Adelaide Casino’s revenue was flat last financial year due to a soft economy and rail line closures, its owner SkyCity reported today.
The company’s outlook, however, is positive after it secured agreements with the State Government for tax rate concessions and VIP gaming products.
It expects to conclude further agreements relating to its proposed Riverbank precinct redevelopment “within the next couple of months”.
“Adelaide’s Normalised Revenue of A$160.4m for FY13 was flat on FY12 which, considering the economic climate in SA, was an acceptable outcome,” SkyCity said in its full year report posted on the stock exchange today.
“Electronic gaming machine revenue of A$59.9m was impacted, as elsewhere, by the Bally gaming system implementation, as well as Adelaide railway line closures which had a negative impact on 2H13.
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“Local table games revenue increased to A$75.7m (3.6%).”
Pre-tax earnings for the Adelaide operation were $37.9m, $1.2m higher (3.3 per cent) than last financial year, due to an ongoing focus on cost control measures, the company said.
The Casino operator’s planned redevelopments on the Riverbank precinct still have some hurdles to clear.
“We expect to conclude agreements with the SA Government over the next couple of months and commence interim capex works to activate VIP product and tax rate concessions in the second half of FY2014.”
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The full-year profit for the whole of the New Zealand-based SkyCity Entertainment Group fell eight per cent.
It attributes the result, which misses estimates, to a flat result in New Zealand’s biggest city and one-off benefits from the previous year which weren’t repeated.
Net profit fell to $NZ127 million ($A112.28 million) in the year ended June 30, from $NZ138.9m, a year earlier, the Auckland-based casino and hotel company said.
Sales fell 0.3 per cent to about $NZ948m.
Profit lagged behind First NZ Capital’s forecast $NZ129.2m, while normalised profit, which strips out one-time items and other adjustments was $NZ136m, below the “about $NZ140 million” guidance SkyCity gave with its first-half results in February.
Chief executive Nigel Morrison listed one-time factors that boosted profit a year earlier, including $NZ4.7m from the 2011 Rugby World Cup, the sale last December of its 50 per cent interest in the Christchurch Casino and a higher win rate in the second half of the latest year.
In addition, he said, the benefits of strong growth in earnings from Darwin were eroded by the kiwi dollar’s strength against its Australian counterpart.
“The biggest achievements of the past 12 months, winning legislative approval from the South Australian State Parliament to expand its Adelaide complex and increase its gaming platforms, and gaining buy-in from New Zealand’s government for similar concessions in exchange for building an Auckland convention centre, won’t show up for some years,” the company said.
Morrison said the deals “will underpin the foundations of our long-term future growth.
“In Adelaide…we expect to conclude agreements with the SA Government over the next couple of months…”
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