i think sky city is a good buy at the moment
Aspect Huntley has a Recommendation and Valuation Price of $3.40
but an unfavorable economic environment in NZ and Australia will impede earnings growth in the medium term.
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i think sky city is a good buy at the moment
Aspect Huntley has a Recommendation and Valuation Price of $3.40
but an unfavorable economic environment in NZ and Australia will impede earnings growth in the medium term.
SKC has been a solid peformer since this post was last visited.
Grown around 10% on some very nice volumes, and on the back of no news (that I'm aware of).. Can charts help us understand if this has peaked or whether it is worth an entry? As most still rate this as undervalued..
Very solid volume last two trading days. Most encouraging , something has sparked some heavy interest
I dont make decisions based on charts , but if you look at a five year chart for this stock you can see that the stock has for the first time during the entire five year period built a solid base between april and july
All the debt related hammerings / hysteria / fear has dissapeared , helped by the capital raising , as was pointed out in yesterdays sunday star times. Once confidence comes back to world markets you would have to say the price must increase otherwise the stock will sooner or later become a target for takeover
Did not expect this - NPAT up on forecast..
The market has reacted to - Up 20 points...
and therein lies the reason for the past 2 days of increase in volume and price.
Cursing my slowness.
This will make the market take notice - if the global recovery cements we could see some great action.
Timed that one well, for a change
Yep, that'll do me for a 1 week trade! Time to take some off the table (so to speak) ;)
Could be a long uptrend , price has lots of ground to make up , sentiment has now changed for this one
Seems to be some contradiction in that post Lego
Looking hard to find a good entry point .... don't 'curse your slowness' again .... NOW is the time ..... won't be sub 300 again .... as you say SKC on 'the radar of many folks' which means increasing prices
promise me .... you have another half hour to put that buy order in before close today
It'll be more expensive next week
Yes legoman , you may feel as if you have missed out but 2.80 to 3.06 isnt a huge climb. Look at the bigger picture , paying 3.00 or 3.10 is hardly going to make much difference in the long term .
If you believe the mood has changed you better jump in because negative sentiment took this one from 5.00 all the way down to 2.30 , no reason why positive sentiment wont take it most of the way back up during the next year or two
Where is the price going to settle down at? Can see it inching its way to at least 3.50 before having a rest
SKC confirm their recovery, announcing NPAT of $115.3m, up 131% on last year's dismal result.
;)
The best way to get insider information is to just go inside. There is nothing secretive about this process. All you need is a pair of respectable shoes, as those Sky City casinos are open to the public.
I recently fulfilled an ambition to inspect Sky City's operation in Darwin. Despite what you may read elsewhere, I think Darwin will be the key to the long term outperformance (or not) of this company.
My visit was brief, an hour and a half on a Wednesday afternoon, but it did give me a first hand insight of what is happening up there.
At the macro level you can forget the 'R' word. There is no recession in the far North of Australia, as evidenced by property prices that are still moving ahead, and those construction cranes reaching up into the downtown skyline. The population of greater Darwin (including Palmerston and Lichfield) is around 120,000 people and is growing at around 2.6% per year. I was a bit worried about Sky City being 'out of town' on the map. However Darwin is a very compact city. 'Downtown' is within walking distance of the casino if you are used to the temperatures.
My first impression of Sky City Darwin is that it is a resort before it is a casino. The bunker like architecture (perhaps a good thing in a hurricane prone zone) is really a base to use the golf course, tennis courts and swimming pool facilities and oh yes the casino that happens to be attached. Sky City Darwin is actually right on the beach, and very attractive Mindil Beach looked too. However, the Northern Territory has these things called salt water crocodiles and also stinger jellyfish which can be lethal. So as attractive as the swimming looks, and as encouraging as the weather is at enticing you to go in, locals just don't swim at this beach, or any beach.
There are several restaurants at Sky City Darwin and there is an amazing Monday/Tuesday/Wednesday lunch deal which lets you each as much as you like from the Buffet restaurant for only $A13. You can then sit overlooking the extensive waterworld of swimming pools while you consume a multi course meal, soft drinks included. After that 'wetting of my appetite' I was disappointed to learn that you had to be a paying hotel guest to take a swimming pool dip. The other type of pool dip was catered for as you could play Keno during lunch if you had to. Perhaps I ate a bit too much or ate the wrong thing, but after I had finished my meal I got a slight tummy upset. It must be said that the casino coveniences, when I had to pay them a quick visit, could have been cleaner. Accommodation wise, I went as far as the hotel foyer. There I saw an impressive line up of tourism award gongs, and the smiles on the faces of the guests did leave me with the impression that it was all genuinely earned.
I had a good walk around the casino area, and was surprised at the number of tables (and pokie machines) being used in the middle of a hot day. Mind you in Darwin every day is hot (the coldest day of the year equates to some 28 degrees C). So perhaps 3pm on a Wednesday afternoon is just the time to be inside?
