New Zealand casino group Sky City Entertainment was back in profit over the last year, generating a profit of NZ$29.2m, up from a loss of NZ$143.3m the previous year, but revenue and spend per head were down due to challenging economic conditions.
Group revenue came in at $825.2m, five per cent lower than the prior period underlying revenue with lower spend per visit and higher VIP customer churn in Adelaide. Customer visitation remains strong, up 4.6 per cent on prior period with lower spend attributed to challenging economic conditions.
Chief Executive Officer, Jason Walbridge, said: “Our financial results reflect the difficult operating environment we’ve navigated in FY25. The delayed economic recovery in New Zealand has led to lower discretionary spend impacting our business and that has come through the same time as a period of elevated investment. This investment has been centred around regulatory systems upgrades, B3, pre-opening costs for New Zealand International Convention Centre (NZICC) and preparation for online casino gaming in New Zealand”.
The group also highlighted elevated costs related to upgrading regulatory systems, pre-opening costs
for the NZICC and continuing to invest in its online gaming capability. Gaming revenue in Auckland was impacted by the challenging market conditions and customer churn in the premium and VIP customer segments. The reduction was partially offset by the contributions from the Horizon by SkyCity Hotel since August 2024, and the carpark income due to the buyback of the carpark concession.
“The Auckland hotel market remains very competitive with an oversupply of hotel rooms due to lower visitor numbers to the city. Horizon by SkyCity has had a strong first year notwithstanding the macroeconomic backdrop and we’re looking forward to the positive difference NZICC will make to occupancy across our precinct and wider Auckland when it opens in six months’ time” Mr Walbridge said.
EBITDA for Hamilton and Queenstown was down four per cent in line with expectations due to lower revenue partially offset by disciplined cost control. The SkyCity Adelaide business experienced higher levels of customer churn in the VIP customer segment due to enhanced AML and host responsibility initiatives, particularly in the second half which impacted gaming revenue.
“Carded play is now live across all our New Zealand sites and while still early days, we’re pleased with the response from customers so far. We are also confirming the previous guidance regarding the impact on previously uncarded revenue, equivalent to $20 – $30m EBITDA in FY26” Mr Walbridge said. “This is a significant change for SkyCity and our customers as we continue to work hard on raising our host responsibility measures. It will also create operational efficiency over time and importantly, deliver meaningful and actionable customer insights”.
“We are looking forward to opening the doors to the NZICC in February. It’s a world-class venue and is already attracting large-scale events, exhibitions and concert interest. This will be a major catalyst for SkyCity and wider Auckland, with an estimated 500,000 extra visitations annually expected when operating at full capacity,” Mr Walbridge said.
“Early FY26 trading has been substantially in line with our expectations. The impact of Carded Play is in-line with our previous guidance and we’re yet to observe any positive change in consumer discretionary spending in the subdued New Zealand economy” Mr Walbridge said. “We expect overall market conditions will continue to be challenging in the short term. This continues to be a challenge for us as the ongoing delay in the economic recovery in New Zealand comes at the same time as elevated costs related to upgrading our regulatory systems and B3 programme, pre-opening costs for NZICC in February and the expected launch of regulated online casino gaming in winter 2026”.
“Looking to FY27, we expect earnings to improve with NZICC expected to be breakeven on a stand-alone basis and the regulated online gaming business targeted to deliver breakeven in the first year of operation in FY27 “We remain optimistic that we will see a recovery in spend per visit across our properties as the New Zealand economic backdrop improves, supported by a full year of visitation benefits from NZICC and the spend expected from that. SkyCity is well placed to maximise that opportunity when it occurs,” Mr Walbridge said.
The post SkyCity back in profit but revenue and spend per head both still down appeared first on G3 Newswire.
New Zealand casino group Sky City Entertainment was back in profit over the last year, generating a profit of NZ$29.2m, up from a loss of NZ$143.3m the previous year, but revenue and spend per head were down due to challenging economic conditions. Group revenue came in at $825.2m, five per cent lower than the prior…
The post SkyCity back in profit but revenue and spend per head both still down appeared first on G3 Newswire.