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'KYCITY

ENTERTAINÀtENT GßOUP

11 February 2015

SKYCITV Ent€rtalnment Group Llmlted
Federdl House 86 Federal Street

Client Market Services
NZX Limited
Level 1, NZX Centre
11 Cable Street
WELLINGTON

PO Box

6443 Wellesley Street

Auckland New Zealand
Telephone +64 (0)9 363 6141
Facsimile +64 (0)9 363 6140
www.skyc¡tygroup.co.nz

Dear Sir/Madam
RE

:

SKYCITY ENTERTAINMENT GROUP LIMITED. SKC
TNTERTM RESULT (FOR THE SrX MONTHS TO 31 DECEMBER 2014)

We supply herewith the financial information as required by Listing Rule 10.4
together with a copy of the company's FYl5 Interim Result presentation and the
SKYCITY Entertainment Group Limited financial statements for the six month
period ended 31 December 2014.
Please find attached:
1.

Appendix 1 (Rule tO.4.2) detailing the Preliminary Announcement for the
six month period ended 31 December 2014.

2.

FY15

3.

Appendix 7 (NZX Listing Rule 7.12.2) detailing the interim distribution of
NZ$O.10 cents per ordinary share to be paid on 2 April 2015 to those
shareholders on the company's share register as at 5.00pm on 20 March
2015.

4.

Financial statements and notes for the six month period ended 31
December 2OI4.

5.

ASX Listing Rule 4.2A.2 declaration by directors in respect of the half year
financial statements and notes.

6.

Media release.

Interim Result for the six month period ended 31 December 2OL4.

Yours faithfully

f
/,
Rob Hamilton
Chief Financial Officer

 SKYCITY Entertainment Group Limited
Results for announcement to the market
Reporting Period
1 July 2014 to 31 December 2014
Previous Reporting Period
1 July 2013 to 31 December 2013
Reported
Reported revenue including
gaming GST from ordinary
activities
Reported revenue from ordinary
activities 1
Reported profit (loss) from
ordinary activities after tax
attributable to security holder
Reported net profit (loss)
attributable to security holders

Amount (000s)
Percentage change
NZ$495,514

Normalised
Normalised revenue including
gaming GST from ordinary
activities
Normalised revenue from ordinary
activities
Normalised profit (loss) from
ordinary activities after tax
attributable to security holder
Normalised net profit (loss)
attributable to security holders

Amount (000s)
Percentage change
NZ$510,012

6.5%

NZ$451,467

6.6%

NZ$54,559

-10.6%

NZ$54,559

-10.6%

9.2%

NZ$463,805

9.1%

NZ$66,534

0.3%

NZ$66,534

0.3%

Note: Normalised results sets International Business win to theoretical win rate of 1.35% and
adjust for certain revenue and expense items. Reconciliation between reported and normalised
financial information is provided at the end of this document.

1

On the Income Statement this is the total of Revenue and Other Income

 Interim Dividend

Amount per security

Imputed amount per security

NZ$ 0.10

-

Record Date
Payment Date

20 March 2015
2 April 2015

Comments:

SKYCITY’s FY15 interim performance is set out in
the Company’s Result Presentation which is attached
to this announcement. It provides detail and
explanatory comment on operating and financial
performance for each business unit and the Group as a
whole and various other relevant aspects of the
financial performance for the six months ended 31
December 2014.
The Result Presentation will be available on the
Company’s website from 11 February 2015.

NTA Backing

Net tangible asset backing per ordinary
share
Net tangible asset backing per ordinary
share – excluding Adelaide
redevelopment accounting

2014
44.5¢

2013
73.4¢

70.4¢

73.4¢

Net tangible asset backing per ordinary share has declined as a result of the increase in the
carrying value of the Adelaide Casino Licence (an intangible asset excluded from the
calculation) and the associated Deferred Licence Value (treated as a liability). If these items
are both excluded the Net tangible asset backing per ordinary share would be 70.4 cents per
share.
Auditors
This report is based on accounts that have been the subject of a review by the company’s
auditor. Their review report is provided with this preliminary final report.
Earnings per share

Reported
Normalised

Amount (cents per
share)
9.3
11.4

Percentage change
-12.3%
-0.9%

Reported earnings per share for the six months to 31 December 2014 were 9.3 cents per share
(31 December 2013: 10.6 cents per share). Normalised earnings per share for the six months
to 31 December 2014 were 11.4 cents per share (31 December 2013: 11.5 cents per share).
“Normalised” eliminates certain revenue and expense items and adjusts International VIP
commission business win rate to theoretical.

 Dividends
25% of the April 2015 dividend will be franked for Australian purposes (unimputed for New
Zealand).
Reconciliation between reported and normalised financial information
1H15
Revenue EBITDA

1H14
EBIT

NPAT

EBIT

NPAT

66.6

$m
467.0

$m
149.8

$m
111.6

$m
66.4

(1.5)

(1.0)

-

(1.6)

(1.6)

(1.1)

(0.3)

(0.3)

(2.3)

-

-

-

(1.1)

-

-

-

-

(0.3)

(0.3)

(0.2)

-

(0.5)

(0.5)

(0.4)

-

(1.1)

(1.1)

(0.8)

-

(0.2)

(0.2)

(0.1)

-

(0.6)

(1.6)

(1.2)

-

-

-

-

-

1.0
(3.4)

$m

$m

$m

$m

510.0

154.4

111.2

Adelaide redevelopment costs

-

(1.5)

NZICC interest and other costs

-

Strategic projects

-

Restructuring costs
Auckland project costs

Normalised

Profit from sale of Christchurch
Total Adjustments

-

-

Revenue EBITDA

-

(2.5)

(2.5)

(3.8)

-

(3.6)

(4.6)

Adjusted

510.0

151.9

108.7

62.8

467.0

146.2

107.0

63.0

International Business at Theoretical

(14.5)

(11.1)

(11.1)

(8.2)

(1.9)

(2.6)

(2.6)

(1.9)

Reported

495.5

140.8

97.6

54.6

465.1

143.6

104.4

61.1

SKYCITY’s objective of producing normalised financial information is to provide data that is
useful to the investment community in understanding the underlying operations of the Group.
Gaming revenue figures reflect gaming win (inclusive of gaming GST). This facilitates
Australasian comparisons and is consistent with the treatment adoption by major Australian
casinos
Non-gaming revenues are net of GST
Total revenues are gaming win plus non-gaming revenues
Key Adjustments are:
 Adelaide redevelopment costs – Structural redundancies and launch costs for new facilities
(Sean’s Kitchen, Black Room)
 NZICC – Interest on purchase of New Zealand International Convention Centre (NZICC)
land bank (calculated using the Group’s average cost of debt of 6.7% on an average
balance of $83m) and other costs specific to this project
 Strategic project costs - Brisbane, Gold Coast and other miscellaneous items
 Restructuring costs – Costs associated with changing the staffing structures under an
approved restructuring plan
 Auckland project costs – Project, pre-opening and launch costs related to Auckland
facilities such as the Federal Street launch. 1H14 includes Sugar Club, Fed Deli, Masu and
the new gaming rooms
IB win rate at 1.04% for 1H15 (1H14: 1.28%).
Normalisation adjustments have been calculated in a consistent manner in 1H15 and 1H14.

 SKYCITY
Entertainment
Group Limited

Half Year Result Presentation

Six months ending 31 December 2014
11 February 2015

 SKYCITY Result 1H15
1H15 Results Overview

3

1H15 Property Updates

9

January 2015 Trading Update

26

Interim Dividend

28

Capital Projects Update

30

Capital Expenditure and Funding

35

Conclusion

39

Appendices and Financial Summaries

41

www.skycityentertainmentgroup.com

2

 1H15 Result Overview
1H15

1H14

$m

$m

Movement
$m

%

Normalised Revenue (incl Gaming GST)

510.0

467.0

43.0

9.2%

Normalised EBITDA

154.4

149.8

4.6

3.1%

Normalised NPAT

66.6

66.4

0.2

0.3%

11.4 cps

11.5 cps

(0.1 cps)

(0.9%)

1H15

1H14

$m

$m

$m

%

Normalised EPS

Movement

Reported Revenue (incl Gaming GST)

495.5

465.1

30.4

6.5%

Reported EBITDA

140.8

143.6

(2.8)

(1.9%)

54.6

61.1

(6.5)

(10.6%)

9.3 cps

10.6cps

(1.3 cps)

(12.3%)

10.0 cps

10.0 cps

-

-

Reported NPAT
Reported EPS
Interim Dividend NZ$ cps
• Average NZD/AUD cross-rate during 1H15 0.9147 and 1H14 0.8820
• Weighted average number of shares 1H15 = 584,692,624, 1H14 = 578,421,022

3

 Results Overview – Key Take Outs

(page 1 of 3)



Group normalised revenue (including gaming GST) was up 9.2% to $510.0m. Normalised EBITDA was up 3.1% to
$154.4m and normalised Net Profit After Tax (“NPAT”) of $66.6m was only up marginally on the previous
corresponding period (“pcp”). Overall, the strong results of Auckland and IB were curtailed by the poor result of
Adelaide



SKYCITY Auckland, our flagship property, was again the standout performer across the group, with normalised
revenue up 17.2% to $302.5m and normalised EBITDA up 15.0% from $108.1m to $124.3m. This strong growth
continues the positive momentum exhibited during 2H14, with growth across all business segments, delivering four
consecutive quarters of EBITDA growth, on pcp



SKYCITY’s International Business (“IB”) delivered record levels of activity during the period, with group turnover
and normalised revenues up 83.6% to $4.7bn and $63.8m, respectively. Normalised IB EBITDA was up 133.9% to
$14.5m



SKYCITY Hamilton returned to revenue and EBITDA growth in the period with a pleasing second quarter.
Normalised revenue was up 1.2% for 1H15 to $25.2m and normalised EBITDA was up 6.5% to $9.8m



As previously foreshadowed, the disruption to the Adelaide Casino continued throughout 1H15 while we completed
the redevelopment works. This was completed on 22 January 2015 with the opening of Madame Hanoi. While
normalised revenue increased 4.7% to A$87.3m, primarily from IB, normalised EBITDA declined 27.4% from A$18.6m
to A$13.5m, prior to branding project costs during the period



SKYCITY Darwin achieved 2.9% EBITDA growth over the period, despite flat revenues in a challenging local market

4

 Results Overview – Key Take Outs

(page 2 of 3)



The combined performance of SKYCITY Queenstown and SKYCITY Wharf was disappointing. Normalised revenues
were down 1.5% to $6.6m and normalised EBITDA was down by $0.5m to $0.5m



The actual IB win rate for the period was 1.04% versus the theoretical win rate of 1.35%. However, a strong
performance from IB in January 2015 has resulted in the year-to-date win rate increasing back above theoretical to
1.50%



January trading has seen a continuation of the momentum exhibited during 1H15. Strong Auckland and IB activity
have delivered normalised revenues for the month of $88.6m up 23.2% on pcp. Reported revenues for the month of
$111.6m were up 63.9% as a result of the strong win rate in IB. Pleasingly, Adelaide delivered both revenue and
EBITDA growth for the month



Constructive discussions with the Crown regarding funding the additional costs of the NZICC project over and above
SKYCITY’s contractual obligation of $402m are continuing. SKYCITY remains committed to building, developing and
operating the NZICC and we are committed to achieving a solution that preserves value for our shareholders



SKYCITY is progressing various funding initiatives that will lock-in current interest rates, extend the debt maturity
profile and maintain SKYCITY’s current debt funding headroom of approximately $300m

5

 Results Overview – Key Take Outs


(page 3 of 3)

SKYCITY has announced an interim dividend of 10 cents per share. The dividend will be 25% franked in Australia but
not imputed in New Zealand. The Dividend Reinvestment Plan will not be available for this dividend, given the
ongoing negotiations with the Crown over the NZICC funding

6

 1H15 Revenue Summary by Business (incl Gaming GST)
Movement

1H15

1H14

$m

$m

$m

%

302.5

258.0

44.5

17.2%

25.2
7.0

24.9
7.1

0.3
(0.1)

1.2%
(1.4%)

334.7

290.0

44.7

15.4%

(A$)
(A$)
(A$)

87.3
73.1
160.4

83.4
72.9
156.3

3.9
0.2
4.1

4.7%
0.3%
2.6%

(NZ$)

181.9

177.0

4.9

2.6%

Normalised Revenues at constant currency

516.6

467.0

49.6

10.6%

Exchange rate impact at CY fx rate 0.9147
Normalised Revenues at actual currency

(6.6)
510.0

467.0

43.0

9.2%

(14.5)

(1.9)

(12.6)

495.5

465.1

30.4

New Zealand Casinos
 Auckland
 Hamilton
 Queenstown, Other
Total New Zealand
Australian Casinos
 Adelaide
 Darwin
Total Australia
Total Australia at LY fx rate 0.8820

Adjust International Business to actual win rate
Reported Revenue at actual currency