There had been some refurbishment of the playing area just recently. But without the 'before' experience, it looked like all of the money had been spent bringing the building up to where it should be. I got no 'wow' effect. One thing that was just getting the finishing touches while I was there were the new 'smoking balconies', all ready for when the smoking ban comes in to the Northern Territory. These look like they will work well as they will allow smokers out of the gaming area to not lose the ambience of the Sky City Darwin experience. That means there is interior design flow between the smoking areas and the gaming floor.
Overall then I was pleased with what I saw, while acknowledging that there may be room for improvement in the 'cheap restaurant' food hygiene and toilet cleaning rosters. Anyone else been up to Darwin to have a look? I would be interested to hear how your impressions compare to mine.
SNOOPY
discl: hold SKC
Hi Snoppy. I think you views on Darwin is not logical. SKC Auckland has I guess a population base of around 1.4m, Adelaide about 1m people to draw on. In the whole scheme of things Darwin is and should be considered a supplementory add on to their portfolio.
With Singapore building their casino, Malaysia having one in Genting Highland, the close proximaty of Maccau in Hong Kong doesnt really make Darwin a primary choice destination for junket and high rollers action. Maybe i missed something but Darwin will not be a company maker or breaker imo. On a different tangent it does increase their exposure into the Australian market but are too small to have an impact on the bigger players (meaning the other big casino operators)there.
Logically you are right Nita. The problem with the logical view, as I see it, is that SKC have had ten years to make something of Adelaide. And despite this years profit improvement Adelaide still doesn't generate anywhere near the profit in overall dollar terms for SKC that Darwin does. Futhermore the Adelaide Casino is not really near the centre of town so it is not an impulse destination. Adelaide is not growing as fast as Darwin, so we can't rely on natural population increase to drive profits in Adelaide in the right direction. Attempts to fix Adelaide ran into planning permission delays, the sticking point of a less generous casino license agreement and the cost of capital not being recovered from those improvements that were made.
Quite a different attitude appears prevalent in Darwin. Up there the local council are right behind Sky City and all their development plans. It sounds incredible but I can see the earnings margin in Darwin rising above the earnings margin in Auckland once the world cup fever has died down in three or four years.
Despite its small population base SKC Darwin is the second biggest earner for SKC right now, behind the Auckland casino/hotel site. Short of massive capital expenditure to move and rebuild the entire Adelaide casino to a modern well located purpose built casino venue, I can't see any other SKC asset usurping Darwin's contribution.
Darwin has never been a destination for high roller Asian gamblers on a meaningful scale Nita, despite what SKC wants you to believe. SKC Darwin are doing well servicing the locals and the Australian and New Zealand tourists. If the high rollers don't come down from Asia, then SKC Darwin will continue on its current trajectory, which has been very impressive without the need for any Asian high roller roll up.Quote:
With Singapore building their casino, Malaysia having one in Genting Highland, the close proximaty of Macau in Hong Kong doesnt really make Darwin a primary choice destination for junket and high rollers action. Maybe i missed something but Darwin will not be a company maker or breaker imo.
You see the Australian market differently to how I do Nita. I see Adelaide and Darwin as off the main tourist trail and as separate and isolated monopoly markets. Perhaps Sydney and Melbourne casinos compete but IMO they largely do not compete with the SKC casinos within Australia.Quote:
On a different tangent it does increase their exposure into the Australian market but are too small to have an impact on the bigger players (meaning the other big casino operators)there.
SNOOPY
Snoopy. You missed some of my points but i give you some credit for your comment on Darwin. I personally worked for SKC for 9 years right from the very beginning. Much of it was well planned by Evan Davies and the exiting of Harrahs as the operator.
With regards to expansion, SKC primary (after establishing locally) goal was to tap into the Australian market. Adelaide was their easiest choice. A safrice in terms of ROI but it gave them credabilty to secure Darwin. Other opportunities would have presented themsleves and they did take it up on the highly failed Canbet. They simply didnt not have enough expertise and quickly crumbled when the leading bookie left.
SKC is still an interesting prospect even more so since they have lowered their debt to equity ratio. There will be some of the bigger players looking at a possible aquisition imo whether a few months down the track or a bit longer.
Looks like your inspection of Darwin casino was spot on. Results out today and it the two aussie casinos leading the way in growth terms.
Market seems to like todays result , Overall earnings per share not improved much , but it good steady as she goesw result with nothing bad happening
How well have I done out of SKC? I have been a shareholder since the BIL sell out a long 11 years ago. However the median holding time for my holding is just 4 years and 2 months. In those 4.167 years I have received a total of 54.9cps in dividends. A ‘buy and hold’ investor buying at that time would have paid $4.40 per share. My average purchase price is $2.60. So purchase timing, has been brilliant.
My total return has been (2.60) (i^ 4.1667)= (3.16+0.549), where ‘i’ works out at 1.089. This represents a compounding gain of 8.9% per year.
Over that same time period the NZX50 has declined from 4000 to 3300. That represents a loss of:
4000(f^4.1667)=3300, where ‘f’ works out as 0.955.
This represents a compounding loss of 4.5% per annum. My net gain relative to the NZX50 index is therefore 13.4% per year compounding and after tax.
