Jason Walbridge: SkyCity CEO on the company's 42 percent profit drop

SkyCity is pushing forward with a new capital raise, after confirming a significant drop in profit.

Underlying profit's plummeted 42 percent, according to new reports.

Costs have also been rising, particularly for regulatory compliance, online gaming, and the soon-to-open Auckland convention centre.

SkyCity CEO Jason Walbridge says he believes they're acting in the best interests of the company - despite the concerns.

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Episode Transcript

Speaker 1 (00:00):
Now sky City is after all going to go ahead
with that capital raise. It's looking to raise two hundred
and forty million dollars. Announced today that they have a
forty two percent drop in profit for the year, down
to seventy one point five million dollars now. Jason Woolbridge
is sky City's chief executive High Jason, Hi, Heather, are
you worried about Alan Gray's opposition to your capital raise.

Speaker 2 (00:20):
We've certainly taken into account all of our major investors feedback.
We believe that we're acting in the best interests of
the company and you know, we were pleased to be
able to announce our FY twenty five results today along
with the equity rays of two hundred and forty million dollars.

Speaker 1 (00:38):
The point that Alan Gray's making is that you guys
should be selling as many assets as you can first.
Is that a fair point?

Speaker 2 (00:45):
We agree we need to monetize some assets. You know,
we're a fantastic quality business. We're a key part of
New Zealand and South Australian economy and the equity rays
and selling some asse sets is about paying down debt
and resetting our balance sheet for the future.

Speaker 1 (01:00):
Yeah, do you not have enough assets though to avoid
the capital rays.

Speaker 2 (01:05):
It's all about timing. We've been working hard on monetizing
the car parks and the commercial building. These things unfortunately
take time in a tough New Zealand economy.

Speaker 1 (01:14):
Okay, how is it going with the sales that you
already have underwe or that you're planning to do.

Speaker 2 (01:20):
Yeah, we've been underway with the car park for about
six months now. It's going to take us another six
to twelve months, and the commercial buildings will just take
us a little bit longer.

Speaker 1 (01:30):
It's a rubbish time to be trying to sell that
kind of stuff, isn't it.

Speaker 2 (01:34):
It's not the best time. It's a tough New Zealand
economy for all New Zealanders as well as companies like
us trying to sell key assets.

Speaker 1 (01:40):
Hey, are you seeing a difference in how you guys
are doing over in Australia versus how you doing here?

Speaker 2 (01:46):
It's certainly different economies. The South Australian economy is very
strong versus here in New Zealand. We have seen less
spend per visit, but across both jurisdictions, visitations remained really
so wrong and we're thrilled about that.

Speaker 1 (02:01):
Why Is it so much stronger in South Australia do
you think?

Speaker 2 (02:04):
I think it's just a different economy. They've rebounded back
post COVID with tourism a lot stronger. They're focused on
bringing big events to South Australia. You know, all the
things that New Zealand knows how to do, and we're
getting back to doing those things. It's just taking us
a little while.

Speaker 1 (02:20):
Do you support the calls that are increasingly coming out
of Auckland for some sort of assistance for Auckland.

Speaker 2 (02:28):
For the city overall, I'm not really sure about that.
You know, we're focused on what we can control as SkyCity.
We're excited about the convention Center opening in February. We're
going to bring down up to five hundred thousand delegate
days worth of activity into the city and that fills
up hotels and restaurants and bars. So you know, that's

(02:51):
where we're our focus is at the moment. What are
the things we can control?

Speaker 1 (02:54):
Yeah, what about the bed levy? Would you support that?

Speaker 2 (02:57):
We're certainly supportive of something of that nature. We would
like to see more major events coming back to New
Zealand and we need to be able to fund the
activity that's required to bring those events down here.

Speaker 1 (03:13):
Because is it just me or is it actually is
there like a bit of a dearth of good things
on our calendar in Auckland.

Speaker 2 (03:21):
There is. We're in a little bit of a drought
at the moment. You know, we would love to see
some more things, and that's why we're excited about the
convention Center. You know, we're going to open in February.
We've got thirty odd events in the first four or
five months.

Speaker 1 (03:32):
I mean, look, Jason, you might be excited about the
convention Center. I'm not excited about the convention Center. It's
not going to give me a concert I can.

Speaker 2 (03:38):
Go to, is it. Well, it may do. We haven't
announced the launch events yet here that there may be
something in there that you look forward to.

Speaker 1 (03:46):
No, perhaps so, But I mean, listen, tell me, you
know you're an expert in this kind of thing. I'm
looking at the calendar. I'm thinking, Jesus, a bit dry
out there at the minute. How much more should we
actually have on the calendar than we do?

Speaker 2 (03:58):
Look, particularly through the winter pair, it'd be lovely to
see more events, you know, one or two events every month.
Just think back to October last year when we had
Coldplay in town. Yeah, what a big difference that made
to the city. That's the sort of stuff that we
really want to see in Auckland happening far more often.

Speaker 1 (04:14):
So, if you could put your finger on the thing
that's causing us to not have those things on the calendar,
what is it.

Speaker 2 (04:20):
Right now? At the moment? It's funding. You know, these
events work on a two to three four year horizon.
We've got to be booking these events now for twenty seven,
twenty eight, and twenty nine. Our sales team for the
convention Center are selling on a three to five year horizon.
We've already got events in the calendar for twenty seven

(04:40):
and twenty eight.

Speaker 1 (04:41):
Have we got events for Auckland? Have we booked things
for two three years out?

Speaker 2 (04:46):
Yeah, I'm not sure of specific events that we've got.
You'd need to talk to the team at Heart of
Auckland and Tataki Unlimited.

Speaker 1 (04:54):
Yeah, fair point. Now, you spoke about the convention Center,
which obviously is fantastic for you guys, and you're getting
the care in February. How much is that going to
turn around the fortunes of your business? Do you reckon?

Speaker 2 (05:04):
It's a game changer for us. As we ramp that
property to full capacity, we're hoping to see five hundred
thousand odd visited days worth of activity there. You know,
it's people in our hotels, restaurants into our casino, and
it's not only good for sky City, it's good for
every hotel operator, every restaurant operator in the city of Auckland.

Speaker 1 (05:25):
And this business with Fletcher in the court case, how
long is that going to take? Do you think?

Speaker 2 (05:29):
Yeah, I'm not sure. You know, it's never a decision
that any company wants to make, but we just failed.
It was the best interest of our shareholders the building
six and a half years late. You know, at some
point we need to sit down and settle up. What's
happened there.

Speaker 1 (05:43):
Yeah, Hey, Jason's good to talk to you and thank
you for your time. Jason Woolbridge, Chief executive of sky City.
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