Table of Contents
What changed
Revenue fell 4.5% to NZ$420.8m, but EBITDA rose 12.0% to NZ$113.1m and EBIT rose 19.4% to NZ$67.8m, pointing to materially lower opex. Below EBIT, the result reversed: PBT fell 41.4% to NZ$28.1m and NPAT fell 73.1% to NZ$6.1m, with the effective tax rate jumping to 78.4% from 53.1%. Segment mix was the key story: SkyCity Adelaide swung to a NZ$2.8m EBIT profit from a NZ$30.5m loss, while SkyCity Auckland's EBIT fell to NZ$81.6m from NZ$94.5m (margin 31.6% vs 33.2%) and SkyCity Online flipped to a small loss on a one-third revenue decline. Operating cash flow collapsed 97.8% to NZ$1.9m, cash fell to NZ$88.6m, gross borrowings rose 19.0% to NZ$678.2m, and no interim dividend was declared versus 5.25 cents prior.
What matters
- Earnings quality looks much weaker than headline EBITDA suggests. PBT is down 41.4% despite the Adelaide turnaround, so the cleaner read is that underlying earnings power fell, not rose. The NPAT/PBT gap is explained by the step-up in effective tax rate (78.4% vs 53.1%) rather than a separately disclosed discontinued or one-off item.
- Cash conversion deteriorated severely. OCF/EBITDA fell to 1.7% from 86.6%. With capex essentially unchanged at NZ$76.1m (18.1% of revenue), pre-lease free cash flow swung to –NZ$74.2m from +NZ$10.1m. This is what drove the cash draw and the increase in borrowings.
- Leverage direction. Net debt rose to NZ$589.5m from NZ$381.5m, taking net debt/EBITDA to 5.2x from 3.8x. Equity fell 13.0% to NZ$1.3b. The dividend suspension is consistent with that balance-sheet trajectory rather than with the reported EBITDA improvement.
Expectations
No quantified FY25 guidance or forward-work disclosure was supplied. On seasonality, FY24 was distorted by a large second-half loss, so the HY24-to-FY24 shape is not a reliable template. Annualised HY25 revenue of NZ$841.6m runs about 2.3% below FY24's NZ$861.0m, so the current print does not yet support a stronger full-year top line. The release supports a narrative of cost-out and Adelaide stabilisation but does not support an improving cash or leverage trajectory in the near term.
Quality of result
The EBIT improvement is partly durable — the Adelaide segment moving from –26.0% to +2.2% EBIT margin is a real operational shift — but it is offset by Auckland margin compression and an Online segment that has lost both revenue and profitability. The heavy tax charge, with no disclosed one-off explanation, leaves the bottom line difficult to extrapolate from. Most importantly, the collapse in cash conversion is the single biggest quality signal: with EBITDA up NZ$12.1m and OCF down NZ$85.5m, reported earnings are not being validated by cash this period. Capex at 18.1% of revenue was funded by drawing cash and adding debt rather than by operations.
Unresolved
- What specifically drove the step-up in effective tax rate to 78.4%, and is it expected to normalise?
- What caused the NZ$85.5m deterioration in operating cash flow — working capital unwind, tax timing, or settlement of prior-period items?
- How much further will gross borrowings rise given the NZ$76m half-yearly capex run-rate and the NZ$589.5m net debt starting point, and where do banking and USPP covenants sit at 5.2x?
- What is the path back to dividend reinstatement, and is it framed around leverage or earnings?
- What is the outlook for Auckland margin after the 160bp compression, and is Online's revenue fall structural?
This briefing cannot assess covenant headroom, regulatory or AML-related provisioning risk, or management's explicit FY25 earnings and leverage targets, because none of those were provided in the supplied materials.
Key metrics
| Metric | HY25 | HY24 | Change |
|---|---|---|---|
| Revenue | $420.8m | $440.4m | -4.5% ↓ |
| EBITDA | $113.1m | $101m | +12.0% ↑ |
| Net profit after tax | $6.1m | $22.5m | -73.1% ↓ |
| Net cash inflow from operating activities | $1.9m | $87.5m | -97.8% ↓ |
| Declared dividend per share | — | 5.3c | — |
| Operating profit | $67.8m | $56.7m | +19.4% ↑ |
| Profit before tax | $28.1m | $48m | -41.4% ↓ |
| Cash and cash equivalents | $88.6m | $188.2m | -52.9% ↓ |
| Total assets | $2.8b | $2.8b | -1.4% ↓ |
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| SkyCity Auckland | $258.3m | $284.2m | $81.6m | -3.1pp |
| Other NZ Operations | $38.3m | $38.8m | $14.8m | +0.3pp |
| SkyCity Adelaide | $123.2m | $117m | $2.8m | +2.7pp |
| SkyCity Online | $2.1m | $5.6m | −$0.41m | -0.8pp |
| Corporate/ Group | $0.14m | — | −$31m | n/a |
Analytical metrics
| Metric | HY25 | HY24 | Context |
|---|---|---|---|
| PBT growth | -41.4% | — | cleaner earnings measure |
| Effective tax rate | 78.4% | 53.1% | — |
| OCF / EBITDA (cash conversion) | 1.7% | 86.6% | deteriorated |
| FCF pre-lease | −$74.2m | $10.1m | −$84.3m |
| FCF / NPAT | n/m | 45.0% | complementary conversion metric |
| Capex % revenue | 18.1% | 17.6% | — |
| Capex | −$76.1m | −$77.3m | +$1.2m |
| Net debt | $589.5m | $381.5m | +$208.1m |
| Net debt / EBITDA | 5.20x | 3.80x | Weakening |
| Gross borrowings | $678.2m | $569.7m | +$108.5m |
| ROE (annualised) | 0.5% | 1.5% | Weakening |
| HY24 share of FY24 revenue | 51.2% | — | Other half was 48.8% |
| HY24 share of FY24 EBITDA | 73.1% | — | Other half was 26.9% |
| HY24 share of FY24 NPAT | -15.7% | — | Other half was 115.7% |
This analysis was generated using Annolyse, an AI-powered tool that analyses NZX company announcements. The analysis is based on available company filings and standard Annolyse calculations. This is general information only and does not constitute financial advice. The analysis may contain errors. Always read the original company filings and consult a licensed financial adviser before making investment decisions.