SNOOP
How did I get this so right? Being in near the beginning, when BIL was selling out, helped: the entry price then was $1.89 equivalent. Selling some shares when I got top heavy at $5.12 helped too. My third ace was buying as many shares as I could in the 2009 capital raising at $2.61. Then buying some more on the market at a similar price, right at the time almost everyone else was advocating selling out. Buy when a corporate is forced to restructure, sell high and buy in some more when everyone else is short of cash at capital raising time. Perhaps there is a lesson here somewhere?
SNOOPY
I should point out that actual dividends declared were much greater than 54.9c over my median owning period. But for a lot of that time the dividend reinvestment plan was operating. So I used those dividends to purchase more shares rather than bank the cash. This is a choice. I cannot bank the cash dividends and use the money to buy shares in the DRP. So I elected to take those dividends as shares which proportionately reduced my cash dividend harvest.
SNOOPY
Glad to hear you've done well, Snoppy. My own small holding of SKC has been a bit of a disaster. Being my first stock purchase (before the GFC) I've watched it's value slowly slip away on account of it's small size (making selling a difficult decision given commission's relative size) and my lack of experience. The SP seems to just be tracking sideways - what's your take on it at present? Worth holding?
Gidday
It's a cash cow/flow situation. I go in every so often to loose a bit on blackjack.It is always full of asian housewives inevitably loosing the formulated amount.
I hope the Gummint have their hands full, dealing to the big sins of lungs & livers etc & leave skc to do what they do best, clipping tickets of mugs.
You didn't take advantage of the 2009 shareholder top up opportunity then, where no matter how many shares you held you sent in some money and they issued you some shares at $2.61? As Charlie Brown would say Arrrrgh!
I am expecting an earnings boost from the World Cup and the Australian operations to keep getting better. Even tracking sideways, you are getting a gross yield of 6.8%. Compare that with what you get at the bank. Looks like a solid hold from where I sit.Quote:
The SP seems to just be tracking sideways - what's your take on it at present? Worth holding?
SNOOPY
I took part in the top-up, which is the only reason my holding isn't depressingly red. I certainly regret not purchasing more at that price. What you say re: dividends rings true, fortunately for me selling isn't really an option anyway.
Great though that is I still fail to understand the attraction of shares like Sky City, and the second post on this thread is me saying so.
Now I first posted about Mainfreight and claimed to be a holder on 11-Aug-2004. On that day the close was $2.00 if you had simply kept those shares then at todays close of $6.57 and calling today six years later (actually less) your annual compound growth for capital gains alone is 22%. Add in the regular dividend as well and it gets better.
Buying shares with a good yield but poor growth prospects is not the best way to make money.
However I will state that I consider that Mainfreight is currently overpriced.
regards
Paper Tiger
Disc: Own MFT; Do not own SKC.
The growth of Mainfreight, as I understand it, is based on growing the size of the business by looking for new business relationships based around Mainfreight's core competancies. SKC is now more about working smarter with existing assets and customers. I would argue there is less implementation risk in the SKC strategy verses the MFT strategy. Perhaps the MFT strategy has been 'better', and your results PT would certainly indicate that. But after 5 or so years of consolidation, I would argue that from here SKC growth prospects for FY2012 look very good indeed. I had thought of the Rugby World Cup as a slightly bigger Lion's tour. But it is going to be 5 to 10 times as big. And I think a large chunk of that windfall tourist growth will go to SKC.
SNOOPY
Sky city a good stock tpo include in a core portfolio of NZ stocks . Low risk , decent dividends and long term growth / takeover prospects
Are holders getting a tad fustrated with this one?
Seems while the rest of the NZX recovered quite nicely post the 2nd dip from the recession, SKC never moved. It's trading in the range it did when things were bad bad this time last year when they were in debt trouble, which has now vanished.
The fundamentals have not changed - they have got a large bid going in auckland, and have stated they are actively looking for growth in Aussie.
Just come off the back of a double digit profit rise, and expecting more to come in FY11, a divy over 8.5%
Time to accumulate on this weakness I think
Patience grasshopper, just keep collecting the diviedends. The sharre price will rise eventually
I don't hold, it's just one I'm watching and waiting to enter some time soon.
I've just been wondering if I'm missing something here, as I would expect this to be in the mid 3.50's or at a similar level to where the other NZX 15 stocks moved back to these past few months.
I think SKC will lose the convention centre bid, and hoping the SP will drop again after this, for my entry.
This has been my strategy with Sky City, although I have been reinvesting those dividends in the DRP, plus I participated in the 2009 mid year capital raising.
Attachment 3080
The investment performance of SKC was quite good up until the global financial crisis took hold, at which point the share price started to deteriorate. I should add that this share price chart shows the 'adjusted' share price to take account of the capital raising. The capital raising was what I call the new 'soft' type where the company doesn't have to issue a prospectus provided they seek no more than a certain amount ($5,000 IIRC) from each shareholder, in this instance at $2.61 per share. It is very hard to model this dilution as different shareholders will benefit in reverse proportion to the size of their before issue shareholding. Some of the medium sized shareholders (like me) will inevitably end up being diluted by such a scheme.
