10 February 2004
Media Release – For Immediate Publication
SkyCity Leisure Reports Half Year Profit
SKYCITY Leisure Limited today reported a net surplus of $0.2m for the six months ended 31 December 2003 compared to
$1.0m for the corresponding prior period. The result and comparative are impacted by a number of unusual items relating
to the discontinued Planet Hollywood operation, a restatement of the prior year Fiji surplus and the timing of cinema
fit-out contributions. Adjusting for these items would report a net surplus for the period of $0.7m compared to $0.9m
for the corresponding prior period.
Revenue (excluding the discontinued Planet Hollywood operation) increased by 10% to $18.7m, with New Zealand cinema
revenues up 14% to $15.3m. Revenue also increased 14% at the company’s Fiji cinemas. SKYCITY Metro revenue was down
$0.3m due to some vacancies during the period and the renegotiation of some tenancy rentals.
New Zealand cinema admissions increased by 10.4% to 2.83 million - attributable in part to the opening of the company’s
newest multiplex, Village SKYCITY St Lukes, which has performed well since opening in May last year.
Total gross margin at $6.1m, and earnings before interest, taxation, depreciation and amortisation (EBITDA) at $5.4m are
both comparable with and close to the amounts for the corresponding prior period. SKYCITY Leisure’s New Zealand cinema
gross margin improved 6% to $3.8m, Fiji cinemas improved 18% to $0.4m, but property declined to $1.9m.
Operating cash flows improved, with $3.3m being generated in the six-month period compared to $2.5m for the same period
last year.
SKYCITY Leisure Chairman David Gascoigne said “The cinema business, in particular, is developing satisfactorily. Our
focus is upon both consolidation and growth in that business. We have continued to work on our current cinemas –
especially at SKYCITY Metro – and we are continuing with improvements to that and to other existing facilities. The
addition of Village SKYCITY St Lukes and the acquisition of Cinema City 5, Whangarei, demonstrates confidence in our
core business operations”.
Rialto Cinemas also performed positively during the half year where strong cinema demand in Dunedin led to the
announcement of an additional two-screen development within the Dunedin Rialto complex.
SKYCITY Leisure’s flagship complex in Auckland’s Queen Street, SKYCITY Metro, continues to be a popular entertainment
destination in its own right.
“Special back-to-back screenings of the Lord of the Rings trilogy proved extremely popular at SKYCITY Metro. Also, the
screening of large sporting events, film premieres and theatre hireage for corporate events have helped showcase SKYCITY
Metro as a multi-use entertainment complex”, said Mr Gascoigne.
New food and beverage tenancies are currently under development at SKYCITY Metro in the areas previously occupied by
Planet Hollywood and Theatro. Work is also underway to make the entrance to these tenancies more inviting and
accessible. Other improvements at SKYCITY Metro have included work to increase the rentable area in the food court. The
period also saw a renegotiation of the Borders Books lease ensuring their long-term tenancy.
“We look forward to the impact these new developments and attractions will have on the whole complex. The capital works
on the premises highlight the importance for us, as a cinema exhibition company, of reinvesting in our assets to keep
the whole entertainment experience fresh and exciting for the public. We need to meet evolving customer expectations and
to provide the very best in cinema entertainment,” said Mr Gascoigne.
The second half of the year will see the Cinema City 5 multiplex in Whangarei trading as part of the group and the
commencement of construction of a new eight screen multiplex in Tauranga. Following the acquisition of Whangarei the
group will have an interest in 89 screens nationwide.
“The Whangarei operation is the first cinema complex wholly owned by SKYCITY Leisure - a new development for us and the
new 8-screen cinema being built at Fraser Cove in Tauranga will be the second new multiplex development we’ve undertaken
through the newly branded Village SKYCITY joint venture. The developers have advised us that we can expect to open the
Tauranga complex toward the middle of 2005,” said Mr Gascoigne.
The directors note that the second half performance in FY03 had the benefit of particularly strong film titles including
Lord of the Rings - The Two Towers, Harry Potter and the Chamber of Secrets, Chicago, James Bond in Die Another Day, and
Whale Rider. The unusually fine weather during January 2004 has resulted in significantly reduced attendances for the
beginning of the second six months trading. This combined with an apparently less attractive product mix than for the
same period last year will make it unlikely that a similar result will be achieved to that of the January-June period
last year. The directors cannot be more specific, given the difficulty in making reliable predictions about the success
that any film or films may achieve once released.
Ends