Why Skycity Might Soon Suspend Dividends And Raise New Capital
SkyCity Entertainment Group has suffered a $1 billion hit to its NZX market capitalisation from Covid-19 and might soon suspend dividends and raise new capital, an analyst says. Chelsea Leadbetter, of Forsyth Barr equity research, said that although the business was strong, the pandemic had dealt it a major financial blow and shareholders could soon feel the effects. "SkyCity's market capitalisation has fallen by around $1b since the Covid-19 outbreak took hold in China. While we acknowledge material near-term risks, this is substantially larger than our various scenarios of the risk/cashflow impact," she wrote in the latest update on the stock. Under the Work and Income wage subsidy scheme, SkyCity Management got $21.7m for 3272 employees, as of May 3. Leadbetter said: "We expect the key near-term causality for investors to be a temporary dividend suspension." She forecast that no dividends would be paid from the second half of the 2020 financial year or the first half of the 2021 financial year. Like many others, the company might seek new cash: "There is also a possibility the board decides to raise equity to shore up the balance sheet through this period of heightened uncertainty." https://preview.redd.it/h7s44gyeetx41.jpg?width=620&format=pjpg&auto=webp&s=35b0e71170888462789b1d0632401b671a6840bd SkyCity is today trading on the NZX around $2.45, down from more than $4 late last year. Today its market capitalisation stood at $1.6b. Questions were today put to chief executive Graeme Stephens and chief marketing officer Liza McNally about the fall in the company's market capitalisation, the possibility of suspending dividends and raising new capital. McNally said: "As previously disclosed, SkyCity currently has sufficient liquidity, and has already implemented a range of changes to reduce both operating costs and capital expenditure, to withstand the short term impact of Covid-19. The board and management are continuing to evaluate SkyCity's longer term funding requirements and a range of options for satisfying these." Leadbetter noted property assets of around $2b and long-term monopoly casino licences. "However, like the majority of businesses it has been caught out by extraordinary circumstances. Forecasting earnings is near impossible in the near-term. However, when we are out the other side of Covid-19 we expect gaming spend to recover which will improve Ebitda, gearing, and enable reinstatement of what was an attractive dividend," she said. Early last month, SkyCity announced that about 200 staff would be made redundant and wages were cut by 20 per cent to cope with the pandemic's effects on the business. Last Friday, SkyCity said all its properties here and in South Australia remained shut at level 3 alert but construction work banned under the almost five weeks of level 4 had resumed. https://preview.redd.it/dkpp4jhoetx41.jpg?width=620&format=pjpg&auto=webp&s=33ece761c2e25d269361b8ac81204ba553c2a21d That re-started: • Work at the fire-hit NZ International Convention Centre and neighbouring Horizon Hotel in Auckland • Refurbishment of premium gaming rooms on levels eight and nine of the Auckland casino • New food and beverage venues Food Republic adjacent to the main casino floor in Auckland • Work on Aces Bar and creation of a new entertainment zone on the main casino floor in Auckland • Ongoing refurbishment and maintenance works on the AA Building where the business is now headquartered on Albert St • Refurbishment of Hamilton's main casino floor, including a new Baccarat area • Work on the development of the All Blacks Experience and Weta Workshop attractions in Auckland's former convention centre below the SkyCity Grand Hotel SkyCity also gave an update on its funding position, saying it continued to have a strong liquidity position with about $400m cash and undrawn debt facilities available. It does not expect to need any waivers for its June 30 debt covenants. "Following recent restructuring initiatives, SkyCity's operating cash requirements before re-opening any properties are around $12m per month. SkyCity also has significant ongoing capital expenditure commitments on its two major projects and other smaller development projects in Auckland and Hamilton," it said, referring to its $703m convention centre and $330m Adelaide redevelopment and expansion. The business is working on a funding plan for the medium term as it recovers. "This plan will be finalised once the trading performance of its New Zealand properties has been assessed following the expected re-openings by the end of May," the business said on May 1. Leadbetter said when New Zealand moves to level 2, most SkyCity properties will be re-opened but with significant restrictions. At level 1, all facilities will be back open, without restrictions. Source: By: Anne Gibson / Property editor, NZ Herald P.S. 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Kia Ora Redditors, I have gone through and analysed wide economic Moat companies listed on NZX. Hope the below helps to narrow down your choices in your investment journey.
