Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


SkyCity dividend pledge means bigger second-half payment

SkyCity dividend pledge may chew through almost all second half profit as earnings fall

By Tina Morrison

Feb 19 (BusinessDesk) – SkyCity Entertainment Group’s pledge to maintain dividends at higher levels even as it spends on major developments may see the listed casino company pay out almost all of its second half profit to investors.

SkyCity, which has four casinos in New Zealand and two in Australia, increased its dividend policy last year to annual payments of not less than 20 cents a share and not less than 80 percent of normalised profit. Previously, dividends were cut to 60-70 percent of profits in 2009 in an attempt to reduce debt following the appointment of chief executive Nigel Morrison in 2008.

Based on current forecasts for weak profitability this financial year, the company is likely to pay out 97 percent of its second half earnings as dividends to shareholders, Arie Dekker, a research analyst at Craigs Investment Partners, said in a note to clients. Dekker expects second half profit will fall to $60 million from $66.4 million in the first half reflecting higher depreciation costs following increased capital spending. In the first half, SkyCity paid 10 cents a share in dividends, representing 87 percent of earnings.

“The shift in dividend policy to a minimum of 20 cents per share was put in place to provide investors with some certainty ahead of the major development expenditure,” Dekker said. “As it turns out, while that expenditure is yet to commence in full; the very strong NZ$/A$ and ongoing mixed performance across the group means that the payout ratio in FY14 will be above 90 percent.”

Dekker expects $200 million of capital spending in 2014, slowing to $150 million in 2015 and ramping up again to $235 million in 2016.

Auckland-based SkyCity wasn’t immediately able to say if the company had previously paid a higher ratio of dividends.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news