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) has issued its third downgrade of FY25 earnings guidance, with underlying EBITDA expected to be ~4% below the previous range of NZ$225m–NZ$245m.</li><li>The downgrade is attributed to both cyclical and structural issues, including lower average spend per visitor and reduced visitation/spend by VIP gaming customers.</li><li>With further structural changes pending, including mandatory carded play and a government review decision, the risk/reward scenario is currently deemed unattractive.</li></ul>

SkyCity (SKC) has issued its third downgrade of FY25 earnings guidance, with underlying EBITDA expected to be ~4% below the previous range of NZ$225m–NZ$245m.The downgrade is attributed to both cyclical and structural issues, including lower average spend per visitor and reduced visitation/spend by VIP gaming customers.With further structural changes pending, including mandatory carded play and a government review decision, the risk/reward scenario is currently deemed unattractive.

<ul><li>Sky TV (SKT) reported a soft and relatively messy 1H25 result, as expected. Guidance for FY25 was moderately reduced, but the midpoint aligned with our prior forecasts.</li><li>SKT experienced similar year-on-year losses in its important Sky Box subscribers, suggesting the well-communicated satellite issues have not accelerated churn.</li><li>Sky Sports Now (SSN) streaming revenues were slightly ahead of estimates, and its low margin broadband business continues to grow strongly. </li></ul>

Sky TV (SKT) reported a soft and relatively messy 1H25 result, as expected. Guidance for FY25 was moderately reduced, but the midpoint aligned with our prior forecasts.SKT experienced similar year-on-year losses in its important Sky Box subscribers, suggesting the well-communicated satellite issues have not accelerated churn.Sky Sports Now (SSN) streaming revenues were slightly ahead of estimates, and its low margin broadband business continues to grow strongly. 

<ul><li>SkyCity (SKC) reported a disappointing 1H25 result, with underlying EBITDA down -23% on the prior year.</li><li>Cyclical challenges are weighing on average visitor spend, while ongoing structural and regulatory issues have led SKC to add cost in to improve compliance and risk management capabilities, and fund the transformation project in Adelaide.</li><li>The combination of these factors is amplifying operational deleverage. Moreover, the introduction of mandatory carded play (MCP) in NZ in July 2025 suggests top-line pressures get worse before they get better. </li></ul>

SkyCity (SKC) reported a disappointing 1H25 result, with underlying EBITDA down -23% on the prior year.Cyclical challenges are weighing on average visitor spend, while ongoing structural and regulatory issues have led SKC to add cost in to improve compliance and risk management capabilities, and fund the transformation project in Adelaide.The combination of these factors is amplifying operational deleverage. Moreover, the introduction of mandatory carded play (MCP) in NZ in July 2025 suggests top-line pressures get worse before they get better. 

SkyCity - 1H25 Result—Dealt a Costly Hand

<ul><li>Sky TV (SKT) is set to report its 1H25 result on Friday, 21 February.</li><li>We expect it to be soft given the impact of several negative headwinds, notably: (1) its focus on delivering a successful satellite migration, (2) a soft economic backdrop, and (3) costs skewed to 1H.</li><li>Our focus areas will be: (1) Sky box subscriber losses, (2) streaming revenue, and (3) guidance—with the likelihood of sizable satellite migration and other costs to be removed to reach underlying earnings. </li></ul>

Sky TV (SKT) is set to report its 1H25 result on Friday, 21 February.We expect it to be soft given the impact of several negative headwinds, notably: (1) its focus on delivering a successful satellite migration, (2) a soft economic backdrop, and (3) costs skewed to 1H.Our focus areas will be: (1) Sky box subscriber losses, (2) streaming revenue, and (3) guidance—with the likelihood of sizable satellite migration and other costs to be removed to reach underlying earnings. 

Sky TV - 1H25 Preview—May Make for Bad Viewing

<ul><li>SkyCity (SKC) reports its 1H25 result on 20 February 2024, we expect a material decline in its underlying NPAT on the prior year.</li><li>In tandem with structural issues, cyclical challenges continue to weigh on operational performance, being: (1) increased compliance costs, (2) mandatory carded play implementation, and (3) management's desire to strengthen the balance sheet.</li><li>We expect a revised FY25 guidance range due to the delay of the majority of NZICC pre-opening costs (c.NZ$11m) into FY26.</li></ul>

SkyCity (SKC) reports its 1H25 result on 20 February 2024, we expect a material decline in its underlying NPAT on the prior year.In tandem with structural issues, cyclical challenges continue to weigh on operational performance, being: (1) increased compliance costs, (2) mandatory carded play implementation, and (3) management's desire to strengthen the balance sheet.We expect a revised FY25 guidance range due to the delay of the majority of NZICC pre-opening costs (c.NZ$11m) into FY26.

SkyCity - 1H25 Preview—Playing the Cards It's Dealt

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 - Losing Streak

SkyCity (SKC) has issued its third downgrade of FY25 earnings guidance, with underlying EBITDA expected to be ~4% below the previous range of...

Forsyth Barr

Sky TV - 1H25 Result—Moderately Messy

Sky TV (SKT) reported a soft and relatively messy 1H25 result, as expected. Guidance for FY25 was moderately reduced, but the midpoint aligned with...

Forsyth Barr

SkyCity - 1H25 Result—Dealt a Costly Hand

We continue to view the risks/reward as negative, with SKC trading at a ~15x one-year forward PE on our revised estimates, a -12% discount to...

Forsyth Barr

Sky TV - 1H25 Preview—May Make for Bad Viewing

Sky TV (SKT) is set to report its 1H25 result on Friday, 21 February. We expect it to be soft given the impact of several negative headwinds

Forsyth Barr

SkyCity - 1H25 Preview—Playing the Cards It's Dealt

SkyCity (SKC) reports its 1H25 result on 20 February 2024, we expect a material decline in its underlying NPAT on the prior year.

Forsyth Barr

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