Wide Moat, what is that ? Before starting this blog post please read this wide moat businesses explanation here Okay, now that we are up to speed, before you invest in any wide moat company you need to ensure financials of the business are solid as well, I’ll cover the topic of How to understand the financials of the business in the upcoming blogs so subscribe (here) to know when the blog is out. Let’s see if we can spot any wide moat business listed on NZX.
Auckland International Airport Limited (NZE: AIA)
Auckland International airport holds a virtual monopoly as the largest airport in NZ and processes the most number of passengers. This is located in the largest city in NZ as well, making it an ideal destination for travelers, With travelers expected to increase in the coming decades, you can clearly see the wide moat around this business.
WILL THE MOAT SHRINK IN THE NEAR FUTURE ?
The likely hood of the moat shrinking is very low since construction of another international airport in Auckland is highly unlikely. Thing to look out for is debt, since airport need vast amounts of money for up keep and improvements( ex: loss of unnecessary capital due to project over runs and delays). Read a more in depth analysis on Auckland International Airport here
Chorus Limited (NS) - (NZE: CNU)
Chorus manages and builds telecommunications infrastructure in NZ, for ex: when ever you sign up for fiber broadband plan with your ISP, Chorus is contracted to install the connections to your house. As copper cables are replaced by fiber optic cables around NZ, the cost of maintaining these new infrastructure grids are less than before.( Fiber vs Copper wiring: cost of copper and fiber optic cables are stronger requiring less maintenance).
WILL THE MOAT SHRINK IN THE NEAR FUTURE ?
I don’t think the moat will shrink in the near future as setting up a telecom infrastructure company with years of know how is quite difficult, the only way I can see this moat shrinking is if international companies what a piece of NZ infrastructure, but I don’t think the government would allow key infrastructure projects to be outsourced.
NZME Limited (NZE: NZM)
NZME is a New Zealand media company which owns brands such as:
NZ herald
Newstalk ZB
ZM
The Hits
Grab one etc…..
The moat exists but it is a very small one, this moat would have been huge during the hay day of print newspaper readership. So what has happened here ? Internet…. Print newspaper is virtually dead, newspapers all around the world are struggling to make money as subscribers dwindle. Due to the drop in readership, less and less ads are placed in the newspaper hence lower revenue. All the eye balls have moved to “ Social Media”, that’s where the ads are now a days. The only saving light I can see is Grab One, the popular coupon site in NZ. I do believe this will provide a strong source of revenue to the company but I am not sure if this can offset the losses in the other divisions.
The New Zealand Refining Company Limited (NZE: NZR)
Refining NZ is New Zealand’s only oil refinery and the leading supplier of refined petroleum products to the New Zealand market, including petrol, diesel, aviation fuel and other products As a critical piece of national energy infrastructure, Refining NZ is responsible for supplying:
around 85% country’s jet fuel
around 67% of diesel
around 58% of all petrol
between 75 and 85% of bitumen for roading
all fuel oil for ships
sulphur for farm fertilizer
CO2 for the carbonated drinks industry
Moat exists because this is the only oil refinery in New Zealand, It also suppliers around 85% of NZ’s aviation fuel. I believe the number of travelers to New Zealand will only increase, Provide refining NZ a solid moat, however as electric cars are bound to make in roads in New Zealand, the demand for petrol and diesel will gradually decrease. So we need to keep an eye out on the financial performance on an annual basis to make sure the business can still maintain the moat.
Port of Tauranga Limited (NS) (NZE: POT)
The Port of Tauranga Located Tauranga (about 200 km away from Auckland) is the largest port in New Zealand in terms of total cargo volume, and the second largest in terms of container throughput. Total exports: 📷 Total Exports from POT As you can see the number of tonnes being exported from port of Tauranga is increasing. Total imports: 📷 Total Imports from POT As you can see the number of tonnes being imported from port of Tauranga is increasing as well. I see this trend continuing as the demand for NZ products especially in emerging markets increases and demand for imports increases as NZ population continues to grow. So the Moat around POT should be in tact for many years to come.