In any event, there was some share price weakness immediately after the issue as so called long term investors immediately sold out once they recognised there were minimal stag profits to be made. I was able to take advantage of this and buy more shares on market at very close to the issue price. These purchases mean that looking into my five year performance review window may average holding time for my incremental investment has been one year and three months. The pink line shows my average purchase price.
Readers will see that initially my average purchase price is at a significant discount to average market trend price. However, over subsequent months the share price deteriorated. At the end of my review period (30-09-2010) my average top up purchase price was only just above the market closing price.
Inevitably when a share price declines over a period you cannot be happy with that investment performance. However, the extra capital that I invested in SKC did not decline over the five year period, and only having that capital invested for 15 months of that five year period was a contributing factor.
SNOOPY
Hmmm...well it took 3 or 4 stabs but seems to have broken thru the $3.50 ceiling..
Will it hold?
Very positive progress on the new convention centre.Sounds as though a fair bit of horse trading has been going on.A very important project,for Auckland,New Zealand,and Sky city.More tables for more customers.
So (quote) "It is estimated that the proposed centre will provide a $90 million annual boost to the economy through new spending by additional international visitors."
Just like the sums for the proposed rail link Auckland were rubbish in Treasury eyes this Sky City should be given a yellow or red card as well
Hell what's the country coming to - a business friendly government
Never mind ... its a goer cause John said so
It was always the obvious choice out of the 5 options unless political medling got in the way. Luckily (for SKC), the recession/earthquakes mean they have gone for the fullly funded option and not the ones that would ask for money (from memory - by the Auckland city council at aotea square, maori on the railway land, IFT on the bus depot land and the one by the elislie convention center)
I valued SKC somewhere between $3.59 (using a DCF model, which had rather conservative assumptions- 2.8% terminal growth, ~10-11% WACC) and $3.75 on a P/E basis (using an average over a range of other casinos such as Tabcorp). It has some decent possibilities for growth, but it does need to spend relatively large amounts on facilities etc, despite the bulk of its revenue seemingly coming from committed gamblers who are attracted by the tables not so much the facilities they are contained in. There seems like more that management could do wtih all of the cash coming in.
I see them trying to position themselves in Adelaide and Auckland in the "event" or "where it happens" centre. No use having your business miles away from "the action". Having the convention centre as part of the SkyCity complex achieves this.Their approach with the Adelaide sports complex will funnel people Sky's way.As in most businesses location is most important.Activity breeds activity.
Of course it is not in doubt that they need to spend large amounts on these (rather nice if I may say) projects. It is just that they do seem to need a relatively long period to pay themselves back. SKC does not make much from conferences, but they will make a lot more if they can add some extra gaming tables into the mix when they build the contre. In Adelaide they are doing the same thing lobbying the govt- saying we will spend $400m on this development if you agree to lower gaming taxes for us. It is these things that make the investments worthwhile.
The convention centre will make no profit for SKC.Convention centres need council or government backing,because you can not get a reasonable return on capital.But they bring a lot of visitors to the city.
So the reasons for SKC to put up the money are; attract people to their area,govt extends their licence,and they gain more gaming tables.This is the only way they can expand and remain the only casino in Auckland.
SKC Financial Result due in August so I just wanted to touch base on this stock. It is one of my key NZ core portfolio positions.
Fundamentally I like the story - good management good PE and yield monopoly casino etc with upside from
- Favorable regulatory changes
- Growth in Chinese tourism
- Growth in VIP market share
- Growth or takeover of Australian operations
- Takeover of NZ operations
Technically the stock has been in a nice uptrend since Sept-10 and you can draw a nice channel upwards - The SP has just jumped off the lower chnnel trendline in the last few days and seems headed for $3.90.
I'm looking for a continuation of the uptrend and a strong result and FY12 forecast driving the SP over $4.00
Broker coverage:
Mac Bank - $4.05
Goldmans - $4.00
Both Buy reccos
Aegis $3.80 Hold
Be great to hear more discussion on this stock
I hold,and down side is posible lack of return on major projects ie Auckland,Darwin,and Adelaide.Upside is these projects add to earnings.I like the stories ,and management.I think earnings may still be flat.I expect the WWC will be a good money spinner for SKC.Not expecting a lot in the short term.The major projects mean the company knows what and where they see growth.
SKC is a client of Goldman's. Personally I think that many of the above expectations are priced into the shares already, and I would say it is a good stock, but perhaps not a bargain at ~$3.80.
From The Herald:
http://www.nzherald.co.nz/business/n...ectid=10740844
I don't think Mr.Clark will be using SKC car park again.
I must admit I find airport car parking too expensive too.I have found myself a nice free legal park a short walk from Christchurch terminals,and take great delight they don't get a penny from me.Trust Mr.Clark can do the same at SKC.Suburban malls with free car parking are the answer.
Customers usually end up having the last laugh.
modandm, you have just blown your cover. It can now be revealed that you are in reality Evan Davies the former SKC CEO. When Evan was in charge, any time SKC showed any weakness in share price, Evan wheeled himself out repeating his 'takeover target' mantra. However, history shows that Evan himself was taken out and fortunately SKC is still with us.
