SkyCity Entertainment Group (SKC) H2 2024 earnings summary

Executive summary

• FY24 group revenue was flat year-over-year at $959.6 million, with underlying EBITDA down 8% to $277.8 million amid a challenging operating environment and increased investment in compliance and transformation.

• Underlying NPAT was $123.2 million (down 7.2%), while reported NPAT was a loss of $143.3 million due to significant accounting items, including asset impairments and tax changes.

• No final dividend declared for FY24; interim dividend of 5.25 cps was paid, and no dividend is expected for FY25.

• Major transformation and compliance uplift programs are underway, with significant investment in risk, compliance, and people.

• Key projects include the Auckland car park buyback, Horizon hotel opening, and NZICC set to open in 2025.

Financial highlights

• Underlying EBITDA: $277.8 million, down 8% year-over-year; reported EBITDA: $138.2 million, down 16.7%.

• Underlying NPAT: $123.2 million; reported NPAT: loss of $143.3 million due to impairments and tax changes.

• Group expenses increased 5% year-over-year, with people costs up 4.5% and risk/compliance costs up $2 million to $22 million.

• Interim dividend of 5.25 cps paid; no final dividend declared.

• Net debt was $663 million, with a leverage ratio of 2.3x and $252 million in undrawn facilities.

Outlook and guidance

• FY25 underlying group EBITDA guidance: $245–265 million; no dividend expected for FY25.

• $20–30 million of FY25 costs allocated to risk/compliance uplift, Adelaide regulatory costs, Horizon hotel, and NZICC pre-opening.

• Core capex for FY25 expected at $60–70 million, focused on property maintenance and gaming equipment.

• Mandatory carded play to be implemented in NZ by July 2025 and in Adelaide by early 2026, with an estimated 15–20% impact on uncarded gaming revenue.

• Preparations ongoing for NZICC opening and regulation of online casino gambling in New Zealand.