Empty table seats
INVESTOR PRESENTATION AND GUIDANCE UPDATE
Need To Know
- EBITDA downgraded ~2.4% due to slower Auckland operations
- Compliance costs expected to remain elevated for FY23e and FY24e
- Re-affirm BUY rating
Investment View
SKC released its investor presentation which highlighted a mild downgrade to group EBITDA due to ongoing softness in Auckland operations.
Normalised FY23 EBITDA Guidance has been updated to NZ$300-310m (NZ$305-320m prev), excluding the carpark earnings.
We note that slot volumes remained consistent throughout the period and tables were the larger contributor to the softer earnings.
Legal costs relating to the Adelaide regulatory review came in higher than expect and are expected to remain elevated throughout FY24e.
The termination of the Auckland carpark concession agreement continues to progress, settlement is now expected to slip into FY24.
We expect key risks over the next ~12 months will be the regulatory overhang, although we are at the view that it will eventually subside.
Despite this (and the minor downgrade), we remain confident in our BUY rating for SKC. We are looking through current market conditions toward a more normalised environment and believe SKC will benefit due to its monopolistic licenses.
We re-affirm our Buy rating.
Stock Overview
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Share Price
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Company Overview
SKC is a New Zealand-based integrated casino resort company. Its properties include Auckland, Adelaide, Hamilton and Queenstown.
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