I think it a little sad that the whole SKC company is now regarded by any investor as little more than a casino chip in a game of corporate poker. Personally I would prefer to see SKC remain 'a player' in this market. I would rather hold SKC than any of the Australian market gambling shares. The expansion into Australia got off to a bad start in Adelaide. But I am fairly sure the Darwin acquisition will prove very shrewd. And even Adelaide may yet come right if SKC can work with local government and make the old Adelaide railway station area more of a destination, in accordance to the ambitious paper plans.
The uptrend you refer to is I think people focussing on RWC and the tourism spin offs. I think that profits will fall back post RWC, but maybe not for long. This company has more management momentum that the market gives it credit for, IMO. Perversely I believe SKC is losing VIP market share to new casinos in Macau. However the overall VIP market is so strong that even losing market share in the future will produce a growth in VIP gambling profits for SKC.
As to the question is $3.80 good value, perhaps not. Potential shareholders should have bought in the so called downtrend during the last capital raising at around $2.60, which gave a great dividend yield. That's what I did and this is the reason I am now sitting pretty on my SKC holding.
SNOOPY
SKC NPAT up 21%
http://www.stuff.co.nz/business/indu...venue-rebounds
Those carparks must be full!
...a bit out of left field...and believe me I have no issue about folk making a dollar or two...but I have often wondered how clever/sophisticated one needs to be to take dosh from the most vulnerable in our society...I once drove around the casino...it looked like a barn/warehouse...what Ive heard that inside aint that pretty inside either......is it true that a few years back SKC actually won an award ...for "exceptional achievement".....it is/has been often stated that in hard times folk gamble...excuse me...I find that quite sad...sure being a nurse...this could be an expected response...what i find trully appawling is that these places actually employ folk to "hone in " on the most vulnerable aspects of human "psyche" of reward/gain....like flashing lights/attention/envy/naked greed...to extract the most dosh out of every person entering the premises....
...just curious...
...if you are being serious...me thinks we are on different planets...
PS...have you looked through SKC...at their clientale...
..pps...have you chatted to folk who live in Ryman establishments....if so fair call...otherwise.,..I remain curious...cheers
I made a living and raised a family out of crime. As a probation officer I had to go into a lot of places worse than the Casino (the only one of those I visited was in Monte Carlo). Sometimes as I made my way about one or the other of HM's hotels I would be addressed through the bars by a guest who would tell me my pedigree in the most colourful terms. If I had time I would ask the gentleman the simple question "how much an hour are they paying you to be here ? - I'm getting $xxx an hour". Believe me - there are no poor people in NZ - just those who are told they are poor and that its your fault. The tiny proportion who suffer genuine misfortune are catered for by a whole fleet of ambulances at the bottom of the hill. The clients of the Casino are mostly fools who would find another pit anyway and those who can afford this kind of thrill and would probably set up cockfighting or something similar if the Casino wasn't there. So ends my rant for the day. disc. hold a couple of thousand SKC and would buy more if I wasn't so poor.
Serious enough to react to your comments, to help put your curiosity at ease, yes I have been to Auckland Sky City, however I am not qualified to make any judgment on the clientele of Auckland casino and nor do I intend to. Secondly I have not chatted to any residents of a Ryman Rest home. But…… my mum was in a rest home run by a religious group, and her
impression was similar to many others that were in the same situation as her, not just her rest home she was in but other homes, had the same view as to your closing sentence “to extra the most dosh out of every person entering the premises”.
I guess that statement would apply to any business, including the IRD.
Disclosure hold RYM and SKC
There is a saying "if you give people what they want,you will get what you want." RYM give people security and safety in their retirement,so RYM may earn a profit.SKC give people entertaiment,excitement and a chance to gamble,so SKC may earn a profit.I stayed away from SKC as an investment for a number of years because I did not want to profit from gambling,until I went to an evening to hear Mark Waller of EBO speak.Also speaking was the CFO of SKC.Alistar .....?..,what a great speaker.He spoke clearly where SKC was,what was happening in the market,and spoke of their growth plans.I was so impressed I forgot my morals and brought the shares.!!!!
I have been a Sky City investor for over a decade. I have always considered gambling as an entertainment and not inherently evil. That is not to deny that there are people with a gambling addiction. A gambling addiction is certainly a problem. Not only to the gambler as often the innocent extended family can be the worst affected. But should you blame Sky City for this?
From p11 of the FY2009 annual report:
“The New Zealand Ministry of Health’s own statistics demonstrate that casinos are not the problem (in causing harm). Yet we are more tightly regulated than gaming machines in clubs and pubs, Lotto and on line gaming operations – a unique situation.”
And page 9
“On 1 July 2009, player information displays (PIDs) became mandatory on gaming machines in New Zealand. Sky City invested over $NZ20m to comply with this regulation. While no discernable machine revenue reduction has been noted to date that can be directly attributed to these new displays, their introduction is certainly not helpful in our endeavour to grow our gaming machine business and compete with our peers (the pubs)”
“According to Gambling Compliance, a UK gaming monitoring company, regulations governing casinos in New Zealand are some of the most stringent in the world – more so than in Australia, the US, Canada and South Africa.”
