- SkyCity’s FY26 underlying Revenue declined 0.3% to $822.7 million, while underlying EBITDA fell 22.3% to $181.6 million.
- Reported EBITDA decreased 44.2% to $120.5 million and reported NPAT fell 37.6% to $18.2 million.
- Net Debt stood at $591 million, with net debt to EBITDA at 3.1 times on a debt covenant basis.
- The company expects its asset monetisation programme to generate $275 million-$300 million in gross proceeds, with proceeds intended for debt repayment.
SkyCity <a href="https://comicvibe.com/digital-entertainment-leadership-forum-2026-ai-reimagining-entertainment-with-infinite-wonders-delf-cyberport/” title=”Digital Entertainment Leadership Forum 2026 AI Reimagining Entertainment with Infinite Wonders #DELF #Cyberport”>Entertainment Group (ASX:SKC) reported FY26 results showing lower Earnings amid weaker gaming revenue, reduced customer visitation and spending late in the financial year, and costs associated with its operational and regulatory programmes. Underlying revenue declined marginally, while underlying and reported earnings recorded larger decreases. The company also made progress on asset sales, the New Zealand International Convention Centre and its cost reduction programme.
Revenue and Underlying Earnings
SkyCity reported underlying group revenue of $822.7 million for the year ended 30 June 2026, a decline of 0.3% from the prior period. Lower gaming revenue was attributed to the rollout of carded play across its New Zealand casinos and lower customer visitation and spending during the fourth quarter in Auckland and Adelaide.
Higher non-gaming revenue, including the contribution from the NZICC following its February opening, partly offset the decline in gaming revenue.
Underlying EBITDA decreased 22.3% to $181.6 million, within the company’s previously provided guidance range of $180 million to $190 million. Underlying NPAT declined 46.9% to $38.0 million.
The second half generated underlying EBITDA of $96.1 million, with the fourth quarter contributing approximately $20 million less EBITDA than the third quarter.
Reported EBITDA fell 44.2% to $120.5 million. The result included accounting adjustments and $23.5 million of costs associated with the Building a Better Business programme in Adelaide.
Reported NPAT declined 37.6% to $18.2 million. The company also recorded a $43 million write-down of the accounting carrying value of its Adelaide operations following significant regulatory and operational changes.
Capital expenditure was $95.4 million, below the previously indicated range of $100 million to $110 million. This included $32.9 million related to the NZICC.
SkyCity’s asset monetisation programme is now expected to generate gross proceeds of $275 million to $300 million, with proceeds anticipated by December 2026. The company intends to use the proceeds to repay debt.
The sale of the 99 Albert Street and Victoria Street Investment properties for $74.5 million is unconditional, with settlement expected in September 2026. SkyCity has also signed a non-binding heads of agreement for the sale of the Grand Hotel, with settlement expected later in the year.
Net debt at 30 June 2026 was $591 million. Net debt to EBITDA was 3.1 times on a debt covenant basis, with the ratio affected by lower FY26 earnings. SkyCity expects, subject to completion of the Grand Hotel sale and before any payment for an online licence, to reduce the ratio below 2.0 times by the end of FY27.
In July 2026, the company renewed part of its banking facility, increasing total Facility size to $277.5 million and extending certain maturities by two years.
SkyCity exceeded its FY26 cost-saving target and is targeting realised benefits of $30 million in FY27, increasing to total benefits of $70 million in FY28. The programme could affect approximately 200 to 250 predominantly New Zealand-based corporate and back-of-house roles.
The NZICC opened on 11 February 2026 and hosted 141 events during FY26, generating approximately 100,000 visitations. The FY27 event pipeline includes approximately 350,000 expected visitations, including several international conferences.
The company also completed the rollout of carded play across its New Zealand casinos and introduced the SHOW by SkyCity loyalty programme.
Adelaide Regulatory Developments
SkyCity is finalising a non-binding agreement with the South Australian regulator relating to the review conducted following the Martin independent report. Under the proposed agreement, the company expects to pay an A$21 million fine in three equal instalments over two years.
Final approval of the Building a Better Business remediation programme is now expected in early FY28. SkyCity has also commenced a strategic review of its Adelaide operations following the regulatory and operational changes.
SkyCity is not providing FY27 earnings guidance because of macroeconomic uncertainty and expects to provide a trading update at its Annual Shareholders’ Meeting in October.
Early FY27 trading has continued at the 4Q26 EBITDA run-rate, while the company expects $30 million of FY27 savings. Higher costs associated with the regulated online market are expected to partly offset those savings.
FY27 Capital Expenditure is forecast at $80 million to $100 million, including NZICC retention payments and excluding costs associated with online licences. The company has stated that its priorities include returning to positive Cash Flow and, once achieved, reinstating dividends.
SkyCity’s FY26 results show a decline in both underlying and reported earnings despite broadly stable underlying revenue. Gaming revenue weakened amid regulatory changes and softer customer activity, while Adelaide-related costs and other accounting adjustments further affected reported results. At the same time, SkyCity progressed asset sales, opened the NZICC, completed carded-play implementation and established a cost-out programme targeting $30 million of FY27 benefits and $70 million in FY28. The company’s near-term financial position remains linked to debt reduction, asset monetisation, cost savings and developments in the regulated New Zealand online gambling market.
