Skyline reflects tourism fortunes

Friday 15th June 2001

By Chris Hutching

Queenstown-based Skyline Enterprises has produced another strong profit result for the year ending March but warned yesterday that prospects are hard to gauge in the light of recent disruption to airline services.

Skyline chairman and Queenstown millionaire Barry Thomas said the $7.1 million profit ($6.5 million last year) after allowing for tax of $2.1 million and abnormals was particularly pleasing while allowing for about $1 million to be spent on refurbishing various properties during the year.

Total revenue from all sources was up 16% at $28.3 million for the public unlisted company, which has about 500 shareholders.

This was achieved because of the larger number of tourists who helped boost performance of Skyline's accommodation properties in Queenstown and Dunedin and to a lesser extent Rotorua.

Blue Peaks Lodge, Mountain View Lodge and Leisure Lodge are undergoing a $3.5 million refurbishment, which is dampening profitability from those operations.

Another slight dampener in profit terms was the opening of the new $14 million Sky Alpine Casino in Beach St, Queenstown, late last year in competition with the already established Wharf Casino, a joint venture with Sky City.

Many commentators in the town believe there is only enough business for one casino.

"Like any new business the casino will take time to establish and the pre-opening and establishment costs take time to absorb," Mr Thomas said.

A key tenant in the new casino is New Zealand's first Hard Rock Cafe which officially opens in a couple of weeks but has already been serving locals.

Skyline is developing 34 apartments on the Blue Peaks site in Queenstown and about a third of them have been sold at prices from $300,000 to $360,000.

Mr Thomas said Skyline might retain about 10 of the apartments.

Skyline's other investments in Christchurch Casinos, Parkroyal Hotel Christchurch and Dunedin Casino performed to budget and contributed to dividends received by the company of $3.2 million (($2.7 million last year).

The company's gondola complex at Queenstown enjoyed an increase in patronage of 16% with a total of 487,000 passengers taking the ride.

Mr Thomas said the company was in a good position for strong performance this year but there were some questions arising from the instability of airline services.

Skyline is also involved in a controversial gondola development with Ngai Tahu.

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