine was $2.72 and it closed today at $2.29. That's a 43c diminution in value, multiplied by 760.2m shares outstanding, equating to a market implied fine/impact on operations of $327m, or $279m more than estimates of the fine. Since the announcement of the AU proceedings, Skycity recommenced its dividend programme and announced its 1H FY23 result which beat analyst forecasts at the EBITDA, EPS and DPS level.

In fact at today's price it looks to me if the market has priced in that Skycity has to pay the fine and shut down its Adelaide operations.

SKC has invested tremendous capital which has yet to earn a return on (convention centre, soon Auck carparks), but is expected to start producing in FY25 (and in FY24 for the carparks), and as tourism eventually recovers to pre covid levels

With FY23 largely in the bag (only 8 weeks before start of FY24) and focusing on FY24 and FY25:
* Consensus EBITDA of $337m in FY24 and $365m in FY25
* Adelaide EBITDA consensus of $50m in FY25 and $58.6m in FY25
* Net of Adelaide: $287m and $306m
* Consensus NPAT of $151m and $166m across FY24 and FY25
* Pro rated NPAT net of Adelaide: $128.5m and $139m
* Implies that at todays market cap, and if adelaide was shut down, SKC would still only be trading at 13.5 and 12.5 PE across those years. and if a 75% payout ratio, 5.5% and 6.0% cash yield.
* and of course, adelaide may continue on.

There would be some debt constraints and there is the question of SKC having to fund the purchase of the Auckland carpark which was originally intended to be purchased by Macquarie. That is dragging out and will probably be higher than desirable, but SKC has ample liquidity to purchase. My back of the envelope suggests they could pay the fine, lose adelaide, buy the carparks, and keep net debt to EBITDA below 2.5x. Which should allow dividends to continue, assuming consensus estimates are reasonable.

So what is missing? What is the chart telling us to ask ourselves from a fundamental point of view?
* Casinos are buggered? Crown delisted by Blackstone after Packer went nuts. Nine Entertainment run afoul and so has SKC Adelaide? Loads of incremental compliance costs are already being borne by SKC and included in the YTD results as well as legal fees associated with the Austrac proceedings
* Has revenge tourism peaked? some anecdotal signs out there tourism may be peaking. However Auckland is still running well below pre covid levels and SKC's international business remains well below pre covid. I checked Stats NZ and it appears aggregate visitor numbers are still well down on pre covid.
* Concerns over overheads? labour super expensive and getting more expensive in all jurisdictions
* Recession going to whack revenue? less disposable income, though saw some interesting stats on the impact of the GFC on underlying performance on SKC and casinos more generally
* long term chart not flash?
* Independent director recently resigned?
* Has a lot of Aussie instos who are sick of their AU casino losses and pulling back on the industry, although Allan Gray keeps buying.
* A concern that historic revenues are not repeatable in light of new AML restrictions and oversight?

What else am I missing here? Open, honest question. Because even if SKC had to shutter Adelaide (highly unlikely & undesirable) the investment still looks to me that it could stack up as a long term yield investment, and of course, they may just have to pay the fine and ensure they are hyper vigilant on AML.

I'm less interested in missing out on a few bips of yield of the price rises and this was a good opportunity, than I am in understanding what's on the horizon and what I am missing.

[nztx]

A bit of a wild lights show on Sky Tower tonight:

https://www.nzherald.co.nz/nz/fresh-round-of-torrential-rain-as-thunderstorms-again-hit-auckland/IUK3XYK6CFFO5EORUWEXNYEQJE/

[Balance]

aye this is one I'm watching and have done a little bit of work on, but I'm on a total purchase ban until after the debt limit issue is resolved (or not) in America, and otherwise holding more cash than I'd like given the macro environment.

I'm less interested in missing out on a few bips of yield of the price rises and this was a good opportunity, than I am in understanding what's on the horizon and what I am missing.

Tend to agree with your assessment, FM.

The share register consists principally of overseas and Australian institutions these days and I suspect some of them have simply had enough of the punishment they received from being in the sector - Star Entertainment has been a disaster.

[Muse]

Things like SKC I've perpetually expected online gambling to takeover. Hasn't happened and SKC in fact now have online and see it as a growth opportunity (though in the 1H result it flatlined as punters went back into bricks & mortar). Can't quite shake the fear.

Obviously not ESG (and that's fine by me) and # of instos able to invest in the likes of SKC shrinking. but does create long term slack in the register.

