Skyline

[Arthur]

I think that if they pull the right strings they would get a very sweet debt package. Domestic tourism is about 57% of the market, add in Aussie and a few places like South Korea and we could be back to 2015 numbers. Skyline made a profit every year I could research, they sailed through the GFC (I do not expect them to make a profit this year). Disclosure, just bought some.

[Beagle]

I think you've underestimated how many Kiwi's will return this year, (I won't be for one). $250m is truckload of debt given the size of their balance sheet. Amazing how that project blew out from initial estimate of $60m just a few years ago ! I can't help wondering what it really costs to complete when its finally built ?

Hope you're not counting on any profit in FY21 either...and good luck, I think you'll need it !

[kiora]

I don't need luck as I don't own any

[whatsup]

I think you've underestimated how many Kiwi's will return this year, (I won't be for one). $250m is truckload of debt given the size of their balance sheet. Amazing how that project blew out from initial estimate of $60m just a few years ago ! I can't help wondering what it really costs to complete when its finally built ?

Hope you're not counting on any profit in FY21 either...and good luck, I think you'll need it !

Not as bad as the Auck harbour bridge from the initial $50,000,000 to a now estimated $350,000,000 and they haven't even confirmed on the plans.

[Sideshow Bob]

I was a bit interested in seeing what the segment revenue was, and where they made their money. $71m operating profit 2019.

Thought the Chch Casino would be a bit more profitable, but only about 1/4 of revenue ($60m) and operating profit was only $10m. Hmmmm Not really going to carry them through. Accounts for around 1/3 of their staff. Obviously shutdown now, but not really reliant on tourists so much. Are casion's recession resilient to a degree?

Tourism is about 2/3rd of their incoming (rest is property investment and all other segments). Accounts for the lions share of their operating profit - $57m last year. About 75% of their tourism revenue in NZ, rest off-shore.

Total Equity approx. $430m with no long term debt. Would be a (very) gutsy call to do an expansion in Qtown now - but possibility to save money while construction on a downer and not doing work when busy with tourists.

Some of those assets are very strong assets and effectively irreplaceable, generating good returns ordinarily. But would be a throw in the bottom draw share for the moment. Still even at a price target of say $10, minimum shareholding of 4,000 means $40k.....

[kiora]

NZ tourism spending
https://en.wikipedia.org/wiki/Tourism_in_New_Zealand
" International and domestic tourism contributes, in total, NZ$34 billion to New Zealand's economy every year.[2]
Domestic tourist spending of NZ$20.2 billion a year still[when?] exceeds that of international visitors (NZ$11.8 billion).
By far the highest number of New Zealand's tourists (about 45%) come from Australia due to close proximity and relations.(NZ$6.3m)"

[Sideshow Bob]

NZ tourism spending
https://en.wikipedia.org/wiki/Tourism_in_New_Zealand
" International and domestic tourism contributes, in total, NZ$34 billion to New Zealand's economy every year.[2]
Domestic tourist spending of NZ$20.2 billion a year still[when?] exceeds that of international visitors (NZ$11.8 billion).
By far the highest number of New Zealand's tourists (about 45%) come from Australia due to close proximity and relations.(NZ$6.3m)"

Tourism industry (and especially the ski industry) would be really keen to get a trans-tasman bubble going. But we need them more than what they need us....

[Sideshow Bob]

https://www.nzherald.co.nz/business/...ectid=12327271

[Beagle]

https://www.nzherald.co.nz/business/...ectid=12327271

Very pleased I decided to avoid this one back in 2017 in the $25 range. Some very difficult years ahead. They should just scrap their $250m Queenstown expansion plans. Tourism volumes are likely to stay low for many, many years.

[Arthur]

Truth be told Beagle your analysis helped me pull the trigger when the price dropped 50%. I reckon taking a five year view it is a safer bet than Auckland Airport. Here is my guess - within six months Korea and Canada will be back to near normal. Their Queenstown, Singapore and Rotorua operations will be at about 75% of the recent peak. Christchurch Casino will be about 90%. The Queenstown hotel will be bundled with Gondola packages to keep up occupancy rates. Sheffield will go ahead but the NZ projects will be right sized (unless the Local and Central Governments view the upgrades as infrastructure and reduce the redtape)