The SKYCITY Entertainment Group Limited-Ord (ASX: SKC) share price will be one to watch today after the gaming and entertainment company released its third-quarter update.
Key highlights from the release include (NZ$):
- New Zealand quarterly revenue excluding International Business (IB) fell 1.2% on the prior corresponding period to $158.9 million.
- Australian quarterly revenue excluding IB dropped 5.2% to $63.3 million.
- Normalised International Business revenue increased 5.1% to $38.2 million.
- Total reported revenue dropped 4% to $258.1 million during the quarter.
- Year-to-date revenue down 5.3% to $791.2 million.
Overall I feel this was another disappointing quarter from SKYCITY. The biggest disappointment in my opinion was its key Auckland business. As it generates 54% of the company's revenue, its performance has a big impact on its overall results.
In the first-half of the year the Auckland business performed well, but momentum was lost in the third-quarter and revenue fell 1.5% to $141.8 million. Though it is worth pointing out that management believes the segment will have a strong fourth-quarter due to a number of upcoming major events.
Elsewhere it was pleasing to see its International Business (VIPs) revenue bounce back and increase 5.1% during the quarter. But with the segment still down 26.6% year-to-date, it might be a little too soon to get excited.
Should you invest?
I haven't seen anything in these results to change my opinion that investors would be best avoiding the company for the time being.
I feel there are far better options for investors looking to profit from the tourism boom. Two of my favourite at the moment would have to be Event Hospitality & Entertainment Ltd (ASX: EVT) and Mantra Group Ltd (ASX: MTR).
Not only are both shares priced fairly and positioned perfectly to profit from the tourism boom, they also provide generous fully franked dividends.
