Despite pushback from major shareholders, SkyCity Entertainment Group is pushing ahead with a NZ$240 million ($140 million) equity raise, even amongst improvements in EBITDA and profit.
In a Thursday release, the company’s CEO Jason Walbridge noted that “Our announcement today, to raise NZ$240m of equity, will improve our financial stability in the current market conditions and provide us with the right foundations to step prudently into the opportunities that are ahead of us. We know what we need to do and we’re leaning into it”.
SkyCity’s largest shareholder had reportedly rejected plans for the equity raise, calling it “ludicrous”.
The new scheme encompasses the issuing of 343 million new shares, amounting to approximately 45.1 percent of the existing shares on issue. The new shares ‘will rank equally in all respects with SkyCity’s existing ordinary shares’.
The equity raising is split between an NZ$81 million ($47.21 million) placement to eligible investors and a NZ$159 million ($92.67 million) entitlement offer.
Aside from the equity raising, SkyCity is also targeting asset monetization, with an expected NZ$200 million ($116.56 million) to be released ‘over the next 12-18 months’. These include the sale of an office building and potentially its Auckland carpark concession.
Financial year results
In results released on Thursday, the group noted that it saw a 5 percent drop in group revenue, to NZ$825.2 million ($480.93 million), due to ‘lower spend per visit and higher VIP customer churn in Adelaide’.
Group EBITDA rose by a significant 56.4 percent yearly to NZ$216.1 million ($125.94 million), in large part due to a NZ$139 million ($81 million) significant one-off item in fiscal 2024.
The group managed to reverse a loss of NZ$143.3 million ($83.52 million) in fiscal 2024 to a profit of NZ$29.2 million ($17 million), despite a AU$27.3 million ($15.9 million) impact due from the settlement related to SkyCity Adelaide.
Speaking of the results, Walbridge noted that “Our financial results reflect the difficult operating environment we’ve navigated in FY25. The delayed economic recovery in New Zealand has led to lower discretionary spend impacting our business and that has come through the same time as a period of elevated investment”.
This investment is expected to pay off however, with the New Zealand International Convention Center (NZICC) ‘on track to open in February 2026’, precluded by a ‘solid pre-opening pipeline of events’.
The group was also highly content to note that its suitability to continue to operate SkyCity Adelaide was confirmed via Independent Review, and that its Carded Play was live across all of its New Zealand sites.
Outlook
Looking ahead, Walbridge notes that “We expect overall market conditions will continue to be challenging in the short term. This continues to be a challenge for us as the ongoing delay in the economic recovery in New Zealand comes at the same time as elevated costs related to upgrading our regulatory systems and B3 program, pre-opening costs for NZICC in February and the expected launch of regulated online casino gaming in winter 2026”.
This places expectations for underlying EBITDA to be within the range of NZ$190-210 million ($110.7-122.4 million), with capex to be about NZ$116 million ($67.7 million) in fiscal 2026.
“Looking to FY27, we expect earnings to improve with NZICC expected to be breakeven on a stand-alone basis and the regulated online gaming business targeted to deliver breakeven in the first year of operation in FY27,” noted the CEO.
