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Thread: SKC - Sky City

  1. #601
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    Quote Originally Posted by JayRiggs View Post
    I wasn't thinking of selling back then. It's about 1% of my portfolio so I'm not too fussed.
    Back in 2016, I thought things were looking good when it was over $5. Then there was the whole fiasco where Crown Resort employees were arrested in China, combined with average trading updates, sending SKC shares down to $3.60 in the space of a few months.
    7+ years holding this stock, share price and earnings growth average at best.
    But I'm willing to hold on till America's Cup 2021 and completion of the National Convention Center, which will bring in the big bucks
    Valid point and I think I missed to look at that. I'm also interested in seeing the results after the National Convention Center, is something that I haven't followed up the progress of it, is it Fletcher the contractor?.

    I mainly hold it because they kept the dividends and I thought it was a good monopoly company but I guess I was a bit wrong with my observations.

  2. #602
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    Quote Originally Posted by see weed View Post
    Bought last block today for 3.88. Got a busy month this month chasing divs. But will update my results at end of financial year, and talk tax obligations.
    About tax obligations, do you hold in any particular entity?. Thanks.

  3. #603
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    Quote Originally Posted by MauroNZ View Post
    About tax obligations, do you hold in any particular entity?. Thanks.
    I am the cleaner come part time trader.....clean up unwanted shares and put them in the top draw for resale.... and collect a div on the way through if possible.
    Last edited by see weed; 02-03-2018 at 11:46 AM.

  4. #604
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    There are 6 buy orders @3.81 amounting to 760,000 shares... wonder why one of this is not an "as usual- off market trade"...??

  5. #605
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    Quote Originally Posted by carrom74 View Post
    There are 6 buy orders @3.81 amounting to 760,000 shares... wonder why one of this is not an "as usual- off market trade"...??

    Join the queue - they are waiting for a massive crossing at $3.80.

  6. #606
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    Default Corporate Indebtedness FY2017 Perspective

    Quote Originally Posted by Snoopy View Post
    The indebtedness of a company is one factor that influences 'investment risk'. 'Investment risk' influences the return a new investor into Sky City today might expect.
    Sky City earned $146.847m in normalised profit over FY2016. When you stack this up against the corporate loans that the company must eventually repay:

    Current Loans $38.028m
    Non-Current Loans $389.032m
    Total Loans $427.060m

    then the 'minimum debt repayment period' (MDRP) is a mere:

    $427.060m / $146.847m = 2.9 years

    That is expectedly (given the cash issue a month before balance date) low. Yet there was a reason behind the cash issue. SKC has committed to spending $NZ700m at the Auckland site, the majority of that going towards the new Convention Centre. Furthermore, Sky City is committed to spending $A300m ($NZ333m assuming $A0.9 =$NZ1-) more on the Adelaide development. These are huge committed costs, largely not reflected on the books as at 30-06-2016.

    We are told that during the year $8.674m of interest has been capitalised at an interest rate of 6.03%. This implies capital expenditure of:

    $8.674m / 0.0603 = $143.8m

    I believe that this money relates to capital already spent developing the Auckland site. So this leaves:

    $700m - $144m = some $556m still to spend

    If we add the Auckland and Adelaide expected development debts to the company debt as at 30th June 2016, a different picture of indebtedness emerges.

    Current Loans $38m
    Non-Current Loans $389m
    Incremental Auckland Indebtedness $556m
    Incremental Adelaide Indebtedness $333m
    Total Loans $1,316m

    The MDRT now blows out to:

    $1,316m / $152.3m = 8.6 years

    I would describe this as getting towards the high end of 'medium indebtedness'. This is not unusual for a company with a relatively secure recession resistant cashflow stream available. I haven't considered any reinvestment via the dividend reinvestment scheme which would reduce this figure. But it is clear to me that SKC does not have a lot of room to move on any other capital initiatives.
    I tend not to worry much about the indebtedness of the larger cap companies. But I thought this comparative table from another thread is of interest.

    Company & Financial Year Mercury 2017 Sky City 2017 Spark 2017 AWF 2017 (AbsIT 12mnths)
    EBITDA(F) {B} $523m $307m $1,016m $15.664m
    Finance Cost {C} $95m $31.1m $48m $1.659m
    Interest Coverage {B}/{C} 5.5 9.8 21.2 9.4
    Net Funding Debt {D} $1077m $889m $935m $32.383m
    Leverage ratio {D}/{B} 2.1 2.9 0.9 2.1

    My calculation of SKC net debt was:

    (Long term Debt) + (Short Term Debt) - (Cash) + (Deferred Licence Value Liability)

    "The deferred licence value relating to Auckland $405m and Adelaide $150m will be transferred and offset against property plant and equipment when the New Zealand International Convention Centre and Adelaide redevelopment have been completed."

    I make this post in the context of the just announced sale of the Federal Street parking building for $40m (vs book value of $22m) YAY! But then I noted that although a $4m deposit is banked immediately, the balance due and actual handover doesn't happen until a year later BOO!

    Then I read about the potential sale of the Darwin Casino, and the fact that SKC are so keen to get cash out, they are prepared to consider a 'partial sale' of that business. It does look to me like SKC are headed towards some kind of 'debt crunch', so keen are they to accept divestment deals with 'interesting' terms attached.

    SNOOPY
    Last edited by Snoopy; 15-05-2018 at 09:56 PM.
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  7. #607
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    hey snoopy
    they sold the carpark!

  8. #608
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    Quote Originally Posted by peat View Post
    hey snoopy
    they sold the carpark!
    That is what the headline of the press release said, but actually they haven't sold it yet if you read past the headline. The $36m Settlement of the balance doesn't happen for a year, because the first stage of the nearby Convention Centre car park isn't finished. If SKC actually had sold the Federal Street car park now, all those high paid SKC execs would have nowhere to park!

    I am surprised that the buyers agreed to put down $4m as a deposit, with not a hint of any return on that money until ownership is actually transferred. Technically the buyer, ICD Property Investment Limited, has just made a $4m low (i.e. no) interest loan to SKC: All good for reducing SKC interest payments I am sure!

    SNOOPY
    Last edited by Snoopy; 15-05-2018 at 10:13 PM.
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  9. #609
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    Quote Originally Posted by Snoopy View Post
    That is what the headline of the press release said, but actually they haven't sold it yet if you read past the headline.

    Technically the buyer, ICD Property Investment Limited, has just made a $4m low (i.e. no) interest loan to SKC: All good for reducing SKC interest payments I am sure!

    SNOOPY
    well its a little bit semantic but if the deal is unconditional then they have sold it (with delayed settlement) and a deposit is quite usual

  10. #610
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    Plenty of cash coming out of sin city

    At least they keep making more than expected from the international high rollers

    http://nzx-prod-s7fsd7f98s.s3-websit...874/284080.pdf
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

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