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>We think 2026 will be an incrementally more positive year for SkyCity Entertainment Group (SKC).</li><li>This earnings downgrade cycle has slowed over the last three months, and we expect FY26 to represent a trough in earnings, albeit with a second half skew (we estimate 1H26 EBITDA: NZ$84m, 2H26: NZ$94m).</li><li>Another near-term catalyst is the potential monetisation of a property asset to delever the balance sheet and resume dividend payments.</li></ul>

We think 2026 will be an incrementally more positive year for SkyCity Entertainment Group (SKC).This earnings downgrade cycle has slowed over the last three months, and we expect FY26 to represent a trough in earnings, albeit with a second half skew (we estimate 1H26 EBITDA: NZ$84m, 2H26: NZ$94m).Another near-term catalyst is the potential monetisation of a property asset to delever the balance sheet and resume dividend payments.

<ul><li>SkyCity (SKC) reaffirmed its FY26 underlying EBITDA guidance of NZ$190m–NZ$210m at its 2025 AGM.</li><li>We forecast FY26 underlying EBITDA of NZ$198m, in the middle of its FY26 guidance range but +4% ahead of consensus.</li><li>SKC is targeting NZ$200m of asset sales, including the Auckland carpark, 99 Albert Street, and other commercial buildings, provided the right price can be achieved.</li></ul>

SkyCity (SKC) reaffirmed its FY26 underlying EBITDA guidance of NZ$190m–NZ$210m at its 2025 AGM.We forecast FY26 underlying EBITDA of NZ$198m, in the middle of its FY26 guidance range but +4% ahead of consensus.SKC is targeting NZ$200m of asset sales, including the Auckland carpark, 99 Albert Street, and other commercial buildings, provided the right price can be achieved.

<ul><li>At ~0.5x book value, SkyCity (SKC) is being priced as a perpetual value destroyer.</li><li>Our valuation is underpinned by 29% terminal EBITDA margin and 8% ROIC assumptions, with our NZ$1.10 target price, -20% below book value.</li><li>SKC needs to show that its earnings downgrade cycle is ending and that its earnings potential remains intact before an anticipated rerating takes place.</li></ul>

At ~0.5x book value, SkyCity (SKC) is being priced as a perpetual value destroyer.Our valuation is underpinned by 29% terminal EBITDA margin and 8% ROIC assumptions, with our NZ$1.10 target price, -20% below book value.SKC needs to show that its earnings downgrade cycle is ending and that its earnings potential remains intact before an anticipated rerating takes place.

Thematic (Sector/Industry)

<ul><li>The RBNZ has done its best to make sure none of us approach 2023 with any illusions of good times ahead</li><li>Mortgage rates have hit a 10 year high, inflation is expected to remain stubbornly elevated, and the icing on RBNZ's economic cake is its forecast of four quarters of declining GDP</li><li>When choosing our five stocks to watch we have leaned on companies with the majority of their exposure overseas (Infratil [IFT], Vulcan Steel [VSL], KMD Brands [KMD]) or with attractive valuations (Oceania Healthcare [OCA], SkyCity [SKC]) where we think that the bad news is firmly in the price</li></ul>

The RBNZ has done its best to make sure none of us approach 2023 with any illusions of good times aheadMortgage rates have hit a 10 year high, inflation is expected to remain stubbornly elevated, and the icing on RBNZ's economic cake is its forecast of four quarters of declining GDPWhen choosing our five stocks to watch we have leaned on companies with the majority of their exposure overseas (Infratil [IFT], Vulcan Steel [VSL], KMD Brands [KMD]) or with attractive valuations (Oceania Healthcare [OCA], SkyCity [SKC]) where we think that the bad news is firmly in the price

Equity Strategy - The Year Ahead: Five Themes and Five Stocks

<ul>
<li>Almost 18 months later, the unconditional sale of 99 Albert Street and the Victoria Street properties for NZ$74.5m marks the first meaningful sale in this journey.</li>
<li>With progress on asset sales and a heads of agreement reached on the Adelaide fine, the overhangs that have weighed on investor sentiment should begin to ease.</li>
<li>At ~0.4x net asset value, we continue to view the risk–reward as attractive.</li>
</ul>


Almost 18 months later, the unconditional sale of 99 Albert Street and the Victoria Street properties for NZ$74.5m marks the first meaningful sale in this journey.
With progress on asset sales and a heads of agreement reached on the Adelaide fine, the overhangs that have weighed on investor sentiment should begin to ease.
At ~0.4x net asset value, we continue to view the risk–reward as attractive.


SkyCity Cashing in on the Commercial Assets

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Skycity Entertainment (SKC AU)

SkyCity Counting Chips

We think 2026 will be an incrementally more positive year for SkyCity Entertainment Group (SKC).This earnings downgrade cycle has slowed over the...

Forsyth Barr

SkyCity Breaking Its Losing Streak

SKC is targeting NZ$200m of asset sales, including the Auckland carpark, 99 Albert Street, and other commercial buildings, provided the right price...

Forsyth Barr

SkyCity Playing by the Book

Our valuation is underpinned by 29% terminal EBITDA margin and 8% ROIC assumptions, with our NZ$1.10 target price, -20% below book value.

Forsyth Barr

Equity Strategy - The Year Ahead: Five Themes and Five Stocks

When choosing our five stocks to watch we have leaned on companies with the majority of their exposure overseas (Infratil [IFT], Vulcan...

Forsyth Barr

SkyCity Cashing in on the Commercial Assets

Almost 18 months later, the unconditional sale of 99 Albert Street and the Victoria Street properties for NZ$74.5m marks the first meaningful sale...

Forsyth Barr

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)