From AR2007 p49
“At a recent hearing of the New Zealand Gambling Commission it was noted that the Auckland Host Responsibility Programme is “impressive” and by national and international comparison “the best they’ve seen.”
“The harm Minimization Framework draws on the latest research and international public health models. “ “The emphasis is on both preventing harm from occurring in the first place so that customers are able to gamble responsibly, and minimizing harm when it is occurring through early identification and effective host responsibility interactions.”
From AR2007 p50
“This could be something quite informal such as speaking with the customer on a one to one basis – often this is all that is required and customers appreciate the inquiry – to an escalated response when the concern is more serious. This could lead to the customer acknowledging there is a problem and agreeing to be excluded for a period of up to two years.”
Back to p11 in AR2009
“What seems to have been forgotten is that our business is built on enjoyment and fun, not personal and financial stress. It actually makes no sense for us, commercially or morally, to pursue any other than a highly responsible approach.”
To me if we are going to have gambling in NZ, and I don’t see it being outlawed, I think you should have it:
1/ Largely contained and
2/ Administered by an outfit that is big enough to have a host responsibility program over and above what is required by law.
NZ casinos are known destinations. I would much rather see gamblers in professionally run casinos rather than hiding in pubs, TABs and Lotto outlets. I believe that as long as gambling is legal in this country and long may it be so, (I do believe that if gambling was outlawed illegal unregulated underground gambling syndicates would be far worse), Sky City Entertainment is a very beneficial organization to have operating in New Zealand. I feel no moral disquiet in being an investor in it.
SNOOPY
...will post when finish night shift...
If we are going to get into the pros and cons (or morals) of a company, should we invest in power companies that charge a rate that makes the elderly think they need to face a winter without a heater, or an oil company that drills offshore with the associated risks, or a food company whose increasing profit for shareholders is increasing the price of bread?
Anyone who invests in any company is in it for a return. Any return could be lowered for the benefit of the consumer-at the cost to the investor.
I have been in SKC since it was floated to the public. I am not a gambler. I go to Sky City once or twice a year to the theatre for a show. I've had a couple of meals there. Gambling I have spent maybe $10 total. I see a lot of people there having a good night out. The biggest rip-off there is the parking fee, but guess what? I have the option of using another parking building just down the road for a 1/4 of the price-just as people have the option of where they spend their entertainment $.
I have a relation that goes to Sky City everytime she comes to Auckland to play the pokies-loses more than she wins, but enjoys herself. Each to their own.
I haven't seen kids in cars in the carpark. I haven't seen people offering their "services" so they can put a bit more in a machine.
If casinos were shut down tomorrow so be it, but if I can get a return from sensible people having a good night out, then I can sleep okay. There are plenty of systems/support set in place for people that need help. If all past-times that had an element of risk to a section of society's well-being were banned, people would find a way around it. That's human nature. I still occasionally question my investment with SKC, but not for long. I mean, I also have CEN and with the cost of power forever going up and stories of the elderly freezing to save money, I feel worse about owning those.
Grimy, do what I did. Drop CEN and Buy into SKC. Then you can watch your money grow instead if diminishing -it's much more fun. It's not all I own.
Quite a while since anything was posted on SKC. When the interim result is released on 15 February it will be interesting to see what impact the increasing prevalence of online gambling is having on the company. Or are all those ifones etc only used for calling and texting?
;)
Interesting that Sky City now taking the moral high ground and saying that high rise brothels in the neighbourhood is not right ..... suppose they could continue to run the good parts of their business (Sky Tower, convention centre, hotel and restaurants) and close down the evil bits like the casino
They could then make some (credible) moral judgements
Well, at least my post sparked a bit of life into this thread!
Now....... does anyone have any thoughts on the effect of online gaming on SKC? A recent survey by Southern Cross University in Australia resulted in nearly a third of 6,000+ respondents reporting that they regularly gambled online. OK, they're Australians but SKC has a fair bit of its business in Aussie.
I see a few people on this thread saying online gambling will have an impact on SKC
i can say this will not be the case , not in a negative way at least.
If anything online gambling will have a positive effect.
For example the big boom in texas holdem poker would not of happened if it wasnt for the internet . The casinos are adding more and more poker tables to accomodate online players who want to have a go at playing "real poker" People who would never of gone to a casino are now drawn their due to their online card experiences
As for online pokies and the like they are a miniscule issue , which is largely a media creation. Even the most desperate of gamblers are reluctant to go down that route , as they simply distrust the honesty of the games. At least going to Auckland or chch casino to play the pokies you know your playing a fair game ,( one you will lose at longterm , but a fair one)
Have to admit i'm more interested in the Auckland Convention Centre and what is going on in Adelaide as i think these are things that can have a positive effect on share price in the short to medium term. Especally the current ongoing negotiations with the NZ govt.
Also saw a news article with a quote from the SKC's boss who was currently in Adelaide, wonder what he was doing there.....
Thanks for your thoughts, ratkin and Baddarcy.
I take your point, ratkin, although I would think that although online gamblers are generally a different "segment" from those whose who frequent casinos, there will be some effect at the margin from online gaming in future. Will be interesting to see if this happens.
