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 expect SkyCity (SKC) would be a beneficiary of the National Party's (National) policy to regulate online casino operators from the beginning of FY25.</li><li>Online regulation is positive for SKC, with the potential for market share gains from a (likely) reduction in competitors, coupled with a larger overall market size from the legitimisation of the industry.</li><li>While the current government is signalling its intention to regulate the online gaming market, National's announcement and its current favourable polling gives us increased confidence that regulation will happen during the next term of government.</li></ul>

We expect SkyCity (SKC) would be a beneficiary of the National Party's (National) policy to regulate online casino operators from the beginning of FY25.Online regulation is positive for SKC, with the potential for market share gains from a (likely) reduction in competitors, coupled with a larger overall market size from the legitimisation of the industry.While the current government is signalling its intention to regulate the online gaming market, National's announcement and its current favourable polling gives us increased confidence that regulation will happen during the next term of government.

SkyCity - Gambling on a Change of Government

<ul><li>The Department of Internal Affairs (DIA) is making an application to the Gambling Commission to temporarily suspend SkyCity’s (SKC) NZ casino license.</li><li>The application will seek a suspension for a period “in the range of 10 days” compared to a maximum suspension of six months under the Gambling Act 2003.</li><li>This would mean the gambling operations at all of its NZ properties (Auckland, Hamilton and Queenstown) would be closed during the suspended days if the industry's ruling body, the Gambling Commission, decided in favour of the DIA’s application.</li></ul>

The Department of Internal Affairs (DIA) is making an application to the Gambling Commission to temporarily suspend SkyCity’s (SKC) NZ casino license.The application will seek a suspension for a period “in the range of 10 days” compared to a maximum suspension of six months under the Gambling Act 2003.This would mean the gambling operations at all of its NZ properties (Auckland, Hamilton and Queenstown) would be closed during the suspended days if the industry's ruling body, the Gambling Commission, decided in favour of the DIA’s application.

SkyCity - Regulatory Risk Eating More Chips

<ul><li>SkyCity (SKC) reported a solid FY23 result, though its guidance for FY24 disappointed and appears cautious.</li><li>One offs late in the year lifted FY23 EBITDA to the top end of SKC’s guidance range, driven by a strong performance from the Auckland property.</li><li>Other properties modestly disappointed, with Adelaide the biggest concern, showing a sharp table gaming revenue reduction following the introduction of cash limits. </li></ul>

SkyCity (SKC) reported a solid FY23 result, though its guidance for FY24 disappointed and appears cautious.One offs late in the year lifted FY23 EBITDA to the top end of SKC’s guidance range, driven by a strong performance from the Auckland property.Other properties modestly disappointed, with Adelaide the biggest concern, showing a sharp table gaming revenue reduction following the introduction of cash limits. 

SkyCity  - FY23 Result — A Waiting Game

<ul><li>SkyCity (SKC) is likely to report a solid FY23 result on Wednesday, 23 August 2023.</li><li>We expect strong Electronic Gaming Machine (EGM) revenue in New Zealand will have offset the continued sluggish recovery in Adelaide, with table gaming revenue acutely impacted by cashless gaming trials that began in January 2023.</li><li>Our FY23 EBITDA forecast of NZ$309m is towards the top end of SKC's revised guidance range of NZ$300m–NZ$310m. </li></ul>

SkyCity (SKC) is likely to report a solid FY23 result on Wednesday, 23 August 2023.We expect strong Electronic Gaming Machine (EGM) revenue in New Zealand will have offset the continued sluggish recovery in Adelaide, with table gaming revenue acutely impacted by cashless gaming trials that began in January 2023.Our FY23 EBITDA forecast of NZ$309m is towards the top end of SKC's revised guidance range of NZ$300m–NZ$310m. 

SkyCity  - Setting Aside Some Chips — FY23 Preview

<ul><li>Casino operating environment shake-up a significant threat to earnings: Following a plethora of investigations that uncovered systematic wrongdoing across Australian casinos, empowered lawmakers and regulators have used the aftermath to fundamentally reshape the gambling industry across the Tasman</li><li>Valid argument for gaming tax rate increase in NZ: We see reasonable scope for New Zealand gaming tax rates to increase over the medium-term.</li><li>Impact from regulatory changes difficult to mitigate: There is likely to be limited steps SKC can take to mitigate the impact of regulatory or tax rate changes on its earnings. </li></ul>

Casino operating environment shake-up a significant threat to earnings: Following a plethora of investigations that uncovered systematic wrongdoing across Australian casinos, empowered lawmakers and regulators have used the aftermath to fundamentally reshape the gambling industry across the TasmanValid argument for gaming tax rate increase in NZ: We see reasonable scope for New Zealand gaming tax rates to increase over the medium-term.Impact from regulatory changes difficult to mitigate: There is likely to be limited steps SKC can take to mitigate the impact of regulatory or tax rate changes on its earnings. 

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 - Gambling on a Change of Government

We expect SkyCity (SKC) would be a beneficiary of the National Party's (National) policy to regulate online casino operators from the beginning of...

Forsyth Barr

SkyCity - Regulatory Risk Eating More Chips

The Department of Internal Affairs (DIA) is making an application to the Gambling Commission to temporarily suspend SkyCity’s (SKC) NZ casino license.

Forsyth Barr

SkyCity - FY23 Result — A Waiting Game

One offs late in the year lifted FY23 EBITDA to the top end of SKC’s guidance range, driven by a strong performance from the Auckland property.

Forsyth Barr

SkyCity - Setting Aside Some Chips — FY23 Preview

We expect strong Electronic Gaming Machine (EGM) revenue in New Zealand will have offset the continued sluggish recovery in Adelaide

Forsyth Barr

SkyCity: Regulatory Roulette

SkyCity's (SKC) current PE relative discount to the domestic market appears fair given the size and extent of the regulatory challenges it faces in...

Forsyth Barr

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