SkyCity Entertainment Group Limited · NZX:SKC
SkyCity Entertainment — H1 FY2003 Earnings Presentation
31 slides from SkyCity Entertainment's earnings presentation, 2003
Slide 1: Sky City Entertainment Group Limited Interim Result
SKY CITY ENTERTAINMENT GROUP LIMITED Interim Result Half Year Ended 31 December 2002
Slide 2: Financial Year 2003 – First Half Result
Financial Year 2003 – First Half Result Interim Dividend FY03 Net Profit (NSAT): $52.8m 21cps 4/4/03 (21/3/03) $M cps $52.8m 21c 20c +39% $37.9m* 15.5c 14c $33.2m +14% 12c $27.7m +20% $22.4m +24% 8.5c 1H99 1H00 1H01 1H02 1H03 1H99 1H00 1H01 1H02 Special 1H03 11/02 * Before non-recurring items 2
Slide 3: Interim Dividend FY03
Interim Dividend FY03 • 21 cents per share (15.5 cps 2002) • Entitlement date 21 March • Payment date 4 April • Fully imputed • 2002/03 year to date dividends - FY03 final dividend (October 2002) 22.5cps - Special dividend (November 2002) 20.0cps - Interim dividend (April 2003) 21.0cps 63.5cps • Tot
Slide 4: Revenues and Cost and Margin Management
Sky City Entertainment Group Revenues and Cost and Margin Management • $31m of additional revenue converted into $19m of additional net (before tax) profit, as per below: Revenues $31m Direct Expenses $ 7m Indirect Expenses $ 5m (incl. depreciation & amortisation) Net Surplus before tax (1) $19m Net
Slide 5: Key Features of the Group Financial Result
Key Features of the Group Financial Result • Revenues increased at Auckland, Adelaide, Queenstown, Canbet • New revenue stream, Sky Riverside (Hamilton) • Cinema revenues steady at Sky City Leisure • Sky City Auckland - growth continues • Sky City Adelaide - growth, turnaround evident in 2H02 contin
Slide 6: FY03 First Half Result: Operating Revenue
FY03 First Half Result: Operating Revenue Revenues are stated net of complimentaries. All figures are stated in $NZ unless otherwise indicated NZ$M 12% $280m 18% $249m $31m 22% 47% $25m $211m A$53m 13% A$47m A$41m 14% $189m 13% 13% 6% $158m $167m 10% 6% $144m $128m 1H99 1H00 1H01 1H02 1H03 Sky City
Slide 7: FY03 First Half Result: EBITDA
FY03 First Half Result: EBITDA NZ$M 21% $126m $11.2m 11% 32% $103m A$12.7m 36% 53% $93m $8.5m A$8.3m $100m A$10m 20% 18% 15% $85m 16% $79m 7% $68m 16% $59m 1H99 1H00 1H01 1H02 1H03 Sky City Auckland (1) Sky City Adelaide Other New Zealand Operations (2) (1) Includes Group/Corporate Expenses (2) Othe
Slide 8: FY03 First Half Result: Revenues
FY03 First Half Result: Revenues Revenues are stated net of complimentaries Auckland Adelaide NZ$M + 13% A$M + 13% + 14% + 11% $189m + 15% + 3% $167m $157m $157m $139m $130m $53m $47m $47m $41m $41m $36m $32m $27m $28m $5m $6m $6m 1H01 1H02 1H02 1H03 1H03 1H02 1H01 1H02 1H03 1H01 1H03 1H01 1H02 1H03
Slide 9: Sky City Auckland
SKY CITY AUCKLAND • Strong revenue growth across all sectors • EBITDA margin up 2% points to 53% • Gaming expansion to relieve capacity constraints. Project will commence April 2003. Completion early December ’03 • Convention Centre project well advanced • New 320 room hotel project ($75m) announced
Slide 10: First Half Result FY03: Sky City Auckland
First Half Result FY03: Sky City Auckland • Strong result, growth continues, costs managed, margins maintained • Revenues 13% (+$22.0m) - Gaming 14% (+$19.0m) - F&B 18% (+$2.4m) - Hotel & Conference 9% (+$0.8m) - Sky Tower 11% (+$0.4m) - Carparking Steady at $4.7m • Gross Margin % 1% point at 64% •
Slide 11: Auckland: Gaming +14%
Sky City Auckland: FY03 Half Year Result Gaming +14% • Revenue Growth Tables 20% Gaming Machines 10% • Aristocrat hyperlink jackpot (Cash Express) introduced in December • New product introduced: Aristocrat ‘Excite’ and Konami ‘Endeavour’ • 60 cars won, 834 jackpots paid out • Third >$1m Sky High ja
Slide 12: Auckland: Food and Beverage
Sky City Auckland: FY03 Half Year Result Food and Beverage • Revenue 18% to $15.9m ($13.5m) • Gross Margin from 20% to 17% • “Orbit” refurbishment/update completed September ‘02 • New “Observatory” restaurant (April ’02) achieving good results. Additional revenues achieved - for both Orbit and Obser
Slide 13: Auckland: Hotel and Conference
Sky City Auckland: FY03 Half Year Result Hotel and Conference • Revenue 9% at $10.2m • Hotel Occupancy from 86% to 89% • Hotel Room Rate Steady at $123 • Strong support from all sectors: domestic and international, leisure and corporate, conference • Best performing hotel in Auckland • Hotel refurbi
Slide 14: Auckland: Sky Tower
Sky City Auckland: FY03 Half Year Result Sky Tower • Revenues 11% at $3.7m • Vertigo, Sky Jump, 2 restaurants, telecommunications, education programmes, special promotions • >50% of international visitors to Auckland visit Sky Tower (more than any other paid-for attraction in New Zealand) 14
