New ventures cut back Skyline profit

Skyline's gondola system at Rotorua is one of the new ventures completed last year. Picture / Daily Post

Chairlift operator and casino owner Skyline Enterprises invested almost $19 million in two new ventures last year and delivered an after-tax full-year profit of $12 million, slightly down on the previous year's record profit.

In October last year the new almost $5 million Sentosa Island chairlift and luge in Singapore was opened, while in November Skyline's new $12 million eight-seat gondola and terminal complexes at Rotorua was commissioned, Skyline chairman Barry Thomas said.

"These have been two major projects and they have taken up a considerable amount of management and company resources," Thomas said.

Skyline's board has set aside $7.4 million for shareholder dividends, replicating last year's 22c per share payment. The company did not disclose its revenue.

Skyline operates on the Unlisted share market and its shares have been trading around $6 recently, after a gentle decline from a $7.20 high in July last year.

For the year to March, Skyline posted a before-tax profit of $16 million (compared with $17 million for the same period last year) an after-tax profit of $12 million ($13 million) and tax provisions of $4 million.

Thomas said Skyline's Dunedin Casino was "facing some new challenges, but management are addressing all the issues and progress will continue".

In April the Gambling Commission decided Dunedin Casino would have to face claims it failed to deal with an apparent gambling addict even before the new Gambling Act came into force.

The decision means the casino will become the first in the country to defend a Government application to suspend its licence for alleged breaches of the new legislation, in a hearing scheduled to begin in late July.

SkyCity Queenstown Casino was competing in the high-end gaming arena and had has its ups and downs, in that it attracted high-roller gamblers who could at times "win strongly".

"Reasonable returns are taking some time to manage," he said.

In July 2004 Skyline bought an eight-property Queenstown portfolio from an Asian-based owner at auction for, it was understood, between $58 million and $60 million.

Speculation the Queenstown apartment market was cooling would not affect Skyline's bottom line as its motels and apartments were in central locations, Thomas said.

Skyline's Sentosa Island project looked promising and after operating for only seven months the revenue and numbers were impressive, but Thomas said he did not have a projected return on the almost $5 million investment.

- OTAGO DAILY TIMES