Today's announcement is an advancement on last October's SkyCity AGM, where chief executive Graeme Stephens said the business was looking to "do more" in Queenstown, particularly to cater for international business.
"We think it needs one [hotel]," Stephens said.
The business has extended its lease on its casino in Queenstown by three years. The lease was due to come up for renewal this year.
Today's presentation told how SkyCity now wanted to diversify its business and make more money out of high-yielding activity,
Currently, a massive 70 per cent of group EBITDA in the 2018 financial year came from Auckland and 38 per cent of its business activity revenue came from pokies, today's presentation showed.
Under the headline strategy, SkyCity said its aim was to "improve our operating performance, optimise our existing portfolio, grow and diversify our business".
In Auckland, carparks are being sold and that money will go into accommodation and hotel developments, the company has previously indicated.
SkyCity has listed its long-term value aim to "allocate capital to higher returning assets and businesses".
Soft outlook
SkyCity also updated the market on its trading outlook, lowering its full-year guidance slightly after year-to-date trading was softer than expected and after the earlier settlement of the Darwin casino sale.
The casino operator now expects its normalised earnings before interest, tax, depreciation and amortisation for the year ending June 30 to be flat on the previous year.
This contrasts with a prior forecast for 5 percent growth when it announced its first half result in February. That earlier forecast was based on the A$188 million sale of its Darwin casino to US hospitality company Delaware North settling on June 30. The sale, however, was completed on April 4.
Sky also said it expects its group normalised net profit to be slightly below the prior year, rather than slightly above, as it had forecast previously. This reflects an increase in the effective tax rate that will have a $6 million impact, it said.
In the year-to-date to April 28 it said its group normalised revenue was up 4 per cent on the same period a year earlier while domestic revenue, excluding its international business, was flat. The group reported revenue was down 2 percent on the same period due to a low international business win rate.
Regarding its different markets, it said year-to-date revenue was slightly higher in Auckland and stable in Hamilton. In Australia, it pointed to weaker revenue performance in Adelaide due to increased disruption from construction works.
Performance in the now sold Darwin casino was slightly below expectations due to ongoing challenging conditions.
In its international business, it still expects to achieve turnover of around $13 billion to $14 billion in the full year.
Shane Solly of Harbour Asset Management said: "Weaker Adelaide due to disruption and slightly weaker Auckland trading seem to be holding profit growth back."
The revised guidance was flat, Solly said, so the market may see a modest earnings downgrades in the stock.
The stock closed yesterday at $4.08 and has fallen 34 percent so far this year.
- Additional reporting: BusinessDesk
