SkyCity Entertainment Group Ltd

SKC: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$1.60	Ydlnmk	Xfcmyllw

SkyCity Entertainment: Weak Discretionary Environment Weighing on the Near Term

Angus Hewitt

Dec 8, 2023

We maintain our NZD 3.50 (AUD 3.20) fair value estimate for shares in SkyCity Entertainment. Fiscal 2024 is shaping up to be more challenged than we and the company initially anticipated. The weaker discretionary spending environment is weighing on New Zealand casinos, particularly gaming machine play. The earnings outlook is also hurt by delayed settlement of the Auckland car park concession, which is expected to contribute NZD 15 million to NZD 18 million in annual EBITDA. Further, compliance and legal costs continue to weigh on SkyCity Adelaide's performance.

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