Casino operator Sky City Entertainment Group took some comfort from improvements by its Darwin and International VIP operations, but the write-down on its Cinemas division left the company with a nasty hangover.
Today it posted a 49 percent fall in annual net profit to $49.9 million for the year to the end of June.
But when adjusted for non-recurring items, which took into account the $60m Cinemas write-down, net profit was up 19 percent to $111.9m.
"Our 2008 result provides a sound platform for growth for 2009, which is probably the key take-out of this presentation," chief executive Nigel Morrison, who took over the job in March, said today.
The adjusted result was "solid", mainly influenced by the Darwin and International VIP results, and by savings in group overheads.
Group adjusted revenue was up 1.7 percent to $818.8m. That included a 1 percent rise in Auckland operations to $402.3m, while Darwin was up 7.7 percent to $A100.8m ($NZ124.6m), and the International VIP operation was up 4.6 percent to $34m.
Mr Morrison said ebitda (earnings before interest, tax, depreciation and amortisation) was the fundamental underlying success indicator for casino businesses, and the area the company was seeking to improve the most.
Using that measure, Darwin's performance was up nearly $A5m or 13.9 percent to $A40.1m, while International VIP ebitda rose $10.6m to $17.2m.
Auckland ebitda was flat at $208.3m, while group ebitda, adjusted for non-recurring items and excluding cinemas was up 7.7 percent to $306.4m.
"The challenge for us is really to grow our ebitda, and we'll grow our ebitda by growing revenues and maintaining tight cost control," Mr Morrison said.
Members of the new management team at Sky City were working together and "totally focused on turning this business around".
"We've reorganised our company to drive our profit focus and reduce our corporate overhead cost," he said.
At the same time he said Sky City was "not about cost cutting".
"We want to be efficient but we're about revenue growth."
The company would be focusing on core businesses, including product mix, pricing, presentation, customer service, marketing and customer loyalty.
The main challenge was to build on Auckland, where a key issue was a decline in gaming machine revenue to $205.5m from $213.4m.
Renovations had an impact on the Auckland result, with work on the main gaming floor having been completed in March.
The Cinemas unit result was "very disappointing", with revenue down 2.1 percent to $66.2m and ebitda down 44.8 percent to $4.8m.
"We attempted to sell the business, we weren't successful during the year. We're now committed to retaining the business. We've appointed a new management team ... and we're starting to see some positive signs coming out of that," Mr Morrison said.
"We are very confident we can do better."
The focus would be on greater customer value including providing greater diversity of movies aligned to market segment demographics, such as Bollywood, Cantonese and Mandarin movies.
A final dividend of 10.5 cents per share is to be paid, compared to 12cps the year before. For the full year, the distribution is 21.5cps from 21cps.
Sky City shares were up 4c by mid-afternoon to $3.47, having ranged between $5.41 and $2.90 in the past year.