• Revenue (including Gaming GST) is shown above to facilitate Australasian comparisons
• Normalised Revenue is adjusted for IB at theoretical win rate of 1.35%, versus actual 1.04% in 1H15 (1H14: 1.28%)
• Average NZD/AUD cross-rate during 1H15 0.9147 and 1H14 0.8820

6.5%

7

 1H15 EBITDA Summary by Business
1H14

$m

$m

$m

124.3
9.8
0.5

108.1
9.2
1.2

16.2
0.6
(0.7)

15.0%
6.5%
(58.3%)

134.6

118.5

16.1

13.6%

(A$)
(A$)
(A$)

13.5
21.6
35.1

18.6
21.0
39.6

(5.1)
0.6
(4.5)

(27.4%)
2.9%
(11.4%)

(NZ$)

39.7

44.7

(5.0)

(11.4%)

(16.4)
(2.1)
155.8

(13.4)
0.0
149.8

(3.0)
(2.1)
6.0

(22.3%)

(1.4)

-

154.4

149.8

4.6

3.1%

(2.5)
(11.1)

(3.6)
(2.6)

1.1
(8.5)

140.8

143.6

(2.8)

New Zealand Casinos
 Auckland
 Hamilton
 Queenstown, Other
Total New Zealand
Australian Casinos
 Adelaide
 Darwin
Total Australia
Total Australia at LY fx rate 0.8820
Corporate Costs
Branding Project Costs
Normalised EBITDA at constant currency
Exchange rate impact at CY fx rate 0.9147
Normalised EBITDA at actual currency
Adjustments (Note 1)
International Business adjustments (Note 1)
Reported EBITDA at actual currency
• Normalised EBITDA is adjusted for certain items and IB at theoretical
• Average NZD/AUD cross-rate during 1H15 0.9147 and 1H14 0.8820
Note 1: Adjustments are outlined on page 46

Movement

1H15

%

4.0%

(1.9%)

8

     
   
 
   


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1H15 Property Update – SKYCITY Auckland

(page 1 of 2)



Strong Revenue and EBITDA growth was achieved across all business segments. Normalised revenue increased
17.2% to $302.5m and EBITDA increased 15.0% to $124.3m. Excluding IB, Auckland revenues increased 9.3% to $257.5m
and EBITDA 8.6% to $112.3m



Auckland delivered record IB turnover of $3.3bn up 101.1% on pcp from $1.7bn



Local tables performed strongly over the period with revenues up 11.0% on pcp, underpinned by improved customer
segmentation and experiences delivered through Eight (our local VIP table games offering), our new Baccarat room
and the success of our Federal Street restaurants



Robust performance from gaming machines, delivering revenue growth of 3.8% over the period



The revitalised Federal Street precinct and both SKYCITY Auckland hotels continue to go from strength-to-strength
and reflect the benefits of being able to offer world-class integrated entertainment facilities to our local and
international customers. We achieved a strong performance across our non-gaming businesses, namely:
–

Food & Beverage revenue was up 27.8%, underpinned by our 7 world-class restaurants

–

Hotel and Conventions revenue was up 9.3% with both the SKYCITY Hotel and SKYCITY Grand continuing to
operate at industry-leading occupancy levels and achieving strong ADR growth

–

SKY Tower, Parking and Other revenues were up 12.7% on pcp

10

 1H15 Property Update – SKYCITY Auckland

(page 2 of 2)



SKYCITY Auckland is now benefiting and delivering returns on the capital investment made in the facilities over the
past few years (including: ‘Horizon’ Villas and Salons, Eight, Baccarat Room, Black Room, Federal Street, 7 worldclass restaurants and the Grand Presidential suites)



The strong focus on cost management across the Auckland business continues to provide solid EBITDA leverage to
revenue growth with pleasing and sustained margins



The Auckland property continues to benefit from positive external influences which are supportive of sustained
growth for the property across the medium-term, including:



–

A robust Auckland & New Zealand macroeconomic environment

–

Growth in in-bound tourism into New Zealand

–

A strong calendar of events driving visitation to Auckland, from both locals and tourists

–

Supportive underlying Auckland immigration and demographics

We expect Auckland to continue to perform well for the remainder of FY15

11

 SKYCITY Auckland 1H15 – Normalised
Revenues
Machines
Tables – Local
Tables – IB (Normalised)
Normalised Gaming Revenue (incl GST)
Food and Beverage
Hotels and Conventions
Sky Tower, Parking and Other
Non-Gaming Revenue
Total Normalised Revenue (incl gaming GST)
Gaming GST
Total Normalised Revenue (excl gaming GST)
Expenses
Expenses – IB (Normalised)
Normalised EBITDA
Normalised EBITDA Margin
•
•
•
•

1H15
$m

1H14
$m

114.1
67.5
45.0
226.6
31.7
31.8
12.4
75.9
302.5
(29.2)
273.3
(121.8)
(27.2)
124.3
41.1%

109.9
60.8
22.4
193.1
24.8
29.1
11.0
64.9
258.0
(25.1)
232.9
(110.0)
(14.8)
108.1
41.9%

Gaming revenue figures as shown on this page is gaming win (inclusive GST). This facilitates Australasian comparisons
Non-gaming revenue is net of GST
Total revenue as shown is gaming win plus non-gaming revenue
EBITDA margin is calculated as a % of gaming win (GST inclusive) plus non-gaming revenue - to facilitate Australasian comparisons

Movement
$m
4.2
6.7
22.6
33.5
6.9
2.7
1.4
11.0
44.5
(4.1)
40.4
(11.8)
(12.4)
16.2

%

3.8%
11.0%
101.1%
17.3%
27.8%
9.3%
12.7%
16.9%
17.2%
(16.3%)
17.3%
(10.7%)
(83.8%)
15.0%

12

 1H15 Property Update – Hamilton


SKYCITY Hamilton returned to revenue and EBITDA growth in the period. Normalised revenue was up 1.2% to
$25.2m and normalised EBITDA increased 6.5% to $9.8m. Normalised gaming revenues grew 3.9% to $21.4m with
non-gaming revenues falling 11.6% to $3.8m



A strong and improved second quarter resulted in the poor performance of the first quarter being turned around
over the first half. The improved performance in gaming machine revenues, up 6.3% on pcp, a renewed focus on
providing a better customer experience and loyalty programme, in addition to better product, facilities and cost
management, have lead to the overall turnaround and an increased EBITDA margin from 36.9% to 38.9%



A new management team is now in place, led by Michelle Baillie (General Manager) following her promotion from
SKYCITY Queenstown. Hamilton is now being overseen by John Mortensen, who has been promoted to Chief
Operating Officer – NZ



Hamilton City Council’s ‘River Plan Project’ is supportive of the long-tem growth of the property, given its ideal
location and proximity to planned tourism infrastructure spend

13

 SKYCITY Hamilton 1H15 – Normalised
1H15
$m

Revenues
Machines
Tables – Local
Tables – IB (Normalised)
Normalised Gaming Revenue (incl GST)
Food and Beverage
Conventions, Parking and Other
Non-Gaming Revenue
Total Normalised Revenue (incl gaming GST)
Gaming GST
Total Normalised Revenue (excl gaming GST)
Expenses
Expenses – IB (Normalised)
Normalised EBITDA
Normalised EBITDA margin

•
•
•
•

17.0
4.4
0.0
21.4
3.0
0.8
3.8
25.2
(2.8)
22.4
(12.6)
0.0
9.8
38.9%

1H14
$m
16.0
4.6
0.0
20.6
3.3
1.0
4.3
24.9
(2.7)
22.2
(12.9)
(0.1)
9.2
36.9%

Gaming revenue figures as shown on this page is gaming win (inclusive GST). This facilitates Australasian comparisons
Non-gaming revenue is net of GST
Total revenue as shown is gaming win plus non-gaming revenue
EBITDA margin is calculated as a % of gaming win (GST inclusive) plus non-gaming revenue - to facilitate Australasian comparisons

Movement
$m
%
1.0
(0.2)
0.0
0.8
(0.3)
(0.2)
(0.5)
0.3
(0.1)
0.2
0.3
0.1
0.6

6.3%
(4.3%)
91.9%
3.9%
(9.1%)
(20.0%)
(11.6%)
1.2%
(3.7%)
0.9%
2.3%
100.0%
6.5%

14

 1H15 Property Update – Adelaide Casino

(page 1 of 4)



As previously foreshadowed, the overall performance of the Adelaide Casino was significantly impacted by the
disruption of the final stages of the redevelopment works over this half



Normalised revenue increased 4.7% to A$87.3m but normalised EBITDA declined 27.4% to A$13.5m, prior to the costs
associated with the major property and brand re-launch campaign that went to air in January 2015



The decline in EBITDA margins was primarily due to reduced visitation during the disruption, higher costs associated
with the launch of new gaming and food & beverage facilities, increased marketing spend during the
redevelopment phase and relatively high fixed labour costs over the period



Although local table games revenue was up on pcp (both drop and hold), gaming machine revenue was slightly
softer versus pcp. Gaming machine turnover grew by around 4%, but this was offset with a greater proportion of
premium revenue which delivered a lower hold percentage. Overall this resulted in flat local gaming revenue



Food & beverage revenue was down on the prior period for the majority of the half, whilst several outlets were
closed for redevelopment, however returned to growth following the re-opening’s to finish flat for the half overall.
Our two new signature chef offerings in Sean's Kitchen by Sean Connelly (which successfully launched in October)
and Madame Hanoi by Nic Watt (which opened on 22 January) are attracting strong visitation



The revitalised property now offers a significantly improved main and premium gaming floor experiences for
customers, new TITO and cashless gaming technologies and a greater variety of entertainment and hospitality
options, including the two new signature restaurants

15

 1H15 Property Update – Adelaide Casino


(page 2 of 4)

The physical transformation of the existing Adelaide property is now complete
–

~A$50m of capex has been invested since late 2013 redeveloping the existing Adelaide Casino

–

Additionally, A$20m was paid to the SA Government in February 2014 for the extension in licence exclusivity
through to 2035



With the completion of the redevelopment, the Adelaide Casino management team, led by Aaron Morrison, is now
firmly focused on returning the property to sustainable revenue and EBITDA growth



SKYCITY remains committed to transforming the Adelaide Casino into a world-class integrated entertainment and
casino resort and continues to develop plans for the broader expansion of the property

16

 1H15 Property Update – Adelaide Casino

Sean’s Kitchen
Opened October 2014

(page 3 of 4)

Madame Hanoi
Opened January 2015

17

 (page 4 of 4)

VIP Black Room
Opened December 2014

 

  


Adelaide Casino 1H15 – Normalised

Revenues
Machines
Tables – Local
Tables – IB (Normalised)
Normalised Gaming Revenue (incl GST)
Food and Beverage
Parking and Other
Total Normalised Revenue (incl gaming GST)
Gaming GST
Total Normalised Revenue (excl gaming GST)
Expenses
Expenses – IB (Normalised)
Normalised EBITDA (1)
EBITDA margin

1H15
A$m

1H14
A$m

28.9
40.2
10.3
79.4
7.1
0.8
87.3
(7.2)
80.1
(59.2)
(7.4)
13.5
15.5%

30.0
38.8
6.8
75.6
7.1
0.7
83.4
(6.9)
76.5
(53.4)
(4.5)
18.6
22.3%

A$m

(1.1)
1.4
3.5
3.8
0.0
0.1
3.9
(0.3)
3.6
(5.8)
(2.9)
(5.1)

Movement
%

(3.7%)
3.6%
51.9%
5.0%
0.0
14.3%
4.7%
(4.3%)
4.7%
(10.9%)
(64.4%)
(27.4%)

• (1) Excludes $1.1m of project branding costs during the period

•
•
•
•

Gaming revenue figures as shown on this page is gaming win (inclusive GST). This facilitates Australasian comparisons
Non-gaming revenue is net of GST
Total revenue as shown is gaming win plus non-gaming revenue
EBITDA margin is calculated as a % of gaming win (GST inclusive) plus non-gaming revenue - to facilitate Australasian comparisons

19

 1H15 Property Update – Darwin


SKYCITY Darwin achieved EBITDA growth over the period despite modest revenue growth and a challenging local
market. Normalised revenue increased marginally to A$73.1m while EBITDA increased 2.9% to A$21.6m
–

The performance was primarily driven by robust growth in local table games, significant growth in IB turnover
and a strong focus on cost and subsidy management

–

IB in Darwin grew significantly over 1H15 with normalised revenues up 74.8% to A$5.9m highlighting the potential
of Darwin as an IB destination. This is a core focus for continued future growth

–

Excluding IB, Darwin's revenues decreased 3.4% to A$67.2m while EBITDA increased 0.5% to A$21.5m



Despite strong local table games revenues, total local gaming revenue softened overall with local pubs & clubs
being granted permission to operate bill acceptors on gaming machines. We expect that the introduction of TITO
across the property will mitigate some of the softness experienced in 1H15



