SkyCity Entertainment reported on a difficult 12 months, but said it was well on the road to recovery after initiating various actions. In particular, the company is taking actions against assets that are not performing and some may be sold off.
The most radicalaction involves sacking 230 staff as part of envisaged savings of $33 million. This is all a relatively quick fix to get the profit up and restore operating margins that were allowed to deteriorate during years when expansion was the main goal and involved acquisition of some underperforming operations.
It all came to a head in the six months to last December 30, when SkyCity reported a $45 million net profit, down 23 per cent on the previous comparable period. The biggest problem is underperformance in the Auckland casino. The casino's gaming environment is not up to the standard of its Australian counterparts, but an extensive refurbishment is being undertaken to fix that.
Select Harvests
Select Harvests has been an extremely good investment over the past six years, gaining some 500 per cent in value. But then it went into a steep dive that lasted most of last year and seems only now to be ending.
Select Harvests is a global almond distributor, managing approximately 60 per cent of Australia's almond crop. It manages 25,000 acres of almond orchards on its own behalf or those of external investors. It exports approximately 40 per cent of almond production to a range of countries.
But then came the drought in Victoria, where Select Harvests is based, and there seemed a real threat to its entire operation. The company put out a detailed technical statement on its water management which seemed to imply it is in a far better position toget a water allocation than most of the other farmers in the area. Butthe share crashed, starting to recover only when the rains came lastweek.
* Views expressed in this article are those of IRG, not the Weekend Herald