The Adelaide casino is an important part of SKC's business so I would expect the boss to spend some time there. Besides, it's holiday time and he's an Aussie, isn't he?
:cool:
and there's a cricket test in Adelaide as well .... the hob nobs and pollies like to hang out at these places and oak up the free stuff
May have been on his bike in the cycle race.!!
An excellent half year result as expected: net profit up 17%. The rugby world cup came through for them, even if management said the $4.7m lift in profit was less than expected. What is encouraging is the 6.9% sales lift in Adelaide, for so long the problem child of the Sky City family. The comment that the momentum has continued at the Auckland site beyond RWC is very encouraging.
I really would have expected, given the outlook, the SKC share price to lift to these $3.65 levels last year. Nevertheless I am happy it has finally got there.
SNOOPY
discl: very happy holder
I too was very pleased with the result.Expansion at Auckland is working.Plenty of growth being worked on,Adelaide,Darwin and ofcourse convention centre.They are achieving what the set out to do.Excellent planners.
The share price has now risen to $3.73 today. That is still a PE of just over 15 if you consider $140m the new base profit level. I find it useful to look at other measuring sticks to get this in perspective.
I have a great respect for another Auckland based icon, Auckland International Airport (AIA). But with a PE over double that of SKC I cannot draw up a case for investing in it. Some people consider that AIA is a legislated monopoly, but of course it isn't. I flew to Europe and back out of Christchurch last year and didn't go near it. Sky City on the other hand is a real legislated monopoly. There is a halt on any new casino licences in all the markets in which it operates. If you follow AIA investor logic the SKC share price should be $7.46! No wonder I have no intention of selling out in the imaginable future.
SNOOPY
Yes well agree,disagree.ChCh is not the gateway to NZ;Auckland is,even if you don't use it.AIA have a huge land bank to be developed.With greater numbers going through, more chances to clip a much larger growing ticket.If you look at the developement going on near ChCh airport,you realise just how much AIA's land bank is worth.So it is very much a monoply by location.. Same as comparing LPC to POT.
As to whether I would sell SKC to buy AIA or sell AIA to buy moreSKC I have to confess I am happy to hold both.As for selling POT which is getting high to buy LPC,the answer is no,however LPC looks undervalued at present,but I think POT is better situated for growth.
The gateway to NZ is a slogan Percy. Yes more people come through Auckland than any other airport for now. But if AIA increase their prices too much then airlines can go elsewhere. "Air Asia X", for example, does not fly through Auckland. That means for heck of a lot of tourists from Malaysia, AIA is irrelevant already. I think you could argue that every business who doesn't have a competitor housed in the same multi story building they are in is 'a monopoly by location'.
Contrast that to Sky City casino. Try to get a casino licence to build a casino anywhere else in New Zealand and see how far you get. I am not criticizing AIA in any operational sense. They are first class operators. I concur with you on the value of the AIA land bank. My only question is, "Is the price of admission to AIA worth it?", given you could buy into SKC - IMO is a much more entrenched monopoly - at half the AIA admission ticket price?
To further support my case for SKC I would like to point out that unlike AIA, it is not a "one location business" with substantial offshore assets in Darwin and Adelaide, as well as the core business in Auckland.
SNOOPY
Try buying land in auckland to set up in opposition.AIA also have interests in Queenstown,Cairns and Townsville airports.
To answer the question which share would I buy if I did not own either,I will have to pass on,as I think the outlook for both is outstanding.
Snoopy.
" given you could buy into SKC - IMO is a much more entrenched monopoly - at half the AIA admission ticket price? "
SKC is $3.73 today.. AIA is $2.475..
Not disagreeing or agreeing with your analysis of the two companies..
Just your maths.. $3.73 is not half of $2.475.
The difference in dividend is only 0.7%
What have I missed ??.
Sorry if I didn't make myself clear Janner. There is nothing conceptually with your proposition, comparing one share price with another! When I said 'half the admission price' I was talking about the share of the profits attributable to your shareholding verses what you pay to hook into those profits.
If one company has a PE of around 30 (AIA) and another has a PE of 15 (SKC), then for every dollar you put into SKC you will get twice the money out compared to putting that same dollar into AIA (assuming an equivalent dividend payout ratio). Effectively the market is telling us that AIA is twice as good as SKC, and I don't believe that this is true.
SNOOPY
Infratil did just that, and found Whenuapai
Never likely to be significant compared to the Auckland asset IMO. Good feeders and dispersed billboards for putting traffic into Auckland, I will grant you that. But I don't consider them any more significant than SKC's casino interests in Queenstown and Christchurch.Quote:
AIA also have interests in Queenstown,Cairns and Townsville airports.
Agreed on the superior outlook for both AIA and SKC, but the price of admission to SKC is only half that of getting into AIA. For me that would (has) swung my own shareholding the SKC way.Quote:
To answer the question which share would I buy if I did not own either,I will have to pass on,as I think the outlook for both is outstanding.
SNOOPY
I think we agree on the outlook for both.The way you are looking at the two companies is correct.
Whenuapai was unfortunately a non starter. So still have to find the land.
