Artwork on the New Zealand International Convention Centre with Auckland's Sky Tower in the background, seen one morning earlier this month. Photo / Michael Craig
Shareholders voiced anger at today’s annual SkyCity Entertainment Group shareholder meeting, raising concerns about a string of compliance proceedings, actions and investigations which hit the company.
Beryl Plimmer of the NZ Shareholders’ Association said the way this had been presented at today’s meeting, referred to as historical, made it sound like these had occurred last century but that was untrue.
Chairman Julian Cook agreed the action was not in the last century but more recent and he particularly referred to SkyCity’s Adelaide casino operation.
The company was in a much better position for compliance now “but we still have gaps. We have transformational programmes for a reason. The investigation in relation to Adelaide commenced in 2022 so that’s not a new investigation but it’s taking its time to do its work and probably to look at the programme of work we now have in place in Adelaide”, Cook said.
Another shareholder said the company had been mismanaged, asked about directors’ accountability given regulators’ actions and referred to the board’s responsibility rather than the shareholders’, to meet legal and compliance obligations.
Cook said those questions were relevant and he referred to the refreshed board and changes within the business to meet obligations.
SkyCity’s historical performance meeting its regulatory obligations “is clearly not acceptable”, he said.
He summarised compliance and legal action lately as:
A shareholder asked whether the auditors identified money laundering and other non-compliance issues.
Cook said PwC auditors provided a financial record. Issues complying with anti-money laundering law and non-compliance were not part of that audit role, he said.
Shareholder Coralie van Camp said she understood why the Adelaide casino would become cash-less, “with all those wet notes” handed in.
Cook acknowledged SkyCity had allowed in people who should not have been at that casino.
Cook outlined changes so the company complied with the law. That included enhancement and investments in SkyCity’s financial anti-crime, risk, compliance and host responsibility teams.
Next year, the company will make carded play mandatory, moving away from cash payments.
“If a customer plays for too long, quite simply their card will be disabled,” Cook reassured shareholders.
The group hosts more than 7 million visitors annually, he said, referring to all its operations.
The company gave a trading update and outlook for the June 30, 2025 year.
The economic environment was challenging with interest rate cuts potentially providing some relief.
But the company expected tough conditions to continue into 2025, with consumer discretionary spend forecast to be subdued initially, with the outlook improving in the second half. Underlying group ebitda of between $245m and $265m was expected.
New CEO Jason Walbridge told shareholders the NZ International Convention Centre was “expected to be completed in 2025″ and would be transformational as an infrastructure asset.
Walbridge referred to a multi-year transformational programme, changing the internal culture of the business so obligations were met and safety was ensured.
The change to eliminate cash and move to 100% carded play would have an initial impact on uncarded revenue of 15% to 20%, he forecast.
Chief operating officer Callum Mallett said Auckland hotel occupancy rose from 80% in 2023 to 85% in 2024. The NZICC would bring more than 30,000 overseas visits annually to Auckland.
A video showed the main exhibition hall, which he said was the size of Eden Park. The 6700sq m space could be booked for a single exhibition but also had walls to divide that area in 16 separate configurations.
A 3200-person seated dinner could be hosted at the new venue, Mallett said.
That had never been possible in Auckland. Motorised retractable seating meant tiered spaces could be converted into a flat-floor areas.
The company made a $143.3m reported net loss after tax for the year to June 30, 2024, citing a tough operating environment and with Walbridge referring to “a very challenging financial year”.
A soft economy, cost-of-living pressures here and in Australia and various regulatory matters had impacted the business.
Group revenue rose 0.3% to more than $900m and underlying group net profit after tax was $123.12m.
That was down due to accounting adjustments including an A$86.2m impairment on SkyCity Adelaide and a $129.6m tax adjustment after tax law changes here, flagged to the market this month.
The company has suspended dividend payments until 2026.
Walbridge replaced Michael Ahearne at the company which has confirmed previous FY25 earnings guidance of underlying group Ebidta of between $245m and $265m and no dividend expected for FY25.
Last month, the company agreed to shut for a week after a deal with the Department of Internal Affairs for breaching its own host responsibility programme.
A gambler at SkyCity Casino in Auckland spent more than nine hours continuously playing pokies without any interaction with staff and there were 23 occasions when he played uninterrupted for several hours.
The Auckland casino was shut from from Monday, September 9 to Friday, September 13.
The business, which has suspended dividends, employs more than 4500 people here and in Australia.
Shares have been trading down a quarter annually around $1.37.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.