The shares of SKYCITY Entertainment Group Limited-Ord (ASX: SKC) will come under focus today after the casino operator reported mixed full year results to the market.

Here are the highlights (in NZD):

  • Revenue increased 9.1% year on year to $1,101.2 million.
  • Auckland casino revenue up 6.9% to $558 million.
  • International Business segment revenue up 32.7% with a win rate of 1.49%.
  • EBITDA up 9.8% to $333.9 million.
  • Net profit after tax jumped 13.1% to $145.7 million.
  • Earnings per share of 24.3 cents.
  • Final dividend of 10.5 cents.

So what?

SkyCity’s Auckland site was clearly the stand out performer, growing its revenue by 6.9% to account for just over half of company revenue. In fact, all its New Zealand sites delivered great results during the year with solid growth across both gaming machines and tables.

Its International Business segment was another bright spot. There was record company-wide high-roller activity with turnover up 32.7% to $12.4 billion and a win rate for the period of 1.49%.

The strong performance of its New Zealand and International Business segments helped offset a disappointing spot of weakness at its Australian sites. Revenue from its Australian casinos fell 3% year on year due to challenging trading conditions in both Adelaide and Darwin. But profitability increased thanks to restructuring at its Adelaide casino, meaning Australian EBITDA actually came in 1.2% higher year on year.

Management has pointed to quieter trading in May and June as being the key reasons for a second half performance it described as “below expectations”.

Now what?

Unfortunately it appears the second half performance has failed to live up to expectations of both management and investors. SkyCity’s shares look likely to be spending the day in the red judging by the early trading of its shares.

I feel that although the results were a little mixed, much like Crown Resorts Ltd (ASX: CWN) and Star Entertainment Group Ltd (ASX: SGR), SkyCity is well positioned to profit from the incredible long-term growth of tourism into Australia and New Zealand.

I believe management is on top of things and expect a much improved performance from its Australian businesses in FY 2017. For this reason I would look at the 4.5% drop in its share price today as a buying opportunity for a long-term investment. With its shares trading at 18x earnings it certainly looks to be the best value amongst its peers.

Lastly, before making an investment I would suggest you check to see if you own one of these three rotten ASX shares. Each could be harming your portfolio as we speak and might be best swapped out if you ask me,

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.