[Balance]

Things like SKC I've perpetually expected online gambling to takeover. Hasn't happened and SKC in fact now have online and see it as a growth opportunity (though in the 1H result it flatlined as punters went back into bricks & mortar). Can't quite shake the fear.

Obviously not ESG (and that's fine by me) and # of instos able to invest in the likes of SKC shrinking. but does create long term slack in the register.

SKC is more than just a gambling stock - it really is a total entertainment package. I suspect that's what the Australian funds bailing out do not appreciate.

[moimoi]

Thanks for sharing your thoughts Moose.

I'd figured the depressed pricing could be partly as a result of less instituitional buying interest due to ESG Mandates.

Allan Gray adding further at these low levels provides confidence as have followed in behind them previously to good effect. They seem to be quite contrarian.

Suspect it potentially has $3 written on it not long after the Austrac fine is known.

[Muse]

Continuing to watch this stock.

SKC coming out of the MSCI Small Cap Index at month end.

Crown trial timetable about to be set and lots of negative publicity about the sector in OZ which Skycity and Star Entertainment invariably get mentioned. Would expect this negative news cycle to flow for a while yet & weigh on sentiment.

https://www.afr.com/companies/games-and-wagering/austrac-s-case-against-crown-resorts-nears-sharp-end-20230510-p5d7eb
https://www.afr.com/companies/games-and-wagering/crown-resorts-braces-for-dirty-money-fine-in-july-20230512-p5d7x6

[X-men]

Red flag on regulations and pending outcome from Skc Adelaide

[Waltzing]

SKY CITY update ....

appoint someone to have a look around the place ... have a few drinks at the bar and come back saying ... boy that game was a cracker. Wow that screen is BIG!!!!

mst be a huge fine coming surely ...

https://www.nzx.com/announcements/412147

cant see any gang bikes in the car park ...standard of dress needs to go up a bit as the punters from china dressed better.

[Balance]

SKY CITY update ....

appoint someone to have a look around the place ... have a few drinks at the bar and come back saying ... boy that game was a cracker. Wow that screen is BIG!!!!

mst be a huge fine coming surely ...

https://www.nzx.com/announcements/412147

cant see any gang bikes in the car park ...standard of dress needs to go up a bit as the punters from china dressed better.














Forbar has increased their projection from $50m to $100m for the fine to be imposed on Sky Adelaide.

Bloody good show as these casinos are too comfortable doing money laundering for crims.

[Waltzing]

should take it out of DIV ... buying oppo ..

could be a steal...

[X-men]

Crown resorts fined $425m.... would see SKC soon down to $2?

[bull....]

Crown resorts fined $425m.... would see SKC soon down to $2?

the size of the crown fine ( third biggest in aus history ) probably surprised many , im thinking the size of the fine skc may get might be bigger than many analyst's had factored into the price hence the stock coming under pressure now

Crown Resorts and AUSTRAC agree to $450 million fine over money laundering breaches
https://www.abc.net.au/news/2023-05-30/crown-fined-450-million-money-laundering-breaches-austrac/102410670

[X-men]

https://www.newsroom.co.nz/crown-fine-paints-expensive-picture-for-skycity?gaa_at=la&gaa_n=AfHvTEvzowlgboul21lYUqRZ9FT-Hr-HTi3Uz8gAN1NiTz3vzP4r2CAGTxPbqKE4LVQ%3D&utm_source=newsshowcase&utm_medium=discover&utm_campaign=CCwqGQgwKhAIACoHCAowsfOxCzC-jskDMJPt0wEwmu7wAQ&utm_content=bullets&gaa_ts=64bb54e4&gaa_sig=KQrz3CBfy-cAaar2yO_oFUoGVzVVcWDyxhlXpD56osFVF8Rfas3iev58gczw GglpQBeujBOfwVPDFzS19F-Tqw%3D%3D

At least A$50m fine

[Waltzing]

SKC could become even cheaper... take a few years to come back from ... but a bargain if it sinks under 2...