The property is expected to benefit in the medium-term from the completion and opening of ‘Aces’ Sports Bar in
April 2015, the completion of the soft refurbishment of the main gaming floor scheduled for June and the
redevelopment of the Sunset Restaurant due to commence in 4Q15



Under SKYCITY Darwin’s Casino Operator Agreement (“COA”), the NT Government will review gaming tax rates
toward the end of FY15 (and must be completed by 31 August 2015)
–

Gaming tax rates would apply for the next 10 years to June 2025

–

The COA outlines factors that the Minister must consider in his tax review, including the GST rate and the average
tax rates for similar casinos in Australia

20

 SKYCITY Darwin 1H15 – Normalised

•
•
•
•

1H15
A$m

1H14
A$m

Revenues
Machines
Tables – Local
Keno
Tables – IB (Normalised)
Normalised Gaming Revenue (incl GST)
Food and Beverage
Hotel
Conventions and Other
Non-Gaming Revenue
Total Normalised Revenue (incl gaming GST)
Gaming GST

31.2
10.1
8.8
5.9
56.0
8.1
5.3
3.7
17.1
73.1
(5.0)

32.3
9.5
9.4
3.3
54.5
9.7
5.4
3.3
18.4
72.9
(4.9)

(1.1)
0.6
(0.6)
2.6
1.5
(1.6)
(0.1)
0.4
(1.3)
0.2
(0.1)

(3.4%)
6.3%
(6.4%)
74.8%
2.8%
(16.5%)
(1.8%)
12.1%
(7.1%)
0.3%
(2.0%)

Total Normalised Revenue (excl gaming GST)
Expenses
Expenses – IB (Normalised)
Normalised EBITDA

68.1
(41.1)
(5.4)
21.6

68.0
(43.5)
(3.5)
21.0

0.1
2.4
(1.9)
0.6

0.1%
5.5%
(54.3%)
2.9%

EBITDA Margin

29.5%

28.8%

Gaming revenue figures as shown on this page is gaming win (inclusive GST). This facilitates Australasian comparisons
Non-gaming revenue are net of GST
Total revenue as shown is gaming win plus non-gaming revenue
EBITDA margin is calculated as a % of gaming win (GST inclusive) plus non-gaming revenue - to facilitate Australasian comparisons

Movement
A$m

%

21

 1H15 Update – Consolidated International Business


SKYCITY’s International Business delivered record activity during the period, with turnover across all properties
nearly doubling to $4.7bn



Growth in IB turnover was underpinned by the success of our expanded sales and marketing team, increased
recognition of our ‘Horizon’ brand and offering, higher table differential levels (NZ$250k) introduced during FY14, a
strong focus on direct relationships with our VIP customers and continued growth in the number of Asian VIP
customers visiting New Zealand



Across all properties, normalised IB revenue for 1H15 increased 83.6% to $63.8m and normalised EBITDA increased
133.9% from $6.2m to $14.5m. Auckland normalised revenue was up over 100% to $45.0m representing 70% of group
IB



The normalised EBITDA margin for the period was 22.7%, which is up from 17.8%, reflecting greater operating
leverage across the business and with junket business representing less than 40% of turnover

22

 1H15 Update – Consolidated International Business



Sustained turnover growth across IB, with a 36% CAGR
since July 2012 and 1H15 up 83.6% on pcp
An actual win % for 1H15 of 1.04% compared to theoretical of
1.35%, which, following a strong January result, has
increased back to 1.50% (as at YTD 31 January 2015)

Turnover
Auckland (NZ$)
Hamilton
Queenstown/Wharf
Adelaide (AU$)
Darwin (AU$)
Total Turnover (NZ$)

1H15
$m
3,335.6
2.7
89.5
758.2
437.4
4,726.6

1H14
$m
1,658.7
1.4
87.6
499.0
250.3
2,575.1

Movement
$m
%
1,676.9
101.1%
1.3
91.9%
1.9
2.2%
259.2
51.9%
187.1
74.8%
2,151.5
83.6%

2.0%

3,000
2,500
2,000

1,500

Win rate (%)

Turnover ($m)

1.5%

1.0%

1,000
0.5%

500
0.0%

Theoretical win rate (1.35%)

Jan-15 YTD win rate (1.5%)

• Adelaide and Darwin are shown in AUD. The totals in each section have Australian numbers converted at the relevant exchange rate each month
• Average NZD/AUD cross-rate during 1H15 0.9147 and 1H14 0.8820

23

 1H15 Update Consolidated International Business

 

 


 

Huckland 45.9 22.4 22.6 191.1% 1.35% 135%
Hamilton 9.9 9.9 9.9 91.9% 1.35% 1.35%
1.2 1.2 9.9 2.2% 1.35% 135%
Adelaide 19.3 6.3 3.5 51.9% 1.35% 1359,
Darwin 5.9 3.3 2.6 54.3% 1.35% 1.35%
Tat-a] Narmlised Revenue 63.3 34.3 29.11 33.6% 1.35% 1.35%
Reported 1:513 -
Tat-a] Heparted Revenue 49.3 32.9 16.4 49.3% 1.114% 1.23%


Tat-a] Narmlised EBITDA 14.5 6.2 3.3 133.9%

Tate! Nemmlised BITDA nmrgin 22.2% 12.3% 4.9%

Tate] Repel-Ted EBITDA 3.4 3.6 

24

1H15 Update – Normalised D&A, Interest, Tax and Other


Depreciation & Amortisation was up $5.0m due primarily to:
–

Recent capital investment in Auckland and Adelaide (resulting in an increase in Depreciation of $2.4m)

–

Increased amortisation of the Adelaide Casino licence value (resulting in an increase in Amortisation of $1.4m)



Expect 2H15 Depreciation & Amortisation to be similar to that in 1H15 ($43.2m)



Interest costs ($22.0m) and tax expense ($22.6m) were both stable relative to the pcp



Corporate costs were higher in 1H15 compared to the pcp mainly due to:



–

Increased sponsorship commitments

–

The reversal of employee incentive accruals in FY14

As separately indentified, branding project costs amounted to $2.1m for the period, which included the Adelaide
rebranding campaign ($1.1m) and the New Zealand campaign commenced in January 2015 ($1.0m)

25

  

January 2015 – Trading Update


January trading has seen a continuation of the momentum exhibited during 1H15. Strong Auckland and IB activity
have delivered normalised revenue for the month of $88.6m up 23.2% from $71.9m in the pcp. Reported revenue for
the month of $111.6m was up 63.9% from $68.1m in the pcp as a result of the strong win rate in IB



For the seven month period to 31 January 2015, group normalised revenue is up 11.1% and reported revenue up
13.8%, both vs. pcp



Auckland has continued to deliver good growth in January, with normalised revenues up 33.9% on pcp to $56.5m,
across all business segments. A favourable macro outlook for the next few months in Auckland with a large
pipeline of events, in addition to Chinese New Year celebrations starting in late February, should underpin
performance for the remainder of FY15



IB turnover and normalised revenues for January increased 112.4% to $925m and $12.5m, respectively



–

Year-to-date to 31 January 2015 turnover of $5.65 billion, up 87.7% on pcp

–

Actual win rate for the month of 3.84% resulting in a win rate of 1.50% for the seven months ended 31 January

Adelaide starting to show early signs of recovery after completion of the redevelopment, with normalised revenue
up 2.2% in January 2015 on pcp and margins lifting versus 1H15 with tighter cost controls and improved labour
scheduling

27

  

Interim Dividend of 10 cents per share
1H15

1H14

Movement

Dividend – NZ$

10.0 cps

10.0 cps

0.0cps

0.0%

Dividend – A$*

9.5 cps

9.3 cps

0.2cps

2.1%



The interim dividend of 10 cents per share is consistent with prior year



The dividend is calculated in accordance with the previously announced policy
–

Corresponds to a payout ratio of 88% of Normalised NPAT

–

Based on a share price of NZ$3.90, this represents an annualised cash dividend yield of 5.1%



The interim 1H15 dividend will be 25% franked in Australia and not imputed in New Zealand



The FY15 final dividend is proposed to be 25% imputed in New Zealand in order to reduce prepaid tax



The Dividend Reinvestment Plan will not be available for the 1H15 dividend given the ongoing negotiations with the
Crown over the NZICC funding



The payment date is 2 April 2015 (entitlement / record date 20 March 2015)

* For illustrative purposes, converting Interim Dividend cps to A$, 1H15 converted at the 9 th February 2015 rate of 0.9471 and 1H14 at 10th February 2014 rate of 0.9252

29

 I

. 51aam-



     

wan-nu.

 
 

    




NZICC – Update


Significant progress on NZICC achieved in 1H15:
–

Completed Preliminary Design after working closely with the Crown’s design team and submitted to the Crown for
approval in October 2014

–

Applied to Auckland Council for resource consent in December 2014 (currently under consideration)



We have worked closely with the Crown to achieve the objective of a landmark development for Auckland that will
generate significant economic benefits for the city and New Zealand



Also announced plans for an adjacent five star 300-room SKYCITY hotel and pedestrian laneway which is to be
developed separately



As announced in December 2014:



–

Early estimates of full cost of NZICC development have been revised to $470-530m depending on level of future
construction cost inflation

–

SKYCITY and the Crown are working constructively to address the funding of costs above SKYCITY’s $402m
contractual obligation

–

SKYCITY and the Crown have extended the date for formally approving Preliminary Design until the end of
February 2015

SKYCITY is committed to achieving a solution which preserves value for shareholders

32

  

Proposed Adelaide Expansion


SKYCITY initially outlined its high level concept plans for the Adelaide redevelopment in 2012 – comprising a casino
expansion, new signature food & beverage offerings and a boutique 6 Star hotel, with an indicative cost of A$350m



Having subsequently reached formal agreement with the SA Government and commenced under a new regulatory
and taxation framework in early 2014, SKYCITY has spent A$20m extending the exclusivity of its licence and A$50m
significantly redeveloping its existing facilities



SKYCITY remains committed to maximising the opportunity at the Adelaide Casino, consistent with our vision of
transforming the property into a world-class integrated casino entertainment complex and achieving a satisfactory
return for shareholders



SKYCITY is currently exploring a range of different expansion options, including additional ‘Horizon’ VIP villas and
suites and an expanded hotel, which would potentially increase the costs for the project over the indicative cost of
A$350m



SKYCITY and Walker Corporation are finalising terms for the lease for up to 1,000 car park spaces in the adjacent
Adelaide Festival Plaza development

34

   
 
 
 

?Qx

-

Capital Expenditure








Maintenance capital expenditure (“capex”) of $24.9m for 1H15
consistent with expectations – expect 2H15 to be similar to
that in 1H15
Project capex for 1H15 mainly related to Adelaide
redevelopment and NZICC projects
Other projects to be completed in FY15 include:

Capex Spend

1H15
$m

2H14
$m

1H14
$m

NZICC

5.4

17.8

5.6

Adelaide development

20.1

48.1

4.7

Other Projects

10.6

15.1

24.6

Total Project Capex

36.1

81.0

34.9

Maintenance Capex

24.9

22.4

29.8

–

Auckland Grand Hotel refurbishment (1-2 floors)

Total NZ$

61.0

103.4

64.7

–

Darwin Sports Bar, Sunset Restaurant and TITO installation

Depreciation &
Amortisation (1)

43.2

40.4

38.2

Once negotiations are completed with the Crown regarding
the NZICC funding we shall provide a further update on our
long-term capex outlook

(1) Normalised Depreciation and Amortisation

36

 Funding

(page 1 of 2)

Two upcoming debt maturities require refinancing:


–

$88.2m of USPP senior notes maturing in March 2015

–

$76.5m of NZ capital notes maturing in May 2015



Progressing funding initiatives which will facilitate refinancing, lock-in current low interest rates, extend the maturity
profile and maintain debt funding headroom of ~$300m



Credit approval received from existing banking syndicate to extend maturities of existing facilities but with lower
margins
–

Mix of 4, 5 and 6-year maturities approved

–

Expect to be fully documented by end of February 2015

–

Annualised pre-tax interest cost reduction of approximately $2m based on current utilisation of bank facilities



Also planning a NZ senior bond issue in advance of the maturing capital notes, and considering options for further
USPP issues



SKYCITY has no further debt maturities until March 2017 (when US$27m of USPP senior notes mature)

37

 Funding

(page 2 of 2)



SKYCITY is committed to maintaining its BBB- investment grade credit rating



SKYCITY is committed to its current dividend policy for the foreseeable future



Once negotiations are concluded with the Crown regarding the NZICC funding and the Adelaide expansion project is
fully developed, we will provide a further update on long-term funding. As noted, in the meantime, SKYCITY will
maintain its $300m of debt funding headroom

38

  



















 


-. 4r?