Restaurant Brands New Zealand Limited (NZE: RBD)
Restaurant Brands operates the New Zealand franchises for KFC, Pizza Hut and Carl's Jr. It also operate a KFC franchise in New South Wales, Australia and Taco Bell and Pizza Hut franchise in Hawaii, Guam and Saipan. As of October 2018, Restaurant Brands has 261 stores: 94 KFC New Zealand, 61 KFC Australia 29 Pizza Hut New Zealand, 18 Carl's Jr., 36 Taco Bell Hawaii and 45 Pizza Hut Hawaii stores. It employs nearly 8,000 staff across New Zealand, Australia and Hawaii and serves 120,000 customers worldwide every day. Since RBD operates the NZ franchises for KFC, Pizza Hut and Carl’s Jr and if you wanted to be a franchisee in NZ then you would have to go through them , this gives RBD an economic moat. Will the moat shrink in the near future ? I think the moat will certainly shrink, this is due to the fact that many people are moving away from processed foods to more organic and more healthier options, this will cause sales in fast foods such as KFC, Pizza hut etc to shrink, which in turn means less new franchises opening up. There might even be closures around the corner. So I see the moat being broken pretty soon in the years to come.
SKYCITY Entertainment Group Limited (NS) (NZE: SKC)
SKYCITY Entertainment Group Limited is New Zealand’s largest tourism, leisure and entertainment company. It is one of three major publicly listed casino operators in Australasia. It has entertainment complexes in:
Auckland
Hamilton
Queenstown
Adelaide
Darwin
SkyCity also owns one of Auckland’s best know attractions “Sky Tower”. Although the revenue generated from sky tower to the overall business is small, it is still a jewel in the sky city crown. Will the moat shrink in the near future ? Considering SKC is New Zealand’s largest tourism, leisure and entertainment company, it has all the basis covered for tourists that enter into NZ. It also has large convention centers where numerous conferences are held, I don’t see the moat shrinking any time soon. As they in casino lingo “ House always wins”.
South Port New Zealand Limited (NS) ( NZE: SPN)
SPN is the southern most commercial port in NZ located at Bluff. It is situated in the highly productive province of Southland which is responsible for producing a sizeable proportion of New Zealand’s total exports by value. The region’s major exporters are all situated within 80km of the port. All the moat characteristics explained for Port of Tauranga (POT) exist here as well.
Trade Me Group Limited (NZE: TME)
Trade me is the largest internet auction website in NZ. It has Trade me property, motors, jobs etc. Trade me had held a monopoly on internet auctions for quite some time in NZ, but it’s moat has been slowly eroding away, how ? Trade me jobs is competing against Seek, LinkedIn Trade me property is competing against realestate.co.nz, oneroof etc. Trade me market place is competing against Facebook marketplace. Looking at all the competitions trade me is facing it seems quite difficult to hold down the moat in the future.
Vector Limited (NZE: VCT)
Vector is New Zealand's largest distributor of electricity and gas, owning and operating networks which span the Auckland region.This distribution system gives Vector an economic moat. Vector has been involved in electrification projects - charging stations for electric cars, which I think is great for future growth. As number of electric cars increase, there will definitely be a need for more and more charging stations which vector can deliver. The moat seems to be very much intact.
Kia Ora Redditors, I have gone through and analysed wide economic Moat companies listed on NZX. Hope the below helps to narrow down your choices in your investment journey.
Wide Moat, what is that ? Before starting this blog post please read this wide moat businesses explanation here Okay, now that we are up to speed, before you invest in any wide moat company you need to ensure financials of the business are solid as well, I’ll cover the topic of How to understand the financials of the business in the upcoming blogs so subscribe (here) to know when the blog is out. Let’s see if we can spot any wide moat business listed on NZX.
Auckland International Airport Limited (NZE: AIA)
Auckland International airport holds a virtual monopoly as the largest airport in NZ and processes the most number of passengers. This is located in the largest city in NZ as well, making it an ideal destination for travelers, With travelers expected to increase in the coming decades, you can clearly see the wide moat around this business.
WILL THE MOAT SHRINK IN THE NEAR FUTURE ?
The likely hood of the moat shrinking is very low since construction of another international airport in Auckland is highly unlikely. Thing to look out for is debt, since airport need vast amounts of money for up keep and improvements( ex: loss of unnecessary capital due to project over runs and delays). Read a more in depth analysis on Auckland International Airport here
Chorus Limited (NS) - (NZE: CNU)
Chorus manages and builds telecommunications infrastructure in NZ, for ex: when ever you sign up for fiber broadband plan with your ISP, Chorus is contracted to install the connections to your house. As copper cables are replaced by fiber optic cables around NZ, the cost of maintaining these new infrastructure grids are less than before.( Fiber vs Copper wiring: cost of copper and fiber optic cables are stronger requiring less maintenance).
WILL THE MOAT SHRINK IN THE NEAR FUTURE ?