Exciting stuff,AIA with hotels etc being built on their land with a huge land bank to develope,while
SKC, if they can get the convention centre deal,make Adelaide developement,and Darwin resort work can take on anything.!!![and most probably will].The next 10,20,30 years will be rewarding.Fun trying to think 20 to 50 years ahead and then working backwards.
I think AIA moat is stronger,but paying twice the amount for it? Now you have me off the fence I am inclined to agree with you to go the SKC way,however should Auckland convention centre deal fall over I think we will have to look at it again.
Thanks for your explanation Snoopy..
It all comes down to VALUE for money doesn't it .
Personally i wouldn't be too disappointed. The additional capex and risk around achieving the benefits make the project a huge risk imho - as a shareholder i am concerned. Reading the isto research on SKC most are similarly wary.
Similarly AIA has been putiing off the 2nd runway and new dom terminal for ages - these projects just dont earn economic returns. The best option for shareholders is generally just to eek every last dollar from existing assets and only fund new ones where there is a strong investment case. Whether the case is overly ambitious in regard to the convention centre I don't know - I don't think anyone does - but when its is all said and done in 10 years I think SKC will admit the investment was marginal.
While recently in both Melbourne and Adelaide I took the opportunity to check out both respective casinos. Time for both visits was between 6:30 and 7:30pm on a weekday evening. There was a noticeable presence of people about in both, but not what I would describe as a crowd.
Sky City Adelaide is based in the upper structure of the historic railway station building . The basement floor is I think still used for some commuter trains. There is a new build upmarket restaurant called Norths attached to one side of the building. There are two internally accessed restaurants a buffet and a grill on the top story and a ready food style cheaper restaurant on floor one.
The structure is quite segregated inside with many historic décor features maintained, and there are site plans accessible if you get lost. I would describe the general décor as smart but restrained. There are areas for 1c machines , 5c machines etc., and distinct areas if not distinct rooms for table games. There is an internal wall courtyard smoking area on the top level. The old railway station site is slightly offset and away from the main Rundle Mall shopping street. That means you have to make a deliberate decision to go to the casino. There is no on site accommodation, although the casino is sited within the hotel district.
Crowne Melbourne, by contrast, is a modern (20 year old?) purpose built tower hotel with a sprawling casino and two-level shopping mall beneath. It is sited on the riverbank where many Mebournites and tourists walk. There are many ground level restaurants, cafes and gelato ice cream bars, which from the look and pricing of them are run by renter operators. These eating establishments open to public areas and capture people walking by, people not necessarily going to the casino. The next level up is a mall of mainly upmarket jewellery and clothes shops sited presumably to snare any table winnings. I don’t remember noting any customers in them. These are marble floor and marble wall establishments. Somewhere along that floor you get to walk into the ‘casino proper ‘. My overall memory on entering the casino gaming area was a scene of alternative worldliness.
There were walls of shimmering light and mirror effects. It was unclear to me just what area of the casino I had got into. The slot machines and tables seemed a lot more mixed together than in Sky City Adelaide. Many of the internal casino walls were curved, confusing my orientation. The only real way I knew that I was moving from one ‘room’ to another, was the presence of dual internal guards as I walked from section to section. I wandered into a ‘members’ section and was turned back. However, I think I could have bought a members card for about $25. So I am not really sure what the purpose of having a so-called exclusive sub section of the casino was. Superficially it just looked like the rest of the casino to me! Eventually I found some poker tables downstairs. I found a good internal eating place amidst machines and tables in the ‘East–West’ buffet restaurant. There were dedicated internal a la carte Vietnamese and Korean restaurants too. Also labels alternately written in Chinese characters. I got the impression Crowne was very serious about looking after their Asian guests. As for me, after I had eaten I couldn’t get out of the place fast enough!
I am not trying to judge, which of these two casino establishments is the relative winner. I would say both have been honed to their respective target markets. But it did strike me how very different these two casinos felt to me in terms of atmosphere, and how different the business models must be. I would be interested if others who had visited either/both had similar or contrasting experiences.
SNOOPY
Discl: hold SKC
'a scene of alternative worldliness.' .... I had to think what you meant but I think I got the gist ... my experience is that that Crowne place is horrible
I read somewhere the Americans were increasing their presence in Darwin to 2,500 servicemen, up from 500 I think.
May we extend a big welcome to the boys.!!!!
Bit of a hiccup on the earnings front .... prob keep the shareprice under $4 for a few months
Wasn't that a shocker of news story on TV1 tonight .... complete and utter contempt to do the right thing ... and they blame the computer
Looking at the pictures of the Board they would fail a reasonable diversity test .... and completely fail an ethnicity one
Senior management looks the same .... the usual notional woman gets the HR job and thats about it in NZ ..... and they looked pretty pale skinned to me as well
Maybe that's the problem .... they need more women in control
But then again women might be straight up and down and not get involved in any political shannigans and that would not be good for shareholders .... shame eh
Bit of an over-reaction if you ask me.
So they hadn't removed her from the txt sales database - big whoop someone made a mistake get over it.
As for the rant - what do you want - the best people or someone appointed because they are a woman or not white. Get with it man.
Agree modandm !!..