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>The Department of Internal Affairs (DIA), NZ’s gambling regulator, intends to commence civil penalty proceedings against SkyCity (SKC) due to its alleged non-compliance with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act). </li><li>This is similar to the action taken by AUSTRAC (the Australian financial crimes regulator) against SkyCity Adelaide and other Australian casinos over the past couple of years.</li><li>The maximum penalty that SKC faces is just NZ$8m (amounting to 1c per share). This is tiny in the context of SKC’s current regulatory discount implied in its share price. </li></ul>

The Department of Internal Affairs (DIA), NZ’s gambling regulator, intends to commence civil penalty proceedings against SkyCity (SKC) due to its alleged non-compliance with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act). This is similar to the action taken by AUSTRAC (the Australian financial crimes regulator) against SkyCity Adelaide and other Australian casinos over the past couple of years.The maximum penalty that SKC faces is just NZ$8m (amounting to 1c per share). This is tiny in the context of SKC’s current regulatory discount implied in its share price. 

<ul><li>SkyCity (SKC) and the AUSTRAC (Australian Transaction Reports and Analysis Centre) have agreed SKC will pay a fine of ~A$67m due to its alleged contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act) at its Adelaide casino.</li><li>After almost three years of enhanced regulatory scrutiny, the announcement is a positive outcome for SKC with the fine modestly lower than our expectations, though other regulatory risks with potentially larger valuation implications remain. Retain NEUTRAL.</li><li>SKC's total provision for the AUSTRAC fine and associated cost is A$73m. Assuming ~A$6m of legal costs (SKC is required to pay for AUSTRAC's as well as its own), the fine amounts to ~A$67m</li></ul>

SkyCity (SKC) and the AUSTRAC (Australian Transaction Reports and Analysis Centre) have agreed SKC will pay a fine of ~A$67m due to its alleged contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act) at its Adelaide casino.After almost three years of enhanced regulatory scrutiny, the announcement is a positive outcome for SKC with the fine modestly lower than our expectations, though other regulatory risks with potentially larger valuation implications remain. Retain NEUTRAL.SKC's total provision for the AUSTRAC fine and associated cost is A$73m. Assuming ~A$6m of legal costs (SKC is required to pay for AUSTRAC's as well as its own), the fine amounts to ~A$67m

SkyCity - Light Peeks Through Regulatory Clouds in Sky

<ul><li>SkyCity's (SKC) historically defensive and resilient gaming earnings are beginning to show cracks from the weakening consumer environment in New Zealand and Australia.</li><li>The company now expects EBITDA to decline year-on-year in FY24, a change from its prior guidance of a modest increase.</li><li>The impact on NPAT from a reduction in gaming revenue is partially mitigated by lower than expected interest costs. </li></ul>

SkyCity's (SKC) historically defensive and resilient gaming earnings are beginning to show cracks from the weakening consumer environment in New Zealand and Australia.The company now expects EBITDA to decline year-on-year in FY24, a change from its prior guidance of a modest increase.The impact on NPAT from a reduction in gaming revenue is partially mitigated by lower than expected interest costs. 

SkyCity - Taking Some Chips Off the Table

<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

New Zealand

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 NZ)

SkyCity - DIA No Longer MIA

The Department of Internal Affairs (DIA), NZ’s gambling regulator, intends to commence civil penalty proceedings against SkyCity (SKC) due to its...

Forsyth Barr

SkyCity - Light Peeks Through Regulatory Clouds in Sky

SKC's total provision for the AUSTRAC fine and associated cost is A$73m. Assuming ~A$6m of legal costs (SKC is required to pay for AUSTRAC's as...

Forsyth Barr

SkyCity - Taking Some Chips Off the Table

SkyCity's (SKC) historically defensive and resilient gaming earnings are beginning to show cracks from the weakening consumer environment in...

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

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