,3

Conclusion


Continued growth across our core businesses, underpinned by a strong performance in Auckland and our
International Business, delivering record activity levels, with good and sustained momentum into January



Significant progress made on the transformation of the Adelaide property. With the completion of the
redevelopment, the Adelaide Casino management team, led by Aaron Morrison, is now firmly focused on returning
the property to sustainable revenue and EBITDA growth



Significant progress achieved on the NZICC project during 1H15, and SKYCITY continues to have constructive
discussions with the Crown regarding funding the additional costs of the NZICC project



Management focus for the remainder of FY15:
–

Continue to optimise the operating performance of all business segments

–

Continue to actively manage the Adelaide transformation process

–

Achieve a solution with the Crown for funding the NZICC project which preserves value for shareholders

40

 



  

Six months en 
2014

1H15 Results Overview – Normalised Results
Normalised

1H15
$m

1H14
$m

$m

Normalised Revenue (including Gaming GST)
Gaming GST

510.0
(46.1)

467.0
(41.7)

43.0
(4.4)

9.2%
(10.6%)

463.9
(309.5)
154.4
(43.2)
111.2
(22.0)
89.2

425.3
(275.5)
149.8
(38.2)
111.6
(22.6)
89.0

38.6
(34.0)
4.6
(5.0)
(0.4)
0.6
0.2

9.1%
(12.3%)
3.1%
(13.1%)
(0.3%)
2.7%
0.2%

(22.6)

(22.6)

(0.0)

(0.0%)

66.6

66.4

0.2

0.3%

11.4 cps

11.5 cps

(0.1 cps)

(0.9%)

Normalised Revenue
Expenses
Normalised EBITDA
Depreciation and Amortisation
Normalised EBIT
Interest Cost
Normalised NPBT
Tax
Normalised NPAT
Normalised EPS

Movement

• Revenue (including Gaming GST) is shown above to facilitate Australasian comparisons
• Normalised NPAT adjusts for certain items and International Business (IB) at theoretical win rate of 1.35% versus actual 1.04% in 1H15 (1H14: 1.28%)
• Average NZD/AUD cross-rate during 1H15 0.9147 and 1H14 0.8820

%

42

 1H15 Results Overview – Reported Results
1H15
$m

1H14
$m

Reported Revenue (including Gaming GST)
Gaming GST
Reported Revenue
Expenses
Reported EBITDA
Depreciation and Amortisation
Reported EBIT
Interest Cost
Profit from disposal of Christchurch Casino
Reported NPBT
Tax
Reported NPAT

495.5
(44.0)
451.5
(310.7)
140.8
(43.2)
97.6
(24.9)
0.0
72.7
(18.1)
54.6

465.1
(41.6)
423.5
(279.9)
143.6
(39.2)
104.4
(24.2)
0.9
81.1
(20.0)
61.1

30.4
(2.4)
28.0
(30.8)
(2.8)
(4.0)
(6.8)
(0.7)
(0.9)
(8.4)
1.9
(6.5)

6.5%
(5.8%)
6.6%
(11.0%)
(1.9%)
(10.2%)
(6.5%)
(2.9%)
(100.%)
(10.4%)
9.5%
(10.6%)

Reported EPS

9.3 cps

10.6 cps

(1.3 cps)

(12.3%)

10.0 cps

10.0 cps

-

-

Reported

Interim Dividend NZ$ cps

Movement
$m

%

• Revenue (including Gaming GST) is shown above to facilitate Australasian comparisons

43

 1H15 EBIT Summary by Business Unit
1H14

$m

$m

$m

101.0
7.6
0.0

86.9
7.2
0.7

14.1
0.4
(0.7)

16.2%
5.6%
(100.0%)

108.6

94.8

13.8

14.6%

(A$)
(A$)
(A$)

6.4
15.4
21.8

14.2
14.9
29.1

(7.8)
0.5
(7.3)

(54.9%)
3.3%
(25.1%)

(NZ$)

24.7

32.8

(8.1)

(25.1%)

(19.3)
(2.1)
111.9

(16.0)
0.0
111.6

(3.3)
(2.1)
0.3

(20.6%)

(0.7)

-

111.2

111.6

(0.4)

(0.4%)

(2.5)
(11.1)

(4.6)
(2.6)

2.1
(8.5)

97.6

104.4

(6.8)

New Zealand Casinos
 Auckland
 Hamilton
 Queenstown, Other
Total New Zealand
Australian Casinos
 Adelaide
 Darwin
Total Australia
Total Australia at LY fx rate 0.8820
Corporate Costs
Branding Project Costs
Normalised EBIT at constant currency
Exchange rate impact at CY fx rate 0.9147
Normalised EBIT at actual currency
Adjustments (Note 1)
International Business adjustments (Note 1)
Reported EBIT at actual currency
• Normalised EBIT is adjusted for certain items and IB at theoretical
• Average NZD/AUD cross-rate during 1H15 0.9147 and 1H14 0.8820
Note 1: Adjustments are outlined on page 46

Movement

1H15

%

0.3%

(6.5%)

44

 SKYCITY Queenstown/Wharf 1H15 – Normalised
1H15
$m

1H14
$m

2.1
1.3
1.2
4.6
0.4
5.0
1.6
6.6
(0.7)
5.9
(4.4)
(1.0)
0.5
7.6%

2.0
1.6
1.2
4.8
0.5
5.3
1.4
6.7
(0.7)
6.0
(4.3)
(0.7)
1.0
14.9%

Movement
$m

%

Revenues
Machines
Tables – Local
Tables – IB (Normalised)
Normalised Gaming Revenue (incl GST)
Food and Beverage
Total Normalised Revenue (incl gaming GST)
Wharf Casino
Total Normalised Revenue (incl Wharf Casino)
Gaming GST
Total Normalised Revenue (excl gaming GST)
Expenses
Expenses – IB (Normalised)
Normalised EBITDA
Normalised EBITDA margin

•
•
•
•

Gaming revenue figures as shown on this page is gaming win (inclusive GST). This facilitates Australasian comparisons
Non-gaming revenue is net of GST
Total revenue as shown is gaming win plus non-gaming revenues
EBITDA margin is calculated as a % of gaming win (GST inclusive) plus non-gaming revenue - to facilitate Australasian

0.1
(0.3)
0.0
(0.2)
(0.1)
(0.3)
0.2
(0.1)
0.0
(0.1)
(0.1)
(0.3)
(0.5)

5.0%
(18.8%)
2.2%
(4.2%)
(20.0%)
(5.7%)
14.3%
(1.5%)
0.0%
(1.7%)
(2.3%)
42.9%
(50.0%)

45

 Reported and Normalised Earnings

Normalised

1H15
Revenue EBITDA
EBIT
$m
$m
$m
510.0
154.4
111.2

NPAT
$m
66.6

1H14
Revenue EBITDA
EBIT
$m
$m
$m
467.0
149.8
111.6

NPAT
$m
66.4

Adelaide redevelopment costs

-

(1.5)

(1.5)

(1.0)

-

(1.6)

(1.6)

(1.1)

NZICC interest and other costs

-

(0.3)

(0.3)

(2.3)

-

-

-

(1.1)

Strategic projects

-

-

-

-

-

(0.3)

(0.3)

(0.2)

Restructuring costs

-

(0.5)

(0.5)

(0.4)

-

(1.1)

(1.1)

(0.8)

Auckland project costs

-

(0.2)

(0.2)

(0.1)

-

(0.6)

(1.6)

(1.2)

510.0
(14.5)
495.5

(2.5)
151.9
(11.1)
140.8

(2.5)
108.7
(11.1)
97.6

(3.8)
62.8
(8.2)
54.6

467.0
(1.9)
465.1

(3.6)
146.2
(2.6)
143.6

(4.6)
107.0
(2.6)
104.4

1.0
(3.4)
63.0
(1.9)
61.1

Profit from sale of Christchurch
Total Adjustments
Adjusted
International Business at Theoretical
Reported

• Revenue includes GST inclusive gaming revenue and GST exclusive non-gaming revenue
• Normalised (underlying) earnings eliminates certain items and adjusts international VIP commission business win rate to theoretical

46

 Reported and Normalised Earnings


SKYCITY’s objective of producing normalised financial information is to provide data that is useful to the
investment community in understanding the underlying operations of the Group



Gaming Revenue figures reflect gaming win (inclusive of gaming GST). This facilitates Australasian comparisons
and is consistent with the treatment adopted by major Australian casinos



Non-gaming Revenues are net of GST



Total Revenues are gaming win plus Non-gaming Revenues



EBITDA margin is calculated as a % of gaming win (GST inclusive) plus Non-gaming Revenue – to facilitate
Australasian and period on period comparisons

47

 Reported and Normalised Earnings


Key Adjustments are:
– Adelaide redevelopment costs – Structural redundancies and launch costs for new facilities (Sean’s Kitchen, Black
Room)
– NZICC – Interest on purchase of New Zealand International Convention Centre (NZICC) land bank (calculated using
the Group’s average cost of debt of 6.7% on an average balance of $83m) and other costs specific to this project
– Strategic project costs - Brisbane, Gold Coast and other miscellaneous items
– Restructuring costs – Costs associated with changing the staffing structures under an approved restructuring plan

– Auckland project costs – Project, pre-opening and launch costs related to Auckland facilities such as the Federal
Street launch. 1H14 includes Sugar Club, Fed Deli, Masu and the new gaming rooms


IB win rate at 1.04% for 1H15 (1H14: 1.28%)



Normalisation adjustments have been calculated in a consistent manner in 1H15 and 1H14

48

 Impact of Currency Fluctuations
1H15 Constant
1H15 Actual
1H14 Actual
Currency

Movement
1H15 Constant Currency v
1H14 Actual

$m

$m

$m

$m

%

Normalised Revenue (incl Gaming GST)

510.0

516.6

467.0

49.6

10.6%

Normalised EBITDA

154.4

155.8

149.8

6.0

4.0%

Normalised EBIT

111.2

111.9

111.6

0.3

0.3%

Normalised NPAT

66.6

66.9

66.4

0.5

0.8%

Reported Revenue (incl Gaming GST)

495.5

502.2

465.1

37.1

8.0%

Reported EBITDA

140.8

142.4

143.6

(1.2)

(0.8%)

Reported EBIT

97.6

98.5

104.4

(5.9)

(5.7%)

Reported NPAT

54.6

55.0

61.1

(6.1)

(10.0%)

• Average NZD/AUD cross-rate during 1H15 0.9147 and 1H14 0.8820
• Constant currency translates 1H15 Australian dollar results to NZ dollars at 0.8820

49

 Disclaimer


All information included in this presentation is provided as at 11 February 2015



The presentation includes a number of forward-looking statements. Forward looking statements, by their nature,
involve inherent risks and uncertainties. Many of those risks and uncertainties are matters which are beyond
SKYCITY’s control and could cause actual results to differ from those predicted. Variations could either be materially
positive or materially negative



This presentation has not taken into account any particular investors investment objectives or other circumstances.
Investors are encouraged to make an independent assessment of SKYCITY

50

 APPENDIX 7 – NZSX Listing Rules

EMAIL: announce@nzx.com
Number of pages including this one
(Please provide any other relevant
details on additional pages)

Notice of event affecting securities
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10.
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer

SKYCITY Entertainment Group Limited

Name of officer authorised to
make this notice
Contact phone
number

Contact fax
number

(09) 363 6000
Bonus
Issue

Nature of event
Tick as appropriate

Authority for event,
e.g. Directors' resolution

Peter Treacy

If ticked,
state whether:

Rights Issue
non-renouncable

Capital
change

Call

(09)363 6140
/ Non Taxable

Taxable
Dividend

x

11

Date

Conversion

If ticked, state
Interim
whether:

x

Directors' resolution
2
Rights Issue
Renouncable

Interest

Full
Year

Special

2015

DRP Applies

If more than one security is affected by the event, use a separate form.

EXISTING securities affected by this
Description of the
class of securities

ISIN

Ordinary Shares

NZSKCE0001S2
If unknown, contact NZX

Details of securities issued pursuant to this event

If more than one class of security is to be issued, use a separate form for each class.

Description of the
class of securities

ISIN
If unknown, contact NZX

Number of Securities to
be issued following event

Minimum
Entitlement

Conversion, Maturity, Call
Payable or Exercise Date

Treatment of Fractions
Enter N/A if not
applicable

Tick if
pari passu

OR

Strike price per security for any issue in lieu or date
Strike Price available.

Monies Associated with Event

Ratio, e.g
1 for 2

for

provide an
explanation
of the
ranking

Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
In dollars and cents

Amount per security
(does not include any excluded income)

Source of
Payment

$0.1000

Profit

Excluded income per security
(only applicable to listed PIEs)
Supplementary
dividend
details NZSX Listing Rule 7.12.7

NZ Dollars

Currency

$58,747,274

Total monies

Taxation

$0.000000

Date Payable

2 April, 2015

Amount per Security in Dollars and cents to six decimal places

In the case of a taxable bonus
issue state strike price

Resident
Withholding Tax

$

Foreign
Withholding Tax

Timing

Amount per security
in dollars and cents

$0.033000

Imputation Credits
(Give details)

$0.000000

FWP Credits
(Give details)

$

(Refer Appendix 8 in the NZSX Listing Rules)

Record Date 5pm
For calculation of entitlements -

20 March, 2015

Notice Date
Entitlement letters, call notices,
conversion notices mailed

OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:
Cease Quoting Old Security 5pm:

Application Date
Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date. In the case
of applications this must be the
last business day of the week.
Allotment Date
For the issue of new securities.
Must be within 5 business days
of application closing date.

