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ASX 200 rises 0.8%, investors bet on SkyCity

ASX 200
Credit: Cimexus

The S&P/ASX 200 Index (ASX: XJO) went up by 0.81% today to 6,113 points.

Investors bet on SKYCITY Entertainment Group Limited (ASX: SKC)

SkyCity released its FY20 result today for the 12 months ending 30 June 2020.

Casino operators like SkyCity announce both reported numbers and normalised numbers.

SkyCity said that reported revenue rose 36.8% to $1.125 billion. Reported earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 16.9% to $348.3 million. Reported net profit after tax (NPAT) rose by 62.8% to $235.4 million and reported earnings per share (EPS) increased by 65.5% to 35.4 cents.

Normalised revenue (including gaming GST) fell by 24.3% to $779.5 million. Normalised EBITDA declined 37.7% to $200.7 million and normalised NPAT dropped by 59.7% to $66.3 million. The normalised EPS fell by 59% to 10 cents.

The ASX 200 casino operator didn’t declare a final dividend for FY20.

SkyCity said that the normalised EBITDA of $200.7 million and NPAT of $66.3 million was at the top end of its guidance provided at the time of its equity raising in June 2020. Its reported results were up significantly because of the NZICC fire accounting and the gain from the Auckland car park concession sale. However, this was offset by a $150 million impairment of the SkyCity Adelaide casino licence.

Looking ahead to FY21, its New Zealand businesses recovered more quickly than anticipated for the period from 1 June 2020 to 11 August 2020, though the Auckland facility was closed from 12 August to 30 August 2020. Hamilton and Queenstown continued to trade ahead of expectations.

The business said that the EBITDA and cashflow was materially ahead of expectations. SkyCity Adelaide is EBITDA and cashflow positive since re-opening and the NZ online casino business has been EBITDA positive for every month since April 2020.

The Skycity share price rose by 8% and it was the best performer within the ASX 200.  

WiseTech Global Ltd (ASX: WTC) founder share selldown

It was revealed today that WiseTech founder and CEO Mr Richard White as well as co-founder and executive director Ms Maree Isaacs have sold shares.

Mr White said that the shares were sold as part of a trading program which will continue until 31 December 2020, subject to no material, non-public information arising during this period. The trading program has limits on daily trade volumes so it doesn’t impact the market.

WiseTech told investors that Mr White intends to sell down a small portion of his shares to facilitate liquidity of WiseTech’s shares and enable diversification of assets.

After the completion of the trading program Mr White expects to have voting control of more than 45% of issued capital. In the last share sale he sold approximately 0.83% of WiseTech’s total shares. The other sale since listing was in December 2017 when he sold less than 2% of the ASX 200 company’s shares.

Mr White assured investors he remains committed to WiseTech. He intends to remain a substantial, long-term shareholder. Directors and employees of WiseTech still own approximately 59% of the business.

The ASX 200 business included some words from Mr White in the ASX announcement. One section said: “I am excited about WiseTech’s future global growth opportunities and continue to be as committed and driven as ever, on achieving our global growth ambitions. We are gaining momentum in driving revenue growth, with four new global customer signed up in the first seven months of calendar 2020 and a strong pipeline of further global deals.”

The WiseTech share price rose 1.1% today, despite initially being down.

Other notable share price movements

The worst performer in the ASX 200 today was the Spark Infrastructure Group (ASX: SKI) share price which dropped 6%.

One business to make the news today was Bubs Australia Ltd (ASX: BUB). The infant formula business announced its capital raising was being done at a price of $0.80 per share. Its share price dropped almost 5% in reaction.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO and WiseTech Global. The Motley Fool Australia has recommended BUBS AUST FPO and 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 Scott Phillips.

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