SKC - Sky City

[Leemsip]

This is starting to look pretty good price wise. Currently on p/e of 9 or 10, coming out of a huge capex cycle (Horizon Hotel, Conference centre), and having paid some serious wedge to settle fines. These new facilities will all start to print money when they go live, I think the latest on the hotel is August, not sure about ICC. Hopefully the company has taken action to ensure no further breaches of regulations etc.

I would press the buy button, but we are only mid way through the epic series of punishing regulatory actions. Still got Adelaide casino review (is SKC ok to keep holding the license) and the NZ govt (DIA) smack down to come...

So currently $1.50 share price. I am very confident this will work out well in the long term. However I think this goes down further when these next regulatory actions hit. Just a waiting game now... trying not to go too early... Crazy that this could go lower still....

[Aaron]

9 times forecast NPAT.

Is retail spending still falling? and are we through the recession yet? I would have thought that for most people gambling is a discretionary expense and how much will that affect SKC's turnover if the recession has further to go.

I would have thought that a lot of SKC's expenses are largely fixed and any drop in turnover would flow through to the bottom line, although I have not done any research.

Job layoffs and higher interest rates as fixed loans rollover are they just happening now?

I have not done any research but wonder if online gambling might take a chunk of the hard core gamblers money? Obviously a night out at the casino can't be replaced at home.

Just posting because I am avoiding work, I have not done any research so ignoring my comments above is probably a good idea.

[Leemsip]

yeah Aaron, good calls, recession will impact, slowdown in tourism coming through with reduced cruise ships. Economy is sh#t and getting worse.

I am of the view that the share price will turn around before the economy does, so trying to time this and go early (but not too early).

[bull....]

star entertainment saying today revenue down 5% last quarter so i guess adelaide be down similar amounts

[Sideshow Bob]

https://www.nzx.com/announcements/433350

SkyCity sells equity investment in Gaming Innovation Group Inc

SkyCity Entertainment Group Limited (SkyCity) advises that it has entered into an unconditional agreement to sell its entire shareholding of around 10% in Gaming Innovation Group Inc (GiG), a European-based online gaming platform provider and media services operator. The net proceeds of the sale are approximately NZ$55 million after brokerage and legal costs.

SkyCity intends to use the proceeds of the sale to pay down debt as part of its ongoing prudent approach to capital management.

SkyCity continues to have a valuable relationship with GiG through its involvement with the SkyCity Online Casino (operated from Malta). However, SkyCity has decided to divest its shareholding in GiG as it is non-core to its ongoing operations, and is now not considered strategically necessary for SkyCity.

SkyCity acquired its shareholding in GiG in April 2022 for €25 million (approximately NZ$40 million at that time).

[bull....]

another earnings downgrade today

[buy_high_sell_lo]

another earnings downgrade today

Looks the same as their previous update?

[Balance]

Looks the same as their previous update?

Shows just how shallow Bull… really is. No analysis, no assessment and no comprehension.

[bull....]

Looks the same as their previous update?

6/6/24 ebitda is 280 - 285 in there trading update
26/6/24 ebitda is forecast to be 250 - 270 it is mentioned for early 25 forecasts in there trading update in the presentation

anyway i stayed the night there this week and had a good look round etc offering discounts at the moment which they dont normally do on stuff , relatively quiet compared to other visits i have done so i can understand the downgrade to outlook. just a reflerction of the times

[buy_high_sell_lo]

6/6/24 ebitda is 280 - 285 in there trading update
26/6/24 ebitda is forecast to be 250 - 270 it is mentioned for early 25 forecasts in there trading update in the presentation

anyway i stayed the night there this week and had a good look round etc offering discounts at the moment which they dont normally do on stuff , relatively quiet compared to other visits i have done so i can understand the downgrade to outlook. just a reflerction of the times

I believe you have gotten the FY24 update and FY25 forecasts confused.
All SKC have done is reiterated their earnings update from 06 of June.

Underlying Group EBITDA for FY24 of between $280 million and $285 million and underlying Group NPAT for FY24 of between $120 million and $125 million

Underlying Group EBITDA for FY25 to be between $250 million and $270 million.