Security Code:
Security Code:

2 April, 2015

 SKYCITY Entertai nment Grou p Limited
lnterim financial report
for the six month period ended 31
December 2014

For and on behalf of the Board

t1 ) '/''u-*

Bruce Carter
Cha¡rman of the Audit and Financial Risk Committee

 I
pwc
Independent Reuíew Report
to the shareholders of SKYCITY Entertainment Group Limited

R.eport on the

Interítn Fíno;ncíø.l Statements

We have reviewed the accompanying ñnancial statements of SKYCITY Entertainment Group Limited
("the Group") on pages I to rS which comprise the consolidated balance sheet as at 3r December zor4,
and the consolidated income statement, the statement of comprehensive income, the statement of cash
flows and the consolidated statement of changes in equity for the period ended on that date, and a
summary of sþniñcant accounting policies and selected explanatory notes.

Dírecto¡s' ResponsíbíIítg þr the FíncrncÍal Statements

The Directors' of the Group are responsible for the preparation and fair presentation of these financial
statements in accordance with New Zealand Equivalent to International Accounting Standard 34
Interim Financial Reporting (NZ LAS 34) and for such internal controls as the Directors' determine are
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.

Our ResponsübdlÍty
Our responsibiliç'is to express a conclusion on the accompanying financial statements based on our
review. We conducted our review in accordance with the New Zealand Standard on Review
Engagements z4ro Reuiew of Financial Statements Performed by the Independent Auditor of the
Entity (NZ SRE z4ro). NZ SRE z4ro requires us to conclude whether anything has come to our
attention that causes us to believe that the financial statements, taken as a whole, are not prepared in
all material respects, in accordance with NZ IAS g4.As the auditors of the Group, NZ SRE z4ro
requires that we comply with the ethical requirements relevant to the audit of the annual financial
statements.
A review of financial statements in accordance with NZ SRE e4ro is a limited assurance engagement.
The auditor performs procedures, primarily consisting of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying anal¡ical and other review procedures.
The procedures performed in a review are substantially less than those performed in an audit
conducted in accordance with International Standards on Auditing (New Zealand) and International
Standards on Auditing. Accordingly we do not express an audit opinion on these financial statements.

Our firm carries out other services for the Group in the areas of accounting assistance, tax, and other
advisory serwices. Appropriate safeguards were applied to reduce the threats to independence from
the provision of other services to an acceptable level. The provision of these other services has not
impaired our independence as auditors of the Group.

PricewaterhouseCoopers, r88 Quay Street, Priuate Bag 9zt6z, Auckland tt4z, New kaland
g SSS 8ooo, F: +64 9 gSS 8oot, pwc.co.nz

T: +64

 pwe
Independent Reuíew Report
SIüCITY Entertainment Group Limited

ConclrrsÍon
Based on our review, nothing has come to our attention that causes us to believe that these financial
statements of the Group are not prepared, in all material respects, in accordance with NZ IAS g¿.

Restrictton on

Use

of Our Report

This report is made solely to the Group's shareholders, as a body. Our review work has been
undertaken so thatwe might state to the Group's shareholders those matters which we are required to
state to them in our review report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the Group's shareholders, as a body, for
our review procedures, for this report, or for the conclusion we have formed.

"r'

Chartered Accountânts
rr February zor5

R^C

Auckland

 SKYCITY Enterta¡nment Group L¡m¡ted
consol¡dated ¡ncome statement
For the six month per¡od ended 31 December 2014

Unaudited Unaud¡ted Audited
12 months
6 months
6 months
3l December 31 December 30June
2014
2013
2014
Notes 5'000
$'000
$'000
Total receipts incìud¡ng GST
Less non-gaming GST
Gaming win plus non-gaming revenue
Gaming GST
Revenue

4
4
4
4
A

Revenue
Other ¡ncome
Employee beneflts expense
Other expenses
Direct consumables
Gaming taxes and levies
lvlarket¡ng and communications

Directors'fees
Depreciation and amortisation expense
Restructuring costs
Gain on disposal of assoc¡ate
Finance costs - net

Profit before income tax
lncome tax expense

Profit for the period

Earn¡ngs per share for profit attr¡butable to the
shareholders of the company:
Basic earnings per share (cents)
D¡luted earn¡ngs per share (cents)

6
6
7

509,552
(14.832)
494,720
(44,0471 _
450,673

478,053
(13.54ô)
464,507
(41.648ì,
422,859

450,673

422,859

652
794
(152,337) (139,287)
(71,O2't\ (57,619)
(37,880) (33,e42)
(27,7111 (29,420)
(r8,s74)
(15,431)
(565)
(578)
(43,299) (39,157)
(2,517\

(3,643)

934
(24.899t (24.232\
72,651 81,149
(18,092) (20.088)
54.559 61.061

9.3
9.3

The above consolidated ¡ncome statement should be read ¡n conjunct¡on w¡th the accompany¡ng notes

10.6
10.4

928,224
(26,694)

901,534
(81.051)

820,483
820,483

I,000
(280,009)

(121,007)
(68,028)
(55,361)
(30,343)
(1,130)
(80,7ô9)
(9,170)

934
(48,049)
128,551

(30.014)

98,537

17 .O
17 .O

 SKYCITY Entertainment Group L¡mited
St3tement of comprehensive income
31 December 2014

Unaudited lJnâud¡ted Aud¡ted
12 months
6 months
6 months
3l Decêmber 31 December 30 June
2013
2014
2014
$'000
$'000
$'oo0
Profit for the per¡od

54,559

61,061

98,537

Other comprehens¡ve income
Items that may be reclass¡f¡ed subsequently to Prof¡t and
Loss
Exchange differences on translat¡on of overseas subsidiarìes 13
13
l\¡ovement in cash flow hedges
lncome tax relating to components of other comprehensive
income

(4,ss4) (24,116t
(2,2631 (1,455)

Other comprehens¡ve (expenses)/income for the period

638
(6.619)

465
(25,106)

Total comprehensive ¡ncome for the per¡od, net of tax

47.940

35,955

Q7.1O2)
(4,546)

1.375
(30,273)

68,264

fhe above consol¡dated statement of cÒmprehens¡ve income should be read ¡n conjunct¡on w¡th the accotnpany¡ng notes

 SKYCITY Enterta¡nment Group L¡m¡ted

Consolidated balance sheet
As at 3'l December 2014

lJnaudited Unaudited
31 December
2013
2014
$'000
$'000

3l December

Audited
30 June

2014
$'000

ASSETS

Current assets

54,052

20.575
A,492

23,188

a,249

18,810

7,871

39,729 38,694
6 s42
4.964
138.136 140.763

Derivative fÌnanc¡al ¡nstruments
Total current assets

Non-current âssets
Tax prepayment
Property, plant and equiPment
lntangible assets
Der¡vative financial instruments
Total non-current assets

68,038

60,428

Cash and bank balances
Receivables and ptepayments
lnventories
Tax prepayment

-

12,841

I

1,144,544 1,101,470
522,321 364,558
21.203
44.060
1.723.766 1.487 .231
1.861

Total assets

.902

1

,627.994

33.'158

769
114,66q

21,183
'l,141,947
537.648
15.889
1 .716.667
1

.831 .327

LIABILITIES

Current liabilities
Payables
Derivative fìnancial instruments
Sen¡or lnterest bearing liab¡l¡t¡es
Subordinated debt - caPital notes
Total current liabilÌties

Non-current liabil¡t¡es
Senior lnterest bearing liab¡lities
Subord¡nated debt - capital notes

I
11

9,10
11

Deferred tax l¡ab¡lities
Derivative fìnancial inskuments
Deferred licence value
Total non-current liabilit¡es

Total liab¡lities
Net assets
ÊQUITY
Share capital
Reserues
Retained proflts
Parent entity ¡nterest

Total equity

12
13(a)
13(b)

110,137
293
88,202

'1

103,701
140

19,500
10,753
81.724

76,447
275,079

103-841

288.418

538,753

554,496

498,935

-

76.441

76,434

81,248 77 ,273
31,144 25,424
151,689
802,834 733.627

75,71;
28,833
165.541

769.024

1.077.913
783.989

837.468
790,526

757,752
(55,1e5)
81.432
783.989

728,537
(43,409)
105.398
790,526

(48,576)
84.915
773.885

783,989

790,526

773,885

The above consolidated balanÇe sheets should be read ¡n coniunction w¡th the aÇcompanying notes

1

,O57

.442

773.885

737,546

 SKYCITY Enterta¡nment Group L¡m¡ted
Consol¡dated statement of changes ¡n equity
For the s¡x month per¡od ended 31 December 2014
Fore¡gn

Currency

Reserves Reserve Prof¡ts

$'000 $'000

$'000

Balance as at

1

$'000

$'000

July 2014
54,559

Total comprehensive income/(expense)
D¡v¡dends
Shares ¡ssued under d¡vidend re¡nvestment

14

plan

12

Share r¡ghts issued for employee services
Net movement in treasury shares value

12
12

Balance as at

Total
equity

Hedg¡ng Translation Reta¡ned

Share

capital

3l

47

,940

(58,042)

(58,042)

19,254
552

:

December 2014

Balânce as at 1 July 2013
(ee0)

Total comprehensive income/(expense)
Div¡dends

'14

Shares issued under d¡vidend reinvestment plan
Share rights issued for employee seruices
Net movement ¡n treasury shares valuê
Balance as at 31 December 2013

12
12
12

Div¡dends

14

Shares issued under d¡vidend reinvestment plan
Shâre rights issued for employee seruices
Net movement in treasury shares value
Balance as at 30 June 2014

12
12

(57,462)

35,955

(57,462)
'11,959

821

loq

,

Total comprehensive income/(expense)

The

-

7?o

Balance as at 1 July 2013

(24,116\ 61,06',r

r/5

5q5\

(3,171)

(12

7OA\

(27,102)

1O1

799

812 891

98,537

68,264

(115,421\ (115,421\
20,126
1,238

-

12

above consotidated statements of changes ¡n equ¡ty shoutd be read ¡n conjunction with the accompany¡ng notes

20,126
1 ,238

 SKYCITY Enterta¡nment Group Limited

Statement of cash flows

For the half year ended 31 December 2014

Unaud¡ted Unaudited Audited
12 months
6 months
6 months
3l December 31 December 30 June
2014
2013
20'l'4
$'000
$'000
Noles $'000
Cash flows from operat¡ng act¡v¡ties
Rece¡pts from customers
Payments to suppliers and employees

Dividends received
Gaming tâxes paid
Income taxes pa¡d
Net cash ¡nflow from operat¡ng act¡vities
Cash flows from ¡nvesting activ¡t¡es
Purchase of/proceeds from property, plant and equipmenl
Payments for intangible assets
Próceeds from sale of Christchurch Cas¡nos Limited
Net cash (outflow) from ¡nvest¡ng activ¡ties

cash flows from f¡nancing act¡v¡ties
Cash flows associated w¡th der¡vatives
New borrowings
Proceeds from sale of capital notes
Net ¡ssuei (purchase) of treâsury shares
Div¡dends paid to company shareholders
Interest pâid

Net cash (outflows) from financing activ¡t¡es
Net ¡ncrease ¡n cash and bank balances
Cash and bank balances at the beg¡nnìng of the period
Cash and cash equ¡valents at end of the period

18

-

423 ,6'.16
447 ,124
(294.55s) (251297L
152,569 166,319
875
(23,5141 (25,816)
(9,757) (13.796)
126.714
119.306

(57,320)
(s8,785)
(2,2161 (7,720)
(61.OOf) (65.040)

(223)
40,000
(13,638)
400
(38,788) (45,503)
(25,698ì (25.403)
(s1.929) (44,7ô7)
(2,s431
14,700

6,376
54.052
60.428 -.-

The above cash flow statements shoutd be read ¡n coniunction w¡th the accompany¡ng notes.

16,907
5L',131
68.038

820 ,259
(501.268\

318'991
(48,206)
(40,017)

230773

(156,164)
(11,899)

1.440
(166,623)

9,202
67,193
20,000
(13,213)
(95,2e5)
(49.116)

$1,229),
2,52',1

51,131

54,052

 SKYCITY Ënterta¡nment Group L¡m¡ted
Notes to the financial statements
3'l December 2014

I

General information

SKYCITY Entertainment Group Limíted (SKYCITY or the company and ¡ts subsid¡aries or the Group) operates in the
gam¡ng/entertainment, hotel and convention, hospitality, recreation, and tourism sectors. The Group has operations in New
Zealand and Austral¡a.
SKYCITY is a limited l¡ability company incorporated and domiciled in New Zealand. The address of its registered office
Federal House,86 Federal Street, Auckland. The company is dual listed on the New Zealand and Australian stock
exchanges.

