Skyline moves into top gear

By Chris Hutching

Friday 13th August 2004

It's a wonder Skyline Enterprises chairman Barry Thomas has time to focus on his home turf in Queenstown.

He recently spent much of his time travelling to gambling conferences in Las Vegas and meeting tourism and gondola experts in Asia and Europe as the company prepares to lodge resource consents for the country's biggest new gondola project over the Caples Valley near Te Anau.

A couple of weeks ago he stunned Queenstown business circles when Skyline emerged as the bidder for a $58 million portfolio of eight prime retail and commercial buildings, including the waterfront Eichardt's hotel and the aptly named establishment, Thomas's Hotel.

A few days later he announced Skyline would set up a $5 million luge on Sentosa Island, Singapore, following the success of one the company launched at Mont Tramblant in Canada a year ago.

Thomas revealed his longer-term vision for Skyline and Queenstown recently when he said the tourist town was "still in its infancy" and discounted talk about over-development.

Part of his longer-term vision is the Milford Skytrail, a proposed $100 million 12km cableway between Queenstown and Te Anau.

The project has generated instant heat among conservationists. Resource consent applications are yet to be lodged.

Skyline and Milford Skytrail partner Ngai Tahu Holdings Corporation are commissioning the necessary environmental impact reports, researching European cableways, and talking with suppliers.

The Skytrail would eliminate the bottleneck of tourist coaches that arrive in Milford at 11am and leave at 2.30pm and allow greater numbers to enjoy the region.

Thomas said the Skytrail would blend into the landscape and be virtually silent, but he expected to be in for a long haul possibly three to five years before all the consent hurdles were cleared.

With an eye on Queenstown property, Thomas has established Skyline as a key tourism player, owning the gondola rides at Queenstown and Rotorua, owning and managing tourist lodges and the Crowne Plaza Hotel in Christchurch, and holding lucrative stakes in casinos in Christchurch, Queenstown and Dunedin.

Thomas is a major shareholder as well as director of Skyline, and his accounting firm, McCulloch & Partners, provides professional services and is the registered office.

He plays a tough hand, as any colleague will testify, often highlighting the perseverance and stubbornness that has made him one of the Lakes District millionaires and a familiar face at business functions around the country.

Sky City took on more than it expected recently when it bought a 41% stake in Christchurch Casinos with the intention of taking boardroom control.

Thomas fought back with a passion that baffled analysts, and the spat has yet to reach its finale as lawyers prepare arguments about the company's constitution and voting rights.

Skyline Enterprises is a public unlisted company that has proved profitable for its mainly Otago investors. The most recent deals, notably the acquisition of the $58 million parcel of property, will raise debt levels significantly.

However, the Skyline Enterprises annual report for the year ending March shows a company in good shape, with net assets of $73 million (and liabilities of just $3.3 million), including cash in term deposits of $6.1 million.

An imputed dividend of 18c a share will be paid next month from a profit after tax of $10.1 million ($11.6 last year) on revenue of $36.1 million.

Skyline shares are trading at about $5.55, giving market capitalisation of about $183 million.

In recent years, the Skyline result has been buoyed by its development and sales of lodges and tourist apartments - a sector Thomas says now has low returns, mainly because of cheaper competing accommodation and high maintenance.

Comments from our readers

No comments yet