Slide 15: Auckland: Carparking, Theatre
Sky City Auckland: FY03 Half Year Result Carparking, Theatre Carparking • Revenue steady at $4.7m Sky City Theatre • 35,000 attended Auckland Theatre Company’s record-breaking production of the Rocky Horror Show • 20,000 attended the third Auckland International Film Festival • 3 movie premieres scr
Slide 16: Auckland: New Products and Facilities
Sky City Auckland: FY03 Half Year Result New Products and Facilities • Convention and Exhibition Centre ($60m): first quarter of calendar year 2004 • Gaming Expansion ($20m, +15% capacity: 12 tables, 230 machines): mid December 2003 • 320 room deluxe standard hotel ($75m): December 2004 • New gaming
Slide 17: Sky City Adelaide
SKY CITY ADELAIDE • 1H03 continued the strong trends evident in 2H02 • Revenues up 13% • Margins up significantly • Increasing profile as one of the most popular entertainment destinations in South Australia
Slide 18: Adelaide: FY03 Half Year Result
Sky City Adelaide: FY03 Half Year Result • Revenues up 13%, costs managed to +6%, margins up substantially • Revenues 13% to A$53m - Gaming 15% (+A$6m to A$47m) - Food and Beverage 7% (+A$0.4m to A$6.9m) • Gross Margin 5% points to 35% • EBITDA 6% points (+53% from A$8.3m to A$12.7m) • EBIT 6% point
Slide 19: Adelaide: Gaming +15%
Sky City Adelaide: FY03 Half Year Result Gaming +15% • Growth, new product initiatives, range of promotions • Revenue growth Tables 15% Gaming Machines 15% • Gaming Gross Margin up from 32% to 39% • New products - IGT Wheel of Fortune - 20 additional Aristocrat hyperlink (Cash Express) machines inst
Slide 20: Adelaide: Food and Beverage
Sky City Adelaide: FY03 Half Year Result Food and Beverage • Food and Beverage* 7% from A$6.5m to A$6.9m • Gross Margin from 17% to 10% • Food and Beverage revenue increase offset by increased complimentaries and drop in gross margin. Gross Margin will be the focus of attention in 2H03 * Inclusive o
Slide 21: Other New Zealand Operations
OTHER NEW ZEALAND OPERATIONS • Sky Riverside Hamilton • Sky Alpine Queenstown • Sky City Leisure
Slide 22: Sky Riverside (Hamilton)
Sky Riverside (Hamilton) • Successful opening 19/20 September • On time and on budget • Strong initial patronage/interest • Revenues for period 20/9/02 - 31/12/02 of $7.8m • Initial period performance ratios were: - Gross Margin 54% - EBITDA ratio 41% - EBIT ratio 22% • High level of involvement in
Slide 23: Sky Alpine Queenstown
Sky Alpine Queenstown • Revenues 23% to $3.0m • Gross Margin from 28% to 32% • Gaming Revenues Machines 35% Tables 22% • 10 new (IGT Spectrum) gaming machines installed. Total machine number increased from 70 to 78 • Difficult trading environment (2 casino licences) • EBIT close to breakeven at -$0.
Slide 24: Sky City Leisure Limited: 50.2% of shares
Sky City Leisure Limited: 50.2% of shares 77% of MCNs (fully diluted 74%) • Cinema revenues steady at $14.5 million but cinema gross margin up $200k at $3.9m • Adverse impact from a continuing decline in Planet Hollywood revenues and earnings. Leisure board focused on minimising the impact of Planet
Slide 25: Canbet Limited
CANBET LIMITED • ASX listed • Profit for 1H03 of A$399,000
Slide 26: Canbet: First Half Result FY03
Canbet: First Half Result FY03 • Sports wagering, internet-based, UK relocation, ASX listed • Sky City at 33% shareholding • Key elements of the Canbet 1H03 result - turnover 55% to A$300m (1H02: A$190m) - betting volumes 70% - bookmaking win at 1.8% - profit (NSAT) at A$399k: up $95k on FY02 profit
Slide 27: Regulatory and Community
REGULATORY AND COMMUNITY
Slide 28: Regulatory, Compliance
Regulatory, Compliance • The New Zealand Gambling Bill (no new casino licences) is expected to be enacted within the next 3-4 months • Sky City has responsible gambling and responsible host programmes in place at each of its casino operations in New Zealand and South Australia • 1H03 was the first p
Slide 29: Community Involvement
Community Involvement The Sky City Entertainment Group participates in and contributes to the local communities in which it operates, in many ways, including: • Host responsibility programmes at all four Sky City properties • Sky City Starlight Symphony in Auckland. An estimated 250,000 people atten
Slide 30: Capital Management Share Buyback
CAPITAL MANAGEMENT SHARE BUYBACK
Slide 31: Share Buyback
Share Buyback • On market share buyback of up to $60 million will commence on 3 March 2003 • Buyback periods will be 3 March 2003 to 30 April 2003 and following the Sky City FY03 full year result release to 30 November 2003 • The on market share buyback and the special dividend of 20cps paid on 29/1
Sky City Entertainment Group — H1 FY2003 Earnings Presentation on 6ix