¡s

The interim fìnanc¡al statements of the Group have been prepared in accordance with the requ¡rements of the Financial
RepoÍting Act 2013, the Compan¡es Act 1993 and the New Zealand Stock Exchange (NZX). SKYCITY Entertainment
Group Limited is registered under the Companies Act 1993 ãnd is an FMC Reporting Entity under the F¡nancial l.i]arkets

conduct Act 2013.
These consolidated financial statements have been approved for issue by the board of d¡rectors on 1 1 Fehruary 2014.

2

Summary of significant accounting policies

These general purpose fìnancial statements for the interim half year reporting period ended 31 December 2014 have been
prepared in accordance with generally accepted account¡ng practice in New Zealand, lnternat¡onal Accounting Standard 34
and NZ IAS 34 Interim Financial Reporting.
The preparation of interim fìnancial statements in accordance with NZ IAS 34 lnter¡m Financial Reporting requires
management to make judgements, estimates and assumptions that affect the application of policies and reported amounts
of assets and liabilities, income and expenses. The estimates and associated assumpt¡ons are based on historical
experÌence and var¡ous other factors that are believed to be reasonâble under the circumstances, the results of which form
the basis of mak¡ng the judgements about carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may d¡ffer from these estimates.
These financial statements have been prepared under the historical cost convention except for the revaluation of certain
financiâl instruments (including derivative instruments). The Group is des¡gnated as a profìt-oriented entity for financial
reporting purposes.
The Group has a negat¡ve working câpital balance as the capital notes and some ofthe USPP debt matures within the next
six months. The Group has s¡gnificant available undrawn committed banking facìl¡ties totalling $311 million as at 31
December 2014 (refer to note '10) and has the ab¡lity to fully pay all debts as they fall due.
The accounting policies that materially affect the measurement of the lncome Statement, Balance Sheet and the Statement
of Cash Flows have been applìed on a bas¡s cons¡stent with those used ¡n the audited fìnancial statements for the year
ended 30 June 2014 and the unaudited financial statements for the six months ended 3'1 December 2013.
These interim financiâl statements do not incfude all the notes of the type normally included in an annual financial report.
Accordingly, this report is to be read in conjunct¡on with the annual report for the year ended 30 June 2014.

(â) Changes in account¡ng policies
'fhere have been no sign¡fìcant changes in accounting policies durìng the current period.

3

Segment information

l\¡ânagement has determined the operating segments based on the reports reviewed by the Chief Êxecut¡ve
Officer/lvlânag¡ng Director that are used to make strategic decis¡ons.
The Group is organised into the follow¡ng main operating segments:
SKYCITY Auckland
SKYCITY Auckland includes casino operations, hotels and convention, food and beverage, carpark¡ng, Sky Tower, and â
number of other related act¡vit¡es.
Rest of New Zealand
Rest of New Zealand includes the Group's interest ìn SKYCITY Ham¡lton, SKYCITY Queenstown Casino (including The
Wharf) and Christchurch Casino (sold December 2012).

 SKYCITY Entertainment Group Limited
Notes to the f¡nancial statements
31 December 2014
(continued)

3

Segment information (continued)

SKYCITY Adela¡de
SKYcITY Adelaìde includes casino operations and food and beverage'
SKYCITY Dar'/v¡n

SKYcITY Darwin ¡ncludes casino operations, food and beverage and hotel
lntemat¡onal Bus¡ness
up of
lnternational Business ìncludes commiss¡on and compl¡mentary play. The international business segment is made
locations.
SKYCITY'S
generâted
all
of
at
is
The
revenue
of
ihe
world.rest
Asia,
and
the
customers sourced mainly from
Coryorate / Group
the Chief
Heád offlce functìons including legal and regulâtory, group fìnance, human resources and ¡nformat¡on technology'
Executive's offìce and directors.

SKYCI-rY RestofNew SKYCITY SKYCIry lnternatioñal Corporate /

Half year ended
31 December 2014

Auckland Zealanó Adelaide

$'ooo

$'o0o

$'ooo

DaMin Business Group
$'ooo $'000 $'000

Total
$'000

- 451 493
income 234j05 27 '626 77 '295 68'621 43'842
Êw^ôñcâe(121,837)(17,10ô)(65,895)(45'124)(40,440)(20'242)'(3'10'644)
'd:791\ Í 664\ ßl!?)
(2 82s\ ø3 2ss\
Q3'332\
- .=- (23071\
amortisation
õâäì""åi""
-iã356
97 550
¡¿02
te.zz¿
3,2¿o
""0
z3'lg
éèöment proriy(loss) (Earn¡ngs before tnterest ano Ta"¡
(24 899)
Finance costs - net
72 651
Profit before rncome tax

Revenue from exteÍnal customers and other

Less

SKYCITY RestofNew SKYCITY SKYCIÍY lnternational Corporate /

Half year ended
3l December 20'13

Auckland Zealand Adeiaide Darwin Bus¡ness

$'ooo

Revenue from external customers and other
Share of net profits of associâte

income

$'oo0

213 498

$'000

$'oo0

$'000

27,539 79,832 73,719

Group
$'000

Total
$'000
423,511
934

28,923

934

(4e'467) (25,31e) (16 e54) (279'e07)
(17
(110'124)
;;;"..."
'{22
'4ss) (60'544)
(:6is:491 -: _(5.007)
(2.536i
P,50o) ,G9,l5l)
16ei
õâ!ìåãåion
"no ".o,ti.rtion
Sé!mentprofiV(loss)(EarnìngsbeforelnterestandTax)__1Q53Ê1
Q4 232\
Fínance costs - net
81 149
Profrt before ¡ncome tax
SKYCITY RestofNew SKYCITY SKYCITY lnternational Corporate /

Year end ended

Auckland Zeâland Adelaide Darwin Buslness Group

30 June 2014

$'ooo $'ooo $'ooo $'ooo $'000 $'000

Revenue from external customers and other
Share ot net profits of

assoc¡ate

ffin"",

amortisation
Finance costs

income

Depreciation and
ééiment profiy(foss) (Earnings before lnterest and tax)
Profrt before income tax

430,519 53'949 150,504 130'704 55'807
g34
(226'366) (3! 1?6) (118'465) !99?991 (58'083) (36'410)

269i l11,5OS) (1,314,2.5) ^- '^
266-l ¿.188 2O.S¡t ZO.98t (2220)

---l(44,898i
Sõ

(5

Total
$'000
821 483
934

(565'048)

6ô9) (80 769)
142 079) 176600
--fg$
(5

 SKYCITY Enterta¡nment Group Lim¡ted
Notes to the f¡nanc¡al statements
31 December 2014
(continued)

4

Revenue
6

months

3'l December

2014
$'000

months 12 months
December 30 June
2013
2014
$'000
$'000

6
3'1

Total receipts ¡ncluding GST
Less non-gaming GST
Gaming win plus non-gaming revenue
Less gaming GST
Total revenue

509,552
(14.832)
494,720
(M.O47t
450.673

478,053
(13,54ô)
464,507
(41,648\
422.859

Gaming
Non-gâming
Total revenue

342,793
107.880
450.673

323,205
99,654
422,859

928,228
(26.694)

901,534
(81 .051)

820.483
626,339
194.144
820.483

Included w¡thin gaming revenue is revenue relating to loyalty action points of $653,000 (31 December 2013: $ô97,000, 30
June 20'14: $1,342,000).
lncluded with¡n non-gaming revenue is revenue relating to loyalty action points of $279,000 (31 December 2013Ì 9265,000
30 June 2014: $728,000).
Gaming win represents lhe gross cash inflows associated with gam¡ng activities. "Totâl receipts including GST" and
"Gaming win plus non gam¡ng revenue" do not represent revenue as defined by NZ IAS 18 "Revenue". The Group has
decided to d¡sclose these amôunts as they give shareholders and interested parties a better appreciation for the scope of
the Group's gaming activities and is consistent with ¡ndustry practice adopted by casino operations in Australia.

5

Other income
6

months 6 months 12 months
31 December 30 June
2014
2013
2014
$'000
s'000
$'000

3l Decembèr

Net ga¡n on d¡sposal of property, plant ând equ¡pment
Dividend income

786
475
794

645
652

__

995
1

,000

 SKYcITY Enterta¡nment Group Limited
Notes to the f¡nanc¡al statements

3l

December 2014
(continued)

6

Expenses

months
2014
$'000

months
2013
$'000

12 months
6
6
31 December 31 December 30 June

2014
$'000

Prof¡t before ¡ncome tax ¡ncludes the follow¡ng specific expenses:
Depreciation

13,641
19,450

BuÌldings
Plant and equipment
Furniture and fittings
l\¡otor vehicles
Total depreciation

Amod¡sation
Casino licence (Adela¡de)
Software
Total amortisat¡on

Total depreciat¡on and amort¡sation

Utilities, insurance and rates
Communìty Trust donations
Operating leases payments
Other property expenses
Other items (including lnternational commissions)
Provision for bad and doubtfuldebts

Redundancy and other staff payments
Adelaide Redevelopment costs
Strategic projects and development costs
Auckland project costs

7

24,421
37,915
9,516
403
72.255

12,887
18,673

4,894
232
3A,217

4,026
206
35.792

2,230
2.852
5.082

1,186
2,179
3,365

43.299

39,157

'11,423

11,664

1,494

1

2,357
7,139

2,221

3,115
5,399

8,514

___10_209.
23,002
2,635

,318

7.346

4,382

47,938
670
71.021

35,021
49
57 .619

500
1,468
370
179
2,5'l.7 _

1,113
,588
354
588
3,643
1

14.035

75,944
1.009
121 .OO7

2,303
4,262
1,373
1.232
9.170

Finance costs - net
6

31

months
20'14
$'000

6

months
2013
$'000

12 months

December 31 December 30June
2014
$'000

Fínance costs - net
Interest and fìnance charges
Êxchange (gaÌns)/losses

lnterest lncome
Total finance costs - net

26,224

í40)

(1.185)
24,A99

24,785
192

(745)
24.232

50,130

(125)
(1,956)

48,049

 SKYCITY Entertainment Group Limited
Notes to the financ¡al statements
31 December 2014
(continued)

I

Derivatives

The Group carries der¡vatives at fair value, all other financial ¡nstruments are carr¡ed at amortised cost.
All der¡vat¡ves are fair valued using inputs other than quoted prices that are observable (level 2).
The fair value of financial instruments thât are not traded in an active market (for example, over the counter derivatives) is
determined by using valuation techn¡ques. These valuatìon techniques max¡m¡se the use of observable market data where
it is available and rely as little as poss¡ble on ent¡ty specifìc estimates. lf all sign¡flcant inputs requ¡red to fair value an
¡nstrument are observable, the ¡nstrument ¡s included in level 2.
SpecifÌc valuation techniques used to value financ¡al instruments include:

-

The fair value of ¡nterest rate swaps is calculated as the present value of the est¡mated future cash flows based on
obseÍvable yield and cred¡t default swap curves.
- The fair value of forward fore¡gn exchange contracts is determ¡ned using forward exchânge râtes ât the balance sheet
date, with the result¡ng value d¡scounted back to present value
- Other techniques, such as discounted cash flow analyses, are used to determine fa¡r value for the remain¡ng financìal
instruments.

9

Current liabilitÍes - Senior interest bearing liabilities
31

lJnsecured
Un¡ted States Pr¡vâte Placement (USPP)
Total current interest bear¡ng borrowings
Refer note 10 (Non-current liabil¡t¡es) for details of the USPP

December 31 December

2014
$'000

2013
$'000

_______ccð¿
48,202

30 June

2014
$'000

a1.724
81

,724

 SKYCITY Enterta¡nment Group L¡mited
Notes to the f¡nanc¡al statements
31 December 2014
(continued)

10 Non-current

l¡abilities - Senior ¡nterest bearing liabilities
31

Unsecured

2014
$'000

31

December

2013
$'000

279,142

US Private Placement
Synd¡cated bank facility
Deferred fund¡ng expenses
Totâl unsecured non-current interest bearing borrowings

(a)

December

261,387

(1.776)
538,753

30 June

2014
$'000

352,881
203,398

(1,783)
554.496 _

251 ,300

249,673
(2,038)

498,935

Un¡ted States Pr¡vate Placement (USPP)

USPP non-current debt maturies between March 2017 and March 202'l
l\ilaturities of US$47,OOO,O0O and NZ$28,169,000 in March 2015 âre recognised as curtent liabilities

The USpp fixed rate US dollar borrowings have been converted to New Zealand and Australian dollar floating rate
dollâr within the
borrow¡ngs by use of cross-currency interest rate swaps to el¡minate foreign exchange exposure to the US
lncome Statement.
The movement in the usPP amount from 30 June 2014 relates to foreign exchange movements.