[winner69]

https://www.newsroom.co.nz/crown-fine-paints-expensive-picture-for-skycity?gaa_at=la&gaa_n=AfHvTEvzowlgboul21lYUqRZ9FT-Hr-HTi3Uz8gAN1NiTz3vzP4r2CAGTxPbqKE4LVQ%3D&utm_source=newsshowcase&utm_medium=discover&utm_campaign=CCwqGQgwKhAIACoHCAowsfOxCzC-jskDMJPt0wEwmu7wAQ&utm_content=bullets&gaa_ts=64bb54e4&gaa_sig=KQrz3CBfy-cAaar2yO_oFUoGVzVVcWDyxhlXpD56osFVF8Rfas3iev58gczw GglpQBeujBOfwVPDFzS19F-Tqw%3D%3D

At least A$50m fine

You’d have to think that if such things can go on in Adelaide then NZ operations aren’t squeaky clean either……company ‘culture’ and that sort of stuff

Lucky NZ authorities oversight of such matters pretty weak

[Balance]

https://www.newsroom.co.nz/crown-fine-paints-expensive-picture-for-skycity?gaa_at=la&gaa_n=AfHvTEvzowlgboul21lYUqRZ9FT-Hr-HTi3Uz8gAN1NiTz3vzP4r2CAGTxPbqKE4LVQ%3D&utm_source=newsshowcase&utm_medium=discover&utm_campaign=CCwqGQgwKhAIACoHCAowsfOxCzC-jskDMJPt0wEwmu7wAQ&utm_content=bullets&gaa_ts=64bb54e4&gaa_sig=KQrz3CBfy-cAaar2yO_oFUoGVzVVcWDyxhlXpD56osFVF8Rfas3iev58gczw GglpQBeujBOfwVPDFzS19F-Tqw%3D%3D

At least A$50m fine

SKC is an Aotearoa company - the Ozzies will be licking their lips as they work out every which way that they can sting the company for as much as possible.

More like $150m?

Sp to go below $2.00 soon as the investigation & deliberations drag on.

A very good thing to happen imo as the casino industry has been crime-friendly. A clean up is entirely appropriate.

[X-men]

The court date was 17th July... expecting an update next week?

[Sideshow Bob]

https://www.nzx.com/announcements/416274

ACCOUNTING PROVISION IN RELATION TO AUSTRAC CIVIL PENALTY PROCEEDINGS, IMPAIRMENT OF SKYCITY ADELAIDE CASINO LICENCE, FY23 GUIDANCE CONFIRMED

Key Points

• The AUSTRAC civil penalty proceedings may result in SkyCity Adelaide being ordered to pay a penalty. However, AUSTRAC has not detailed the amount of any civil penalty it proposes to seek and those proceedings are at an early stage.

• Pursuant to accounting standard NZ IAS 37 in connection with the preparation of SkyCity's FY23 financial statements, a A$45 million (NZ$49 million) provision has been booked as at 30 June 2023 for a potential AUSTRAC civil penalty and associated legal costs.

• Considerable uncertainty remains regarding the amount of any civil penalty SkyCity Adelaide may be required to pay. Any eventual civil penalty may be significantly higher or lower than the provision. The timing of any civil penalty to be paid by SkyCity Adelaide is also uncertain.

• In addition, pursuant to accounting standard NZ IAS 36, the Adelaide casino licence has been impaired by A$45.6 million (NZ$49.7 million).

• The provision and impairment are non-cash, and do not impact normalised earnings for SkyCity’s FY23 financial statements. SkyCity’s FY23 Group normalised earnings remain in line with the guidance range provided on 24 May 2023 of NZ$300 - $310 million normalised EBITDA.

• SkyCity’s FY23 financial statements remain subject to external audit.

[Leemsip]

Hard to know what to do with this one.

Would be a buyer below $2. Might get a chance soon....

[Waltzing]

yes it could be a great stock to rebalance into later ... real almost destressed assets status soon... cant imagine anything less than a ton fine at the MIN..

there only defence is what? they dont have glue do they about the size of the fine...

sell any share you have to a trust and then bank the gains later...tax free

[X-men]

SP holds up pretty solid considering The $100m impairment news

[Sideshow Bob]

SP holds up pretty solid considering The $100m impairment news

$100m = 13cps. Share price pretty beaten already, down 20% in the last year.

[X-men]

Well say goodbye to the coming dividend

[Muse]

Well say goodbye to the coming dividend

Right.....tell us how you deduced that x-men? Announcement next wednesday.

I'd wager a ~6c final dividend, bringing the full year dividend to 12c (6c interim paid in march).

Then something like 14c in FY24, 16c in FY25, 17-18dps in FY26. Fully imputed.

disc...recently took a position in the low $2.20s.

[X-men]

Supposed to be a ? Mark on my post. $100 m impairment...will definitely impact the NPAT?