I don’t think the moat will shrink in the near future as setting up a telecom infrastructure company with years of know how is quite difficult, the only way I can see this moat shrinking is if international companies what a piece of NZ infrastructure, but I don’t think the government would allow key infrastructure projects to be outsourced.
NZME Limited (NZE: NZM)
NZME is a New Zealand media company which owns brands such as:
NZ herald
Newstalk ZB
ZM
The Hits
Grab one etc…..
The moat exists but it is a very small one, this moat would have been huge during the hay day of print newspaper readership. So what has happened here ? Internet…. Print newspaper is virtually dead, newspapers all around the world are struggling to make money as subscribers dwindle. Due to the drop in readership, less and less ads are placed in the newspaper hence lower revenue. All the eye balls have moved to “ Social Media”, that’s where the ads are now a days. The only saving light I can see is Grab One, the popular coupon site in NZ. I do believe this will provide a strong source of revenue to the company but I am not sure if this can offset the losses in the other divisions.
The New Zealand Refining Company Limited (NZE: NZR)
Refining NZ is New Zealand’s only oil refinery and the leading supplier of refined petroleum products to the New Zealand market, including petrol, diesel, aviation fuel and other products As a critical piece of national energy infrastructure, Refining NZ is responsible for supplying:
around 85% country’s jet fuel
around 67% of diesel
around 58% of all petrol
between 75 and 85% of bitumen for roading
all fuel oil for ships
sulphur for farm fertilizer
CO2 for the carbonated drinks industry
Moat exists because this is the only oil refinery in New Zealand, It also suppliers around 85% of NZ’s aviation fuel. I believe the number of travelers to New Zealand will only increase, Provide refining NZ a solid moat, however as electric cars are bound to make in roads in New Zealand, the demand for petrol and diesel will gradually decrease. So we need to keep an eye out on the financial performance on an annual basis to make sure the business can still maintain the moat.
Port of Tauranga Limited (NS) (NZE: POT)
The Port of Tauranga Located Tauranga (about 200 km away from Auckland) is the largest port in New Zealand in terms of total cargo volume, and the second largest in terms of container throughput. Total exports: 📷 Total Exports from POT As you can see the number of tonnes being exported from port of Tauranga is increasing. Total imports: 📷 Total Imports from POT As you can see the number of tonnes being imported from port of Tauranga is increasing as well. I see this trend continuing as the demand for NZ products especially in emerging markets increases and demand for imports increases as NZ population continues to grow. So the Moat around POT should be in tact for many years to come.
Restaurant Brands New Zealand Limited (NZE: RBD)
Restaurant Brands operates the New Zealand franchises for KFC, Pizza Hut and Carl's Jr. It also operate a KFC franchise in New South Wales, Australia and Taco Bell and Pizza Hut franchise in Hawaii, Guam and Saipan. As of October 2018, Restaurant Brands has 261 stores: 94 KFC New Zealand, 61 KFC Australia 29 Pizza Hut New Zealand, 18 Carl's Jr., 36 Taco Bell Hawaii and 45 Pizza Hut Hawaii stores. It employs nearly 8,000 staff across New Zealand, Australia and Hawaii and serves 120,000 customers worldwide every day. Since RBD operates the NZ franchises for KFC, Pizza Hut and Carl’s Jr and if you wanted to be a franchisee in NZ then you would have to go through them , this gives RBD an economic moat. Will the moat shrink in the near future ? I think the moat will certainly shrink, this is due to the fact that many people are moving away from processed foods to more organic and more healthier options, this will cause sales in fast foods such as KFC, Pizza hut etc to shrink, which in turn means less new franchises opening up. There might even be closures around the corner. So I see the moat being broken pretty soon in the years to come.
SKYCITY Entertainment Group Limited (NS) (NZE: SKC)
SKYCITY Entertainment Group Limited is New Zealand’s largest tourism, leisure and entertainment company. It is one of three major publicly listed casino operators in Australasia. It has entertainment complexes in:
Auckland
Hamilton
Queenstown
Adelaide
Darwin
SkyCity also owns one of Auckland’s best know attractions “Sky Tower”. Although the revenue generated from sky tower to the overall business is small, it is still a jewel in the sky city crown. Will the moat shrink in the near future ? Considering SKC is New Zealand’s largest tourism, leisure and entertainment company, it has all the basis covered for tourists that enter into NZ. It also has large convention centers where numerous conferences are held, I don’t see the moat shrinking any time soon. As they in casino lingo “ House always wins”.
