Why SkyCity’s FY25 Decline Sets the Stage for a Strategic Rebound
SkyCity Entertainment Group reported a decline in FY25 revenue and earnings but remains confident in its FY26 outlook, underpinned by cost savings and strategic initiatives.
- FY25 underlying NPAT down 42% to $71.5 million
- Reported revenue fell 11.1% to $825.2 million
- Three-year strategy focuses on customer experience and online gaming leadership
- FY26 EBITDA guidance set at $190-210 million with $10 million cost savings target
- Board re-elected two directors and approved auditor remuneration
FY25 Financial Performance
SkyCity Entertainment Group’s 2025 Annual Meeting revealed a challenging year with reported revenue declining by 11.1% to $825.2 million and underlying net profit after tax (NPAT) plunging 42% to $71.5 million. The company’s underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) also fell 15.9% to $233.7 million after adjusting for one-off B3 costs. Despite these setbacks, visitation numbers remained resilient, with total visits exceeding 10.5 million, a modest 4.5% increase year-on-year.
Strategic Outlook and Transformation
Looking beyond the numbers, SkyCity outlined a clear three-year strategy centred on delivering connected experiences for customers, optimising its core business, and establishing market leadership in New Zealand’s burgeoning online gaming sector. Key projects include the on-track opening of the New Zealand International Convention Centre (NZICC) in February 2026 and ongoing transformation programmes aimed at modernising operations and enhancing customer engagement.
Capital and Governance Updates
The meeting also addressed governance matters, with shareholders endorsing the re-election of directors Kate Hughes and Glenn Davis, both appointed in 2022 and integral to risk, compliance, and transformation oversight. PricewaterhouseCoopers was reappointed as auditor, with remuneration approved. Additionally, the company highlighted an equity raise completed during the year, supporting capital discipline amid ongoing investments and debt management, with net debt reported at $757 million and a net debt to EBITDA ratio of 3.1 times.
FY26 Guidance and Market Position
SkyCity’s management reaffirmed FY26 earnings guidance, targeting underlying EBITDA between $190 million and $210 million. This outlook is supported by cost optimisation initiatives aiming to save at least $10 million and a steady trading environment with no significant changes in New Zealand consumer discretionary spending. The company is also preparing for the launch of online casino gambling, pending regulatory approval, which could unlock new revenue streams and market opportunities.
Community and Regional Highlights
On the community front, SkyCity reported $3.1 million in grants distributed to 119 organisations, reflecting its ongoing commitment to social responsibility. Regionally, the company’s operations showed mixed results, with Auckland and Hamilton/Queenstown sites maintaining relative stability, while Adelaide’s B3 programme continues to impact earnings negatively. The Malta operation also experienced a significant revenue decline, underscoring the need for strategic focus on core markets.
Bottom Line?
SkyCity faces a pivotal year balancing recovery efforts with strategic growth, as FY26 guidance offers cautious optimism amid ongoing industry headwinds.
Questions in the middle?
- How will SkyCity’s online gaming licence application progress and impact future revenues?
- What are the detailed terms and investor implications of the recent equity raise?
- How will the NZICC opening influence visitation and earnings in FY26 and beyond?
