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SkyCity to repay part of JobKeeper handout after $150 million profit

Business

A $72 million revenue lift at its Adelaide casino has helped SkyCity Entertainment Group to a $150 million profit, as the New Zealand-based company reveals plans to repay $3 million of the $15 million in JobKeeper it received from the Australian Government in 2020-21.

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SkyCity reported a $149.5 million (NZD$156 million) net profit after tax to the Australian Securities Exchange this morning, down 33 per cent on 2019-20.

Adelaide hosts the group’s only Australian casino. It also runs New Zealand casinos in Auckland, Hamilton and Queenstown.

Group revenue fell 15.4 per cent to $911 million, mainly due to a 72 per cent fall in its international business.

SkyCity opened its $330 million Adelaide expansion in the first week of December. The expansion includes new gaming spaces, bars, restaurants and the luxury 120-room EoS hotel.

Adelaide revenue increased 62.7 per cent from $115.8 million in 2019-20 to $188.5 million in 20-21 to be the strongest performing of the company’s four casinos

Revenue in Adelaide was up across gaming machines (70.4 per cent), tables (44.8 per cent) and non-gaming revenue (91 per cent), which included restaurant and bar takings and JobKeeper payments.

The company received $15.4 million in JobKeeper payments from the Australian Government in 2020-21 on top of the $7.8 million it received in 2019-20 to help it maintain its Adelaide workforce during the coronavirus pandemic.

In its annual report released this morning, SkyCity said it would repay about a fifth of the JobKeeper amount and two-thirds of the NZD$10.2 million it received in wage subsidies from the New Zealand Government in 2020-21.

“Despite having met all of the respective eligibility criteria for the New Zealand wage subsidy scheme and JobKeeper payments, in June 2021 the SkyCity Board resolved to make a voluntary repayment of $6.7 million of wage subsidies received from the New Zealand Government and $3.3 million (A$3.1 million) of JobKeeper payments received from the Australian Government,” the company said.

“The $6.7 million voluntary repayment to the New Zealand Government was made on 27 July 2021. It is anticipated that the voluntary repayment to the Australian Government will be made in September 2021.”

In June, SkyCity reported to the ASX it was being investigated by AUSTRAC’s Regulatory Operations Team.

The federal agency said it had identified potential serious non-compliance by SkyCity Adelaide with the Australian Anti-Money Laundering and Counter-Terrorism Financing Act and Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument.

The potential serious non-compliance included concerns relating to ongoing customer due diligence, and adopting and maintaining an Anti-Money Laundering and Counter-Terrorism Financing program.

SkyCity confirmed in its annual report today the investigation was ongoing and that it had taken “immediate steps to investigate and appropriately address the concerns raised”.

“SkyCity will continue to fully co-operate with AUSTRAC with regards to its inquiries and with the investigation of SkyCity Adelaide,” SkyCity chair Rob Campbell and CEO Michael Ahearne wrote in the annual report.

“SkyCity Adelaide’s performance prior to the expansion opening was impacted by COVID-19 disruption but when open has significantly improved across all activities.

“SkyCity has been making operational adjustments to the business when necessary and we continue to adhere to all government guidance to ensure our employees and customers are managed safely.”

The company declared a final dividend of seven cents per share.

SkyCity’s share price was up three per cent following this morning’s announcement to be $3.08 at 11am.

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