(b)

Synd¡cated bank fac¡l¡tY
RevolvÌng credil
Revolving credit
Revolv¡ng credÌt
Term Loan

Amount

l\¡aturitv

A$200m
NZ$200m
NZ$85m

February 2019
October 2018
N¡arch 2020

A$75m

March 2020

(New
The synd¡cated bank fâcility is on an unsecured negative pledge basis. The syndicate of bânks is comprised ofANZ
Westpac
Bank
and
Australia
National
Zealand,
of
New
Bank
of
Auìtralia,
Zealañd and Australia), Commonwealth Bank
(New Zealand ând Australia).

(c)

Fa¡r value

value of NZ$367
Fair value of long term fìxed rate USPP debt ¡s est¡mated at NZ$409 million compared to a carry¡ng
flows, using market
cash
principal
and
interest
present
of
future
value
on
the
based
been
calculated
valué
has
million. Fair
¡nterest rates and credit margins at balance date.
The carrying value of floating rate debt approximates ìts fair value.
(that is, as
Fâir value ¡s calculated using inputs other than quoted prices thal are observâble for the liab¡lity, either directly
pr¡ces) or ind¡recfly (that is, derived from prices). Th¡s is a level 2 valuation as defined in note 8.

11

Subordinated debt - Capital Notes

Capital notes are â current tiabitity as at 30 June 2014 and 3'l December 2014 and were a non-current liability as at
Deðember2013. The capitat notes next election dale (atwhich t¡me SKYCITY may redeem) ìs 15 May2015.

per$1
The capital notes are listed on the NZX As at31 December 2O'14 the closìng price was $1.016
cost.
notes are carried at amortised
The total fair value is $78m, and is a level 1 valuation, as they are l¡sted on the NZX

note.

3.1

The capital

 SKYCITY Enterta¡nment Group L¡m¡ted
Notes to the f¡nanc¡al statements
31 December 2014
(continued)

12 Share

capital

3't
20'14
Shares

December

Opening balance of ordinary shares
issued

31

December

2013
Shares

582,088,094 576,958,340

30
June
2014
Shares

31
2014
$'000

December

576,958,340

2014
$'000

..:

729,3S5

821.

1238

400 (13,638)

(13,213)

5.384.647 3.058.33ô 5.129.754 19,254 11,959
757,752 728.537

737.546

67,799 768,382
(67,799) (768,382)

746,714

(746,714'

value
Shares issued under div¡dend
reinvestment plan

2013
$'000

737,546 729,395

Share r¡ghts issued for employee
serv¡ces
Employee share entitlements ¡ssued
Treasury shares issued
Net movement in treasury shares

30
June

31

December

587,472,741 580.016.676 582,088,094

20.',126

lncluded within the number of shares are treasury shâres of 6,708,778 (31 December 2013 . 6,776,577 and 30 June 2014:
6,776,574\ held by the compâny. The movement in treasury shâres durìng the period related to the purchase of shares by
an external trustee as part of the executive long term incentive plan. Treasury shares may be used to issue shâres under
the company's employee incentive plan or upon the exercise of share r¡ghts/options.

13 Reserves and retained

profits
6

31

months
2014

6

$'ooo

(a)

months
2013

12 months

December 31 December 30June

$'ooo

2014
$'ooo

Reserves

Hedging reserve - cash flow hedges
Foreign currency translation reserve

(

10,391 )

(6,585)

(44.804)
(55.195)

(36.824)
(43,409)_ _

(8,766)
29,952

(5,595)
(12,468)

(8,766)
(39.810)
(48.576)

Hedging reserve " cash flow hedges
Balance at the beginning of the period
Revaluation (note 8)
Transfer to net prof¡t
Deferred tax
Balance 31 December

(32,21s)

638
(10.391)

11,013

465
(ô.585)

(5,5e5)

(40,294)
35,748

1.375
(8,766)

Fore¡gn currency translat¡on reserve
Balance at the beginning of the perìod
Êxchange differences on translat¡on of overseas subsidiaries
Balance 31 December

(i)

(3s,8r0) (12,708) (12,708)
(24,116\ (27.102\
(4.994t ,
(44,8041
(36,824) _*_- (39,810)

Hedgíng reseNe - cash flow hedges

The hedging reserve is used to record gains or fosses on a hedging instrument in a cash flow hedge that are recognised
directly in equity. Amounts are recognised in profit and loss when the associâted hedged transaction affects prof¡t ând
loss.

 SKYCITY Enterta¡nment Group L¡mited
Notes to the financial statêments
31 December 2014
(continued)

l3 Reserves and retained profits (continued)
(ii) Foreígn currency translation reseNe
Êxchange differences ar¡s¡ng on translatìon of the fore¡gn operations are taken to the fore¡gn currency translation reserve.
The reserve is recogn¡sed in profìt and loss when the net investment is disposed of.

(b)

Reta¡ned profit

Movements in retained proflt were as follows:

3l December

2014
$'000

31

84,915
54,559
(58,0421
81.432

Balance at the beginning of the period
Profit attr¡butable to shareholders of the company
Div¡dends
Balance at the end of the per¡od

December

2013
$'000

101,799

61,061
(57.462\
105.398

30 June

2014
s'000
101 ,799

98,537
(115.421\
84,915

l4 Dividends
3l December

2014
$'000

Prior year's fìnal div¡dend
lnter¡m div¡dend
Total d¡v¡dends provided for or paid

31

December
2013
$'000

54,042

57,462

58.042

57.462

30 June

2014
$'000

57,462
57.959
115.421

Subsequent to balance date the Board of Directors has resolved to pay a 25Vo fÊnked interim d¡v¡dend of 10 cents per
share.

Cents per share
Prior year's final distr¡but¡on/dividend
lnterim d¡stribution/d¡vidend

r0.00É

-13-

10.00ø

10.00é
10.00ø

 SKYCITY Enterta¡nment Group L¡m¡ted
Notes to the f¡nanc¡al statements
3l December 2014
(continued)

l5 Contingencies
There are no sÌgn¡ficant contingent liabilíties or assets (3'l December 201 3 and 30 J une 2014: none).

16

Gomm¡tments

(a)

Cap¡tal comm¡tments

Cap¡tal expend¡ture contracted for at the reporting date but not recognised as liabilities is as follows:

31 Decêmber
2014

31

$'000
Property, plânt ând equ¡pment

(b)

Operat¡ng lease comm¡tments

Comm¡tments for minimum lease payments ¡n relat¡on to non-cancellable
operat¡ng leases are payable as follows:
W¡thin one year
Later than one yeâr but not later than five years
Later than five years

6,861
16,873

2013
$'000

30 June

2014
$'000

19,382

16,345

31 December
2014
$'000

December

3'1

December

2013
$'000

17 ,O84

30 June

2014
$'000

6,436

5,56 f

13,850

15,813

293.396 296,396
317.130 316,682

293.627
315,001

 SKYCITY Enterta¡nment Group L¡mited
Notes to the financ¡al statements
31 December 20'14
(continued)

17 Events

occurring after the balance date

D¡vidend
On 11 February 2015, the directors resolved to provide for an interim dividend to be paid in respect ofthe six months
ended 31. December 2914: fhe partially (25%) franked, unimputed dividend ofl0cents per shâre (total payment g5g.7m)
will be paid on 2 Apr¡l 2015 to all shareholders on the compâny's register at the close of business on 20 N,iarch 201S.

18

Reconciliation of prof¡t after income tax to net cash ¡nflow from operating activities
6

31

Profit for the per¡od
Depreciation and amortisation
Finance costs net
Current period employee share entitlement
Net (gain) on sale of associates
Gain on sale of property, plant and equipment
Change in operating assets and liâbìlit¡es
(lncrease)/decrease in receivables and prepayments
(lncrease) in inventories
(Decrease)/increase ¡n payables and accruals
lncrease/(decrease) in deferred tax l¡ability
Decrease in net tax receivâble
Capital ¡tems included in working capital movements
Net cash inflow from operating activit¡es

months
2014
$'000

months
2013
$'000

54,559

6'1 ,061

43,299

39,157
24,232
821
(e34)
(645)

24,899

552
(786)
(4,378)
(378)
(e,363)

5,533
1,771

3.598
1.t9.306

-15

6

December 31 December

757
(1,076)
(1,698)
(10,330)
16,157
(788)
126.714

12 months

30 June

2014
$,000

98,537
80,769
48,049
1,238
(e34)
(ee5)
1,081

(455)

14,102
(11,888)
510
759
230.773

 J"'.
'KYCITY

ENTERTAIN/v\ENT ¿ROUP
SKYCITY Enterta¡nment croup L¡m¡ted
Federal House 86 Federal Street
PO Box

6443 Wellesley Street

Auckland New Zeðland

11 February 2Ot5

Telephone +64 (0)9 363 614r
Facsirn¡le +64 (0)9 363 6r40

Company Announcements Office
ASX Market Announcements
Exchange Centre
Level 6
20 Bridge Street
Sydney NSW 2000
AUSTRALIA

www. skycityqroup. co. nz

Dear Sir/Madam

Re:

SKYCITY Entertainment Group Limited (SKC)
Listing Rule 4.24.2 - Details of Directors and Directors' Declaration in
Respect of the Half Year Financial Statements and Notes

This announcement is made pursuant to ASX Listing Rule 4.24.2 and relates to, and
should be read in conjunction with, the company's announcement of its result for the
six months to 31 December 2014 dated 11 February 2015.
The directors of SKYCITY Entertainment Group Limited, at any time during or since the
end of the half year ended 31 December 2014, were:
Mr Chris Moller
Mr Bruce Carter
Mr Nigel Morrison
Mr Richard Tsiang
Mr Peter Cullinane
Mr Richard Didsbury
Mr Brent Harman
Mr Rod McGeoch
Ms Sue Suckling

Chairman
Deputy Chairman
Managing Director
Director (appointed 17 December 2074)
Director
Director
Director
Director (retired 16 October 2074)
Director

Each of Mr Harman and Ms Suckling retired from the board by rotation at the
company's 2014 Annual Meeting on 17 October 2OI4, but were both re-elected by
shareholders at that Annual Meeting.

Attached is a declaration

on behalf of the directors of the company in respect of the
company's half year financial statements and notes for the six months to 31 December
20L4.

Yours faithfully

)
P A Treacy

General Counsel & Company Secretary
SKYCITY Entertainment Group L¡mited

Federal House 86 Federal Street PO Box 6443 Wellesley Street Auckland New Zealand
Telephone +64 (0)9 363 6141 Facsimile +64 (0)9 363 6140 www.skycitygroup.co.nz

 SKYCITY ENTERTAINMENT GROUP LIMITED
("Com pa ny")

Directors' Declarat¡on in respect of the Group F¡nanc¡al Statements
for the half year ended 31 December 2014

Introduct¡on

It

is a requirement oF the Austral¡an stock Exchange Listing Rules that a declaration be
given by the directors of the Company in respect of the t¡nanc¡al statements for the
Company and its subsidiaries and associates ("SKYCITY") for the half year ended 31
December 2014. This declaration must be filed with the Australian Stock Exchange.

Declaration
The directors of the Company hereby declare that, ¡n the directors, opinion:

.

the SKYCIry financial statements tor the half year ended 31 December 2O!4 and
the notes to those financial statements comply with the account¡ng standards
issued by the External Report¡ng Board of New Zealand;

.

the SKYCITY financial statements for the half year ended 31 December 2OI4 and
the notes to those financial statements give a true and fairview of the financial
position and performance of the Company; and

.

there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors dated 11
February 2015 and is signed for and on behalf of the board of directors by the board
cha irma n.

S¡g

ned

J D Moller
Cha irma n
C

11 February 2015

 MEDIA RELEASE
11 February 2015
SKYCITY Entertainment Group Limited
Interim Results for six months to 31 December 2014
Result Highlights:


Normalised revenue up 9.2% to $510.0 million, normalised EBITDA up 3.1% to
$154.4 million and normalised NPAT up 0.3% to $66.6 million



Continued strong growth in Auckland across all business segments, with
normalised revenue up 17.2% and normalised EBITDA up 15.0%



Strong growth in group-wide International Business with turnover and normalised
revenues up 83.6% and normalised EBITDA up 133.9%



Return to revenue and EBITDA growth in Hamilton



Redevelopment of existing Adelaide Casino now complete, but as foreshadowed
performance significantly impacted by disruption



EBITDA growth achieved in Darwin despite challenging local market



Momentum of 1H15 continues into January 2015, with group normalised revenues
up 23.2% and International Business actual win rate back above theoretical



Interim dividend maintained at 10 cents per share

SKYCITY Entertainment Group Limited (NZX:SKC) today announced its interim
results for the six months ended 31 December 2014.
Normalised revenue (including gaming GST) was up 9.2% to $510.0 million and
normalised EBITDA up 3.1% to $154.4 million. Normalised Net Profit After Tax
(NPAT) of $66.6 million was up marginally on the previous corresponding period.
Reported NPAT for the half year was $54.6 million, down 10.6% on the previous
corresponding period, primarily due to the below theoretical win rate in the
International Business over the period of 1.04%. After a strong January 2015, the
actual group-wide IB win rate is now above theoretical at 1.50%.
SKYCITY Chief Executive Nigel Morrison says that the interim results for FY15 are
pleasing, with strong momentum in the Group’s core businesses.
“We have continued to achieve strong growth in our Auckland and International
Business. This reflects the investment in both businesses over the past few years,
and it is exciting to see the returns now being achieved. We have also returned
Hamilton to growth and continued to achieve EBITDA growth in Darwin, despite the
challenging local market in the Northern Territory.
“Auckland continued the momentum of 2H14 and delivered strong growth across
gaming and non-gaming businesses. The ongoing success of SKYCITY’s widelylauded restaurants on Federal Street, high average occupancies in our SKYCITY Hotel
and Grand Hotel and significant growth in Sky Tower visitation and Convention
Centre bookings have contributed to Auckland’s pleasing results.

