New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>SkyCity (SKC) provided a disappointing trading update, disappointing first time guidance for next year and, consequently, a suspension of its dividend for at least the next 18 months.</li><li>It is increasingly difficult to interpret between the structural and cyclical headwinds that SKC is exposed to.</li><li>Regulatory response changes to its operating approach are intertwined with reduced spend per visitor across its properties and products.</li></ul>

SkyCity (SKC) provided a disappointing trading update, disappointing first time guidance for next year and, consequently, a suspension of its dividend for at least the next 18 months.It is increasingly difficult to interpret between the structural and cyclical headwinds that SKC is exposed to.Regulatory response changes to its operating approach are intertwined with reduced spend per visitor across its properties and products.

<ul>
<li>SkyCity (SKC) has agreed with the New Zealand Department of Internal Affairs (DIA) that it should pay a pecuniary penalty of just NZ$4m in relation to its past anti-money laundering and countering financing of terrorism (AML/CFT) failures.</li>
<li>The breaches span from 2018–2023 and relate largely, but not exclusively, to historical matters. </li>
<li>Further to the agreement with Australian financial crimes unit, AUSTRAC, earlier this year (SKC reiterated late last week that it has agreed to an A$67m penalty plus associated costs), this is another positive development as SKC presses forward in resolving its outstanding regulatory issues. </li>
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SkyCity (SKC) has agreed with the New Zealand Department of Internal Affairs (DIA) that it should pay a pecuniary penalty of just NZ$4m in relation to its past anti-money laundering and countering financing of terrorism (AML/CFT) failures.
The breaches span from 2018–2023 and relate largely, but not exclusively, to historical matters. 
Further to the agreement with Australian financial crimes unit, AUSTRAC, earlier this year (SKC reiterated late last week that it has agreed to an A$67m penalty plus associated costs), this is another positive development as SKC presses forward in resolving its outstanding regulatory issues. 


SkyCity - Clearing Another Regulatory Hurdle

<ul><li>The New Zealand government plans to introduce a new online gambling duty as part of its approach to regulate online casinos.</li><li>The proposed rate of 12% of gross gaming revenue (GGR) will see online casinos taxed at a higher rate than their land based counterparts.</li><li>The aggregate tax rate of ~25% (made up of GST of ~13% [= 15% of 115%] and the 12% duty) compares to ~18% for land based casinos. </li></ul>

The New Zealand government plans to introduce a new online gambling duty as part of its approach to regulate online casinos.The proposed rate of 12% of gross gaming revenue (GGR) will see online casinos taxed at a higher rate than their land based counterparts.The aggregate tax rate of ~25% (made up of GST of ~13% [= 15% of 115%] and the 12% duty) compares to ~18% for land based casinos. 

<ul><li>SkyCity's (SKC) 1H24 result provided a reminder that the regulatory overhang is likely to remain for some time, with carded play to be made mandatory in its NZ properties from the start of FY26 and a material fine from the South Australian Government appearing more likely.</li><li>The result itself showed resilient performance in the face of a weakening consumer backdrop, with the company maintaining its full-year earnings guidance.</li><li>The interim dividend was the only disappointment with SKC opting to retain cash as it undertakes a capital structure review. </li></ul>

SkyCity's (SKC) 1H24 result provided a reminder that the regulatory overhang is likely to remain for some time, with carded play to be made mandatory in its NZ properties from the start of FY26 and a material fine from the South Australian Government appearing more likely.The result itself showed resilient performance in the face of a weakening consumer backdrop, with the company maintaining its full-year earnings guidance.The interim dividend was the only disappointment with SKC opting to retain cash as it undertakes a capital structure review. 

SkyCity - 1H24 — Carded After Repeated Infringements

<ul><li>SkyCity (SKC) will report a subdued period of trading at its 1H24 result on 22 February 2024.</li><li>The company downgraded FY24 earnings guidance in early December 2023, citing cost-of-living pressures on consumers and a further deterioration at its Adelaide casino.</li><li>With economic headwinds likely to continue during 2H24, a reaffirmation of its FY24 earnings guidance would be a positive outcome for SKC.</li></ul>

SkyCity (SKC) will report a subdued period of trading at its 1H24 result on 22 February 2024.The company downgraded FY24 earnings guidance in early December 2023, citing cost-of-living pressures on consumers and a further deterioration at its Adelaide casino.With economic headwinds likely to continue during 2H24, a reaffirmation of its FY24 earnings guidance would be a positive outcome for SKC.

SkyCity  - Uncertain Horizon — 1H24 Preview

Australia

SKYCITY Entertainment Group Ltd. provides gaming and casino services. The Company offers various casinos accompanied with various bars, hotels, restaurants, and convention centers. SKYCITY Entertainment Group offers services in Australia and New Zealand.

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Skycity Entertainment (SKC AU)

SkyCity - Dealer Cuts the Dividend

SkyCity (SKC) provided a disappointing trading update, disappointing first time guidance for next year and, consequently, a suspension of its...

Forsyth Barr

SkyCity - Clearing Another Regulatory Hurdle

Moreover, with near-term cyclical headwinds, we think the current discount is fair with SKC trading at ~11x one year forward PE. NEUTRAL.

Forsyth Barr

SkyCity - Taking More Tax

The New Zealand government plans to introduce a new online gambling duty as part of its approach to regulate online casinos.

Forsyth Barr

SkyCity - 1H24 — Carded After Repeated Infringements

The result itself showed resilient performance in the face of a weakening consumer backdrop, with the company maintaining its full-year earnings...

Forsyth Barr

SkyCity - Uncertain Horizon — 1H24 Preview

With economic headwinds likely to continue during 2H24, a reaffirmation of its FY24 earnings guidance would be a positive outcome for SKC.

Forsyth Barr

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