You are using an older browser version. Please use a supported version for the best MSN experience.

SkyCity (ASX:SKC) share price on watch after FY 2021 guidance update

The Motley Fool logo The Motley Fool 4 days ago James Mickleboro
a close up of a machine: gaming asx share price rise represented by slot machine paying jackpot © Provided by The Motley Fool gaming asx share price rise represented by slot machine paying jackpot

The SKYCITY Entertainment Group Limited (ASX: SKC) share price will be one to watch on Friday.

This follows the release of an update in relation to the casino and resort operator’s earnings guidance for FY 2021.

What did SkyCity announce?

This morning SkyCity revealed that trading has been stronger than it was expecting recently and is now in a position to provide detailed guidance for the year.

According to the release, SkyCity has continued to see strong performance from its local gaming businesses in New Zealand, particularly from electronic gaming machines. It has also experienced consistent performances from both SkyCity Adelaide (post-opening of the expansion from December 2020) and the offshore online casino SkyCity Malta.

However, the company’s tourism-related businesses in New Zealand and South Australia continue to be impacted by ongoing international border closures. Though, positively, they are benefitting from positive domestic tourism, particularly on weekend and holiday peaks.

What is SkyCity expecting to report in FY 2021?

The release explains that subject to no property closures prior to 30 June 2021, management expects the company to deliver FY 2021 normalised EBITDA of between NZ$247 million to NZ$253 million.

And on the bottom line, a normalised net profit after tax of between NZ$84 million to NZ$88 million is expected. This represents a 26.7% to 32.7% increase on FY 2020’s normalised net profit after tax of NZ66.3 million.

In light of this solid profit growth, SkyCity expects to comfortably meet its financial covenants for the 30 June 2021 testing period, allowing it to pay a final dividend in September. This will be consistent with the revised dividend policy announced with its half year results. That policy will see SkyCity pay 60% to 90% of normalised profit out to shareholders each year.

The SkyCity share price is up 11% since the start of the year.

The post SkyCity (ASX:SKC) share price on watch after FY 2021 guidance update appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

AdChoices
AdChoices
AdChoices

More from The Motley Fool

The Motley Fool
The Motley Fool
image beaconimage beaconimage beacon