Skyline back on the right track

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Bottom line up 61 per cent, dividend up 45 per cent – these hallmarks characterise the annual results of Queenstown conglomerate Skyline Enterprises. 

After tax and property provisions, the group is declaring unaudited profits of $14.5 million for its March 31 year, compared with $9m previously. 

Subject to a shareholder thumbs-up at the September 18 meeting, chairman Ken Matthews says Skyline’s cash position, strong trading “and relative confidence with industry trends” warrant boosting dividends to 32 cents a share – $10.8m in total compared with $7.4m. 

The 2009 dividend of 22 cents was a six-cent cut from 2008 so this 32-cent payout is a solid signal Skyline is back on a growth track. 

Shares traded at $5.80 early this week, up from $4.15 this time last year. 

The gondola/luge complexes in Queenstown and Rotorua both made “substantial improvements … to group earnings”, Matthews reports – with Queenstown introducing new products to boost average spend and Rotorua cutting costs. 

Singapore’s Sentosa Island luge had “a very busy year”, lifting the number of rides per person. But this luge faces “capacity issues” if growth continues, Matthews says. 

The Canadian luge also posted a record season. 

Casinos were flat – Christchurch was still solid, with just a slightly reduced contribution, but Dunedin and Queenstown disappointed. 

Queenstown’s Blue Peaks Lodge and Dunedin’s Mercure Leisure Lodge both improved their earnings. 

“While visitations to our domestic properties have not recovered to pre-recessionary times the average spend per head is not causing us any great problem,” Matthews says. 

Financial reporting rules saw another big writedown in Skyline’s Queenstown commercial property portfolio – $6.4m this year, following $7.1m previously. 

Matthews stresses these devaluations are paper losses and don’t affect the cash position or tax liability.

Crunchy numbers 

  • Net profit after tax $14.5m ($9m last year) 
  • Dividend $10.8m ($7.4m)
  • Non-cash property writedowns $6.4m ($7.1m)
  • Top contributors Queenstown/Rotorua gondola/ luges, Singapore luge, Christchurch casino