The SKYCITY Entertainment Group Limited (ASX: SKC) share price will be on watch on Friday after the accommodation and casino operator reported its first-half FY 2018 results. On the top line SKYCITY Entertainment posted reported revenue of NZ$554.7 million for the first-half, a 4% increase compared to the prior corresponding period. Normalised revenue came in at NZ$545 million, up 3.6% on the H1 FY 2017. Normalised revenue sets the International Business (IB) win rate to a theoretical win rate of 1.35%, whereas the company achieved an IB win rate of 1.55% during the half. The main driver of this growth…
To keep reading, enter your email address or login below.
The SKYCITY Entertainment Group Limited (ASX: SKC) share price will be on watch on Friday after the accommodation and casino operator reported its first-half FY 2018 results.
On the top line SKYCITY Entertainment posted reported revenue of NZ$554.7 million for the first-half, a 4% increase compared to the prior corresponding period. Normalised revenue came in at NZ$545 million, up 3.6% on the H1 FY 2017.
Normalised revenue sets the International Business (IB) win rate to a theoretical win rate of 1.35%, whereas the company achieved an IB win rate of 1.55% during the half.
The main driver of this growth was the SKYCITY Auckland business and its IB segment. In the first-half SKYCITY Auckland delivered a 2.1% increase in total revenue to NZ$289.9 million and the IB segment achieved total normalised revenue of NZ$64.8 million, up 9.4% on the first-half of FY 2017. Elsewhere, all of the company’s other sites posted revenue growth except for SKYCITY Darwin which saw revenue fall 0.4% to A$62 million due to competitive pressures.
Thanks largely to cost efficiencies and operating leverage, the company reported a 6.8% increase in earnings before interest, tax, depreciation, and amortisation (EBITDA) to NZ$180.6 million and an 11.6% jump in reported net profit after tax to NZ$93.5 million. This ultimately led to earnings per share coming in at 13.9 New Zealand cents.
Once again, the main driver of this profit growth was SKYCITY Auckland. It posted earnings before interest and tax of $105.8 million during the half, up 4.8% on the record prior corresponding period. According to management, marketing and promotional initiatives helped offset the impact of reduced premium gaming activity in the second-quarter and the required changes to its smoking decks.
Looking ahead, management believes the company is on-track to deliver modest growth in EBITDA in FY 2018. It has pointed to growth in combined NZ properties, improved performance in combined Australian properties, and on-going recovery in IB as the key drivers of second-half growth. In respect to the latter, management has indicated that forward bookings for the Chinese New Year period have been positive and it continues to target NZ$10 billion in segment turnover for FY 2018.
Should you invest?
I think this was a reasonably solid result from SKYCITY Entertainment and could make it well worth a closer look alongside other tourism-themed shares such as Star Entertainment Group Ltd (ASX: SGR), Sealink Travel Group Ltd (ASX: SLK), and Crown Resorts Ltd (ASX: CWN).
Alternatively, these top growth shares could be even better investments following the recent market meltdown.
For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..
But knowing which blue chips to buy, and when, can be fraught with danger.
The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."
Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.
The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.
Click here to claim your free report.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited. The Motley Fool Australia has recommended Sky City Entertainment Group Ltd. 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.