Sky City leisure returns to profit in half year

By NZPA

Thursday 13th February 2003

Sky City Leisure, formerly Force Corp, today announced it had returned to profit in the December half year.

The company, controlled by casino operator Sky City Enertainment, posted a $1 million net profit against a $5.5 million year ago period loss.

The cinema division reported admissions were down by 5 percent, to 2.56 million.

However, an improvement in average ticket price enabled the New Zealand cinema revenues to be maintained at last year's level, the company said.

There was a similar experience in Fiji where attendances were affected by a shortage of high quality Indian language films.

Going against this trend, admissions and revenues were up 18 percent at the art-house Rialto cinemas.

The company said that despite the somewhat mixed revenue results, effective cost control had resulted in cinema earnings including Fiji, as measured by earnings before interest, tax and depreciation (ebitda), improving by 5.5 percent to $3.9 million.

Sky Leisure said the second half of the financial year had started well thanks to the Harry Potter and Lord of the Rings films, where the second in each series are predicted to exceed the first films.

Sky City Metro revenues from the company's property assets fell by 8.2 percent to $2.5 million with the continued vacancy created by the closure of the Imax theatre contributing the major part of the revenue reduction.

Ebitda fell by 10 percent to $2.2 million.

Planet Hollywood restaurant revenues continue to decline, leading to a $680,000 loss for the six months from revenues of $1.3 million. Comparable figures for the same period last year were a loss of $252,000 from revenues of $1.9 million.

"A number of options are being worked through, with a view to minimising the impact of this operation on the company's future earnings," Sky Leisure said.

It said the economic situation in Argentina "appears to have stabilised somewhat from the situation, which prevailed 12 months ago" resulting in an 11 percent improvement in the admissions of Village Cinemas SA (Vsca).

But a positive financial contribution from Vcsa is not anticipated in the near future. It is continuing to meet the interest payment obligations of its debts.

The company will open its second Westfield Shopping Town cinema in Auckland in six months -- an eight-screen multiplex at St Lukes.

The company said it was concerned that the market pricing of the company's shares and mandatory convertible notes (MCN's) "does not appear to be recognising the 1:2 conversion rate that will apply to the MCN's."

On conversion one MCN will convert into two ordinary shares, and directors note that this conversion rate is not reflected in the current pricing.

Comments from our readers

No comments yet