 “As was foreshadowed at our Annual Meeting in October 2014, the disruption to
trading from the redevelopment of the Adelaide Casino over this period has been
significant, with normalised Adelaide EBITDA down 27.4%. As a result, EBITDA
growth across the Group has been curtailed over this period. The A$50 million
redevelopment of the Adelaide Casino was finally completed with the opening of
Madame Hanoi, and Adelaide management are now firmly focused on returning the
property to growth.”
Depreciation and amortisation was up $5.0 million on a normalised basis due
primarily to higher depreciation on recent capital investment in Auckland and
Adelaide, and increased amortisation of the Adelaide Casino licence value. Corporate
costs were also higher in the interim period due mainly to the reversal of executive
incentive accruals in FY14, increased sponsorship commitments and the cost of the
branding campaign in New Zealand. Interest costs and tax expense were both stable
relative to the previous comparable period.
International Business
SKYCITY’s International Business delivered record activity during the interim period,
with turnover across all properties nearly doubling to $4.7 billion and normalised
EBITDA up 133.9% to $14.5 million.
Growth in International Business turnover was underpinned by the success of an
expanded sales and marketing team, increased recognition of the Group’s Horizon
brand and offering, higher table differential levels introduced in FY14, a strong focus
on direct relationships with the Group’s VIP customers and continued growth in the
number of Asian VIP customers visiting New Zealand.
Mr Morrison says SKYCITY is really starting to see the benefits of its significant
investment in the Horizon product across the Group.
“There is potential for further significant growth in the International Business and
hence SKYCITY will continue to invest prudently to provide better VIP customer
experiences and also achieve attractive returns,” he says.
The average actual win for the interim period was 1.04% versus the theoretical win
rate of 1.35%. However, a strong performance from the International Business in
January has resulted in the average year-to-date win rate increasing back above
theoretical to 1.50% as at 31 January 2015.
Auckland
SKYCITY Auckland, the Group’s largest property, was again the standout performer,
with normalised revenues rising 17.2% to $302.5 million and normalised EBITDA up
15.0% to $124.3 million over the period. This significant growth continues the
positive momentum exhibited during 2H14, and means that Auckland has now
delivered four consecutive quarters of EBITDA growth.
Revenue and EBITDA growth was achieved across all business activities. Notable
improvements were achieved in the gaming business, driven by the continued appeal
of the VIP rooms, including the new Baccarat and Black rooms, loyalty programmes
and marketing initiatives.
In addition, the revitalised Federal Street precinct and both SKYCITY Auckland hotels
continued to be very popular and reflected the benefits of being able to offer worldclass integrated casino and entertainment facilities to local and international
customers.

2

 Mr Morrison says it is pleasing to see SKYCITY Auckland now starting to see the
benefit and returns on the significant investment it has made in the facilities at
Auckland over the past few years.
“The strong growth in Auckland is a direct result of continued good management,
value-adding investment and positive external factors which remain supportive of our
underlying business.
“Auckland continues to be an economic powerhouse, with the city recently achieving
an annualised figure of two million visitors for the first time. Auckland is also
benefitting from a substantial increase in major events such as the ASB Classic,
Heineken Open, Auckland NRL Nines, Cricket World Cup, FIFA Under-20 World Cup
and large music concerts. These appeal to both local residents and tourists and are
hugely beneficial for the local economy and local businesses,” he says.
Hamilton
SKYCITY Hamilton returned to revenue and EBITDA growth in the interim period,
with a strong second quarter. Normalised revenue was up 1.2% to $25.2 million and
normalised EBITDA increased 6.5% to $9.8 million.
The improved performance achieved at SKYCITY’s Hamilton property was
underpinned by 6.3% growth in gaming machine revenues, and also benefitted from
a revitalised marketing and loyalty programme, the success of new VIP gaming
spaces and a strong focus on cost management.
SKYCITY Hamilton is well placed to benefit from the Hamilton City Council’s River
Plan Project, given the property’s ideal location and proximity to the planned tourism
infrastructure investment.
Queenstown
The combined performance of SKYCITY Queenstown and SKYCITY Wharf was
disappointing. Normalised revenues were down 1.5% to $6.6 million and normalised
EBITDA was down $0.5 million to $0.5 million.
The focus for Queenstown moving forward remains on growing International Business
in this world-renowned tourist location.
Adelaide
As previously advised the Adelaide Casino was significantly impacted by the
disruption of the redevelopment works. Normalised revenue increased 4.7% to
A$73.1 million but normalised EBITDA (before branding project costs) declined
27.4% to A$13.5 million.
The decline in EBITDA margins was primarily due to reduced visitation during the
disruption, higher costs associated with the launch of new gaming and food and
beverage facilities, increased marketing spend during the redevelopment phase, and
relatively high fixed labour costs over the period.
The A$50 million redevelopment of the existing Adelaide Casino has now been
completed and the previous disruption has come to an end. The revitalised property
now offers a significantly improved main gaming floor experience for customers, new
cashless gaming technology and two signature restaurants – Sean Connolly’s Sean’s
Kitchen and Madame Hanoi, with Nic Watt. Adelaide Casino also has outstanding
new premium and VIP gaming facilities that will enable the property to compete with
its regional peers for the first time.

3

 Mr Morrison says the Adelaide Casino management team is now firmly focused on
returning the property to sustainable growth heading in to 2H15.
“SKYCITY remains committed to transforming the Adelaide Casino into a world-class
integrated casino and entertainment destination. We continue to develop plans for
the broader expansion of the Adelaide Casino and look forward, as an essential first
step, to reaching agreement with Walker Corporation, in the near term, on the lease
of up to 1,000 car parks in the adjacent Festival Plaza development,” says Mr
Morrison.
Darwin
SKYCITY Darwin achieved EBITDA growth over the interim period despite modest
revenue growth, Australian economic headwinds and a challenging local market.
Normalised revenue was up 2.8% to A$56.0 million and normalised EBITDA
increased 2.9% to A$21.6 million.
The performance was primarily driven by robust growth in local table games,
significant growth in International Business turnover and a strong focus on cost and
subsidy management.
While SKYCITY Darwin is facing increased competition from the local pubs and clubs
due to recent regulatory changes, the outlook for the property remains positive.
SKYCITY Darwin is an increasingly attractive destination for Asian VIP customers and
further investments are also being made in the new ‘Aces’ Sports Bar, the soft
refurbishment of the main gaming floor and the redevelopment of the Sunset
Restaurant.
January 2015 Trading Update
January trading has seen a continuation of the momentum exhibited during 1H15.
Revenue and EBITDA growth was achieved in all properties, with strong
performances from Auckland and International Business.
Auckland continued its strong growth across all business activities, with normalised
revenues up 33.9% to $56.5 million. With the construction now at an end at
Adelaide Casino, the property is starting to show early signs of recovery with
normalised revenue up 2.2% on the previous corresponding period and margins
lifting relative to 1H15. International Business delivered turnover during the month
of $925 million at win rates well above theoretical.
Mr Morrison says that the outlook for SKYCITY remains positive. In particular, the
macroeconomic outlook in Auckland continues to be favourable with a large pipeline
of major events and Chinese New Year celebrations starting in late February.
NZICC
Mr Morrison noted that SKYCITY continues to work closely with the New Zealand
Government on the New Zealand International Convention Centre to build a
landmark development for Auckland that will generate significant economic benefits
for the city and for New Zealand.
“Constructive discussions with the Crown regarding funding the additional costs of
the NZICC project over and above SKYCITY’s contractual obligation of $402 million
are continuing. SKYCITY remains focussed on building, developing and operating the
NZICC and we are committed to achieving a solution that preserves value for our
shareholders and allows us to move forward with this much needed facility,” Mr
Morrison says.

4

 Debt Funding
SKYCITY is progressing various funding initiatives to refinance the upcoming maturity
of $88.2 million of US Private Placement senior notes in March 2015 and $76.5
million of capital notes in May 2015.
SKYCITY has already received credit approval to extend the term of its bank facilities,
and has achieved significant future interest savings in the process.
Plans to
undertake a New Zealand issue of senior bonds prior to the maturity of the existing
SKYCITY capital notes are also well advanced.
These funding initiatives will also lock-in current interest rates, extend the debt
maturity profile and maintain SKYCITY’s current debt funding headroom of
approximately $300 million.
Dividend
SKYCITY announced an interim dividend of 10 cents per share, which is payable on 2
April 2015. The dividend will be 25% franked in Australia but not imputed in New
Zealand.
The Dividend Reinvestment Plan will not be available for this interim dividend given
the ongoing negotiations with the Crown on the NZICC funding.
Mr Morrison also confirmed that SKYCITY is committed to its existing dividend policy
for the foreseeable future. “We believe this dividend policy offers our shareholders
an attractive yield and is sustainable going forward,” he says.
ENDS
Notes to editors:


For the full interim results for 1H15 or to view CEO Nigel Morrison’s presentation,
please visit this link: http://stagingconnections.org/fy15-interim-result.



All numbers in this media release are unaudited.



Further information on adjustments between normalised and reported information
is available in SKYCITY’s investor presentation at:
http://ir.skycityentertainmentgroup.com.

For more information please contact:

Media

Investors

Kelly Armitage

Ben Kay

Group Communications Manager

Investor Relations & Corporate
Development Manager

DDI: +64 9 363 6368
Mobile: +64 27 213 5625
E-mail: Kelly.armitage@skycity.co.nz

DDI: +64 9 363 6067
E-mail: ben.kay@skycity.co.nz

5

 Appendix
Reconciliation between reported and normalised financial information
1H15
Revenue EBITDA

1H14
EBIT

NPAT

EBIT

NPAT

66.6

$m
467.0

$m
149.8

$m
111.6

$m
66.4

(1.5)

(1.0)

-

(1.6)

(1.6)

(1.1)

(0.3)

(0.3)

(2.3)

-

-

-

(1.1)

-

-

-

-

(0.3)

(0.3)

(0.2)

-

(0.5)

(0.5)

(0.4)

-

(1.1)

(1.1)

(0.8)

Auckland project costs

-

(0.2)

(0.2)

(0.1)

-

(0.6)

(1.6)

(1.2)

Profit from sale of Christchurch

-

-

-

-

-

-

-

1.0

(3.6)

(4.6)

(3.4)

$m

$m

$m

$m

510.0

154.4

111.2

Adelaide redevelopment costs

-

(1.5)

NZICC interest and other costs

-

Strategic projects

-

Restructuring costs

Normalised

Total Adjustments

Revenue EBITDA

-

(2.5)

(2.5)

(3.8)

-

Adjusted

510.0

151.9

108.7

62.8

467.0

146.2

107.0

63.0

International Business at Theoretical

(14.5)

(11.1)

(11.1)

(8.2)

(1.9)

(2.6)

(2.6)

(1.9)

Reported

495.5

140.8

97.6

54.6

465.1

143.6

104.4

61.1

SKYCITY’s objective of producing normalised financial information is to provide data
that is useful to the investment community in understanding the underlying
operations of the Group.
Gaming revenue figures reflect gaming win (inclusive of gaming GST). This
facilitates Australasian comparisons and is consistent with the treatment adoption by
major Australian casinos.
Non-gaming revenues are net of GST.
Total revenues are gaming win plus non-gaming revenues.
Key Adjustments are:






Adelaide redevelopment costs – Structural redundancies and launch costs for new
facilities (Sean’s Kitchen, Black Room)
NZICC – Interest on purchase of New Zealand International Convention Centre
(NZICC) land bank (calculated using the Group’s average cost of debt of 6.7% on
an average balance of $83m) and other costs specific to this project
Strategic project costs - Brisbane, Gold Coast and other miscellaneous items
Restructuring costs – Costs associated with changing the staffing structures under
an approved restructuring plan
Auckland project costs – Project, pre-opening and launch costs related to
Auckland facilities such as the Federal Street launch. 1H14 includes Sugar Club,
Fed Deli, Masu and the new gaming rooms

IB win rate at 1.04% for 1H15 (1H14: 1.28%).
Normalisation adjustments have been calculated in a consistent manner in 1H15 and
1H14.

6