SkyCity Entertainment Group Limited

FY26 underlying EBITDA was $181.6 million, down 22.3% or $52.1 million year on year, and within the updated guidance given in May. Reported EBITDA was $120.5 million, down 44.2% or $95.6 million year on year, due to significant accounting adjustments. Revenue was flat year on year; total gaming revenue fell 5.9% or $34.7 million, while non-gaming revenue rose on the NZICC opening plus hotel and F&B growth. Management said March and April were hit by the Middle East conflict and higher fuel prices, with an estimated $20 million EBITDA impact in Q4 FY26 versus Q3. For FY27, no earnings guidance was provided; capex is expected to be $80 million to $100 million excluding online license costs, and management said the online market should open by 1 June 2027. The company expects gross asset-sale proceeds of $275 million to $300 million by December 2026, has sold Auckland commercial properties for $74.5 million, and expects debt-to-EBITDA to be below 2x by the end of FY27 after asset sales, before any online license spending.

Jason Walbridge framed FY27 as a reset year focused on repairing the balance sheet, simplifying the operating model, resolving Adelaide, and preparing for online gaming. He said the company is seeing structural change in land-based gambling and wants to be positioned for both physical and online franchises in New Zealand. His tone was pragmatic but constructive: he highlighted improving NZICC traffic, progress on asset sales, and said these priorities provide a pathway to sustainable earnings growth, though he emphasized discipline and did not provide FY27 earnings guidance.

Blair Woodbury emphasized that the $181.6 million underlying EBITDA was delivered despite a tougher second half, and he walked through the major below-the-line items: a $32.5 million tax expense from derecognizing tax assets, a NZ$52.2 million write-down of Adelaide, a $23.9 million provision for the AUD 21 million CBS fine, $10.3 million and $6.1 million impairments tied to the Auckland property sale, and a $55.3 million foreign currency translation release on disposed offshore entities. He said debt-to-EBITDA covenant leverage is 3.1x, cash and liquidity include $84 million of cash and $30 million on term deposit, and post-bond repayment liquidity is expected to be $186 million. He also said FY27 capex should be $80 million to $100 million, current banking facilities were refinanced with $140 million extended to September 2029, and the company pays no dividend in FY26.

Analysts focused on how much earnings the asset sales remove, how the $30 million cost-out target breaks down, the potential cost and returns of online licenses, and whether Auckland margins can recover after Carded Play, fuel-price weakness, and NZICC ramp-up. Management said the Grand Hotel is the main asset-sale EBITDA contributor at a high single-digit annualized impact, while the commercial properties were only about $1 million to $2 million of EBITDA. On online, SkyCity said license pricing is still unknown, the auction will determine the cost, and it has not committed to a specific number of licenses; it is modeling scenarios and will only invest if returns clear its cost of capital. On Auckland, management said the weakness came mainly from lower visit frequency in mass gaming, not lower spend per visit, and expects margin improvement as NZICC events build and the precinct benefits from CRL and other initiatives.