AUCKLAND, August 24, 2026, 10:54 NZST
- SkyCity’s stock gained 7.4% to close at NZ$0.65 during Monday’s session.
- The company’s market value increased by approximately NZ$49.6 million following the move.
- Underlying EBITDA for FY26 declined by 22.3%, while operating cash inflow surged to almost three times higher.
- The recovery case now relies on asset disposals and reduced expenses.
SkyCity Entertainment Group Limited NZX:SKC saw its shares surge by 7.4% on Monday, boosting its equity value by around NZ$49.6 million. As of 10:26 a.m. NZST, the stock stood at NZ$0.65, based on delayed exchange figures.
The surge stands out given that recent results are still soft. Underlying EBITDA dropped by 22.3% in FY26, with underlying profit cutting nearly in half. Shareholders are focusing on factors such as cash recovery, asset disposals and a bigger cost restructuring.
| Monday price reaction | Value | Investor read-through |
|---|---|---|
| SKC price | NZ$0.650 | Rose NZ$0.045 |
| Daily move | +7.44% | Biggest gain among liquid companies in NZX board snapshot |
| Market value | NZ$717.0m | Calculated from 1.103bn shares in circulation |
| Value added Monday | NZ$49.6m | Equals 1.65 times the FY27 benefit goal |
| Move / FY28 benefit target | 0.71x | The surge factors in some, but not all, of the anticipated reset |
SkyCity’s underlying revenue for FY26 came in at NZ$822.7 million, largely unchanged from the previous year. Underlying EBITDA fell to NZ$181.6 million versus NZ$233.7 million, with softer carded play, subdued premium gaming, and higher compliance costs reducing margins.
| Underlying metric | FY26 | FY25 | Change |
|---|---|---|---|
| Revenue | NZ$822.7m | NZ$825.2m | -0.3% |
| EBITDA | NZ$181.6m | NZ$233.7m | -22.3% |
| EBITDA margin | 22.1% | 28.3% | -6.2 percentage points |
| EBIT | NZ$76.5m | NZ$139.5m | -45.1% |
| Net profit | NZ$38.0m | NZ$71.5m | -46.9% |
| Operating cash inflow | NZ$121.7m | NZ$45.2m | +169.4% |
Monday’s offer can be most clearly explained by cash flow. Operating inflow increased by NZ$76.5 million even as earnings declined. The gap indicates early gains in working-capital management and cash conversion, ahead of the broader cost programme’s implementation.
Management is aiming for NZ$30 million in annualised benefits in FY27, with the target increasing to NZ$70 million in FY28. Monday’s value increase represents 71% of the latter amount, putting the focus on execution.
| Recovery lever | Amount or target | Timing |
|---|---|---|
| Annual operating gains | NZ$30m | FY27 |
| Total operational gains | NZ$70m | FY28 |
| Asset sale receipts | NZ$275m–NZ$300m | Anticipated in FY27 |
| Unconditional office property divestment | NZ$74.5m | Expected settlement September 2026 |
| Net debt to underlying EBITDA | Below 2.0x | FY27 goal; 3.1x at FY26 |
| Retail bond comes due | NZ$175m | May 21, 2027 |
The balance-sheet numbers are significant. The planned asset sales account for 38% to 42% of the company’s market value as of Monday. SkyCity plans to allocate the proceeds to pay down debt, targeting leverage of under 2.0 times underlying EBITDA.
The convention centre introduces an additional revenue stream. Since opening, the New Zealand International Convention Centre has held 141 events and received 100,000 visitors. The FY27 forecast shows approximately 350,000 expected visits. Chair Julian Cook and CEO Jason Walbridge stated, “We are encouraged by the early results.”
Carded Play continues to weigh on operations. While required enrolment led to the anticipated drop in gaming revenue, it also grew the customer database by over 200%. The company stated that system updates carried out in July saw a stronger response.
| Analyst recommendation snapshot | Reading | Upside from NZ$0.65 |
|---|---|---|
| Average recommendation | Buy | — |
| Number of analysts agreeing | 4 | — |
| Consensus price target | NZ$1.012 | +55.7% |
| Lowest estimate | NZ$0.800 | +23.1% |
| Highest estimate | NZ$1.500 | +130.8% |
Analysts are still upbeat, yet forecasts span a broad range. The lowest projection stands 23% higher than Monday’s price. This difference points to potential recovery value rather than confirmation that margins will rebound.
Regulated online gambling offers flexibility. New Zealand’s gross gaming revenue for the sector was put at NZ$1.36 billion annually. Licences are anticipated to be granted later this year, with launches projected between December 2026 and June 2027. SkyCity has yet to secure a licence.
Risks: Consumer spending continues to lag, Adelaide remediation expenses are still high, and NZ$175 million in bonds are set to mature next May. The hotel deal is not binding. If sales are not completed, savings targets missed, or an online licence is not secured, Monday’s rerating could be undone.
Actual cash flow, rather than accounting earnings, will be the next test. Investors are looking for the September property settlement, reduced leverage, and tangible cost savings in FY27. Monday’s share price jump gives management some breathing room, but also increases the consequences of not achieving these goals.
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