SKC05/11/2002GEN REL: 0909 HRS Sky City Entertainment Group Limited
(NS) GEN: SKC: Media Release Sky City has provided the following media
release:
The announcement of a special dividend and the intention to undertake a
non-market share buyback programme in 2003 (subject to market conditions
atthe time), reflects the company's continuing focus on efficient capital
management of funds available.
The announcement of a new hotel for Auckland reflects the continuing
expansion of Sky City's Auckland facilities, with the provision of an
important complementary facility to the new convention centre which
iscurrently under construction, and to the main entertainment complex. The
announcement of these initiatives is consistent with Sky City'sstrategic
objectives of capitalising on growth opportunities relative tothe core
business operations and maintaining the capital efficiency of the
company's balance sheet.
Special Dividend
Given the company's strong earnings pattern and
current level of reserves,the Sky City board has approved the payment of a
special dividend of 20cents per ordinary share to those shareholders on
the Sky City register asat 5.00pm on Friday 22 November 2002. The
dividend, which will be fully-imputed, will be paid on 29 November2002.
The special dividend of 20 cents per share is in addition to the 38
centsper share dividend paid to shareholders for the 2002 financial year.
The dividend reinvestment plan will not apply, it having been discontinued
following payment of the final FY02 dividend on 4 October.
Share Buyback
Sky City Entertainment Group Limited also advises
that it intends toinitiate a share buyback programme during the 2003
calendar year. Full details of the buyback programme will be provided with
the release ofthe Group's 2003 interim result which is expected to be
announced on 25February 2003. The scale of the buyback will depend on
market conditions at that time, but it is currently envisaged that the
programme will be inthe order of $40 million - $60 million. If market
conditions change substantially between the date of this announcement and
the announcement ofthe details of the buyback, then the directors will
take this into account when determining the scope and scale of the
proposed programme.
Convention Centre Hotel
In conjunction with the Convention Centre
currently under development, SkyCity Entertainment Group will develop a
320 room deluxe (Qualmark 5 star)standard, 14 level hotel in the airspace
above the eight level convention centre on Federal Street in central
Auckland. Access to the convention centre and the hotel will be from
Federal Street, immediately across the street from the main Auckland site.
The new hotel will cater for the increased accommodation demand arising
from the Convention and Exhibition Centre and will provide additional
accommodation capacity to relieve the increasing pressure on Sky City's
existing 344 room hotel, which is already close to capacity. In the
financial year ended 30 June 2002, Sky City Hotel reported an 86%
occupancy and for the three months to 31 October this year, occupancy has
averaged88%. Pressure on the existing Sky City Hotel property will mean
that, without the new hotel, the Sky City Auckland business would not be
able to offerthe preferred onsite accommodation option for conference
delegates once the new convention centre opens for business at the end of
the 2003 calendar year. The new hotel will cater to this onsite
accommodation preference for conference organisers and delegates as well
as providing additional capacity to meet the continuing growth in demand
for quality hotelaccommodation at the Auckland complex. Development of the
new hotel property will mean that, from early 2005, SkyCity Auckland will
be able to offer 664 quality hotel rooms, catering for the domestic and
international visitor markets, from the leisure,corporate, and conference
sectors. Construction of the two new facilities (the convention centre and
thehotel) is consistent with Sky City's strategy to develop new core
business facilities that will drive increased domestic and international
visitationto the gaming, restaurant and entertainment facilities at the
Auckland complex. Capital cost of the new hotel is expected to be $75
million, with completion anticipated approximately one year after the
convention centre,in late 2004.
End CA:00083575 For:SKC Type:GEN
Time:2002-11-05:09:08:58
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