South Port New Zealand Limited (NS) ( NZE: SPN)
SPN is the southern most commercial port in NZ located at Bluff. It is situated in the highly productive province of Southland which is responsible for producing a sizeable proportion of New Zealand’s total exports by value. The region’s major exporters are all situated within 80km of the port. All the moat characteristics explained for Port of Tauranga (POT) exist here as well.
Trade Me Group Limited (NZE: TME)
Trade me is the largest internet auction website in NZ. It has Trade me property, motors, jobs etc. Trade me had held a monopoly on internet auctions for quite some time in NZ, but it’s moat has been slowly eroding away, how ? Trade me jobs is competing against Seek, LinkedIn Trade me property is competing against realestate.co.nz, oneroof etc. Trade me market place is competing against Facebook marketplace. Looking at all the competitions trade me is facing it seems quite difficult to hold down the moat in the future.
Vector Limited (NZE: VCT)
Vector is New Zealand's largest distributor of electricity and gas, owning and operating networks which span the Auckland region.This distribution system gives Vector an economic moat. Vector has been involved in electrification projects - charging stations for electric cars, which I think is great for future growth. As number of electric cars increase, there will definitely be a need for more and more charging stations which vector can deliver. The moat seems to be very much intact.
This will staff four new restaurants and two new bars. Reopening Adelaide Casino. SkyCity Entertainment officially unlocked the doors of its Adelaide Casino on June 29, 2020, after having closed on March 23 per the Australian government’s orders. The casino opening was a part of Stage Three of South Australia’s reopening plan. Game back on for SkyCity Adelaide 700 jobs at new casino restaurants – see what they’ll look like Check in for all rooms at the Eos will be 3pm, with checkout at 12 noon. [email protected] SkyCity Adelaide | 4,663 followers on LinkedIn. SkyCity's vision is to be the leader in gaming, entertainment and hospitality in our communities. #workyourmagic | SkyCity Entertainment Group is The SkyCity Adelaide expansion has commenced, transforming Adelaide Casino into an integrated entertainment destination on the Festival Plaza forecourt. signature restaurants Sean's Kitchen and Madame Hanoi will be joined by three new specialty restaurants. SkyCity releases new designs for $300 million redevelopment of Adelaide Casino. NEW $300 million Adelaide Casino expansion plans, centred on a luxury hotel, give the first detailed insight into Book your tickets online for SkyCity Adelaide, Adelaide: See 437 reviews, articles, and 108 photos of SkyCity Adelaide, ranked No.77 on Tripadvisor among 273 attractions in Adelaide. The new upgraded section of the SkyCity Adelaide casino has opened and it seems they’re letting all local media in except for us. Now, this could possibly be because we’re permanently banned from SkyCity for setting up an elaborate yet ultimately unsuccessful card counting operation on the $5 Pontoon table, but we feel this is unjust. Get ready for the glitz, the glamour and to splash some cash because South Australias new and improved SkyCity Adelaide Casino is on track to open within months — and is already taking bookings South Australia’s premiere entertainment destination located in Adelaide's historic Railway Station building. New casino players will Skycity Casino Adelaide receive a free real cash bonus whenever they play at a casino for real money. Casinos usually give out bonuses in the form of deposit matches usually. That means a certain percentage of your deposit is given in free money, so the bigger your deposit, the bigger your bonus.
Share your videos with friends, family, and the world Following the announcement from SKYCITY CEO Nigel Morrison and Premier Jay Wetherill on 19th December 2012, have a look at the exciting concept and plans for the Adelaide Casino revelopment. This is from 1990 The Adelaide Casino will be undergoing an unbelievable upgrade and you can check out the full story at Glam Adelaide (www.glamadelaide.com.au). We keep you u... Inside the Adelaide Casino's multi-million dollar riverbank development.The latest in 7NEWS at 4pm and 6pm.Subscribe to 7NEWS » https://7news.link/7NewsSubsc... About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features Press Copyright Contact us Creators ... This is the ad for the opening of the Adelaide Casino for Y&R. We had to shoot when the Casino was closed so we started at around 4am. We were meant to use a Louma crane to travel over the tables ... Our SkyCity Adelaide project continues to come together as the SHAPE SA Team put the brew tanks into position for the Pirate Life microbrewery which is accom... In November 2015, SKYCITY Entertainment Group released new images of how the development will look, including this video of the proposed plaza and interiors ...
