The SKYCITY Entertainment Group Limited (ASX: SKC) share price will be one to watch on Friday.
This follows the release of an update in relation to the casino and resort operator's earnings guidance for FY 2021.
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What did SkyCity announce?
This morning SkyCity revealed that trading has been stronger than it was expecting recently and is now in a position to provide detailed guidance for the year.
According to the release, SkyCity has continued to see strong performance from its local gaming businesses in New Zealand, particularly from electronic gaming machines. It has also experienced consistent performances from both SkyCity Adelaide (post-opening of the expansion from December 2020) and the offshore online casino SkyCity Malta.
However, the company's tourism-related businesses in New Zealand and South Australia continue to be impacted by ongoing international border closures. Though, positively, they are benefitting from positive domestic tourism, particularly on weekend and holiday peaks.
What is SkyCity expecting to report in FY 2021?
The release explains that subject to no property closures prior to 30 June 2021, management expects the company to deliver FY 2021 normalised EBITDA of between NZ$247 million to NZ$253 million.
And on the bottom line, a normalised net profit after tax of between NZ$84 million to NZ$88 million is expected. This represents a 26.7% to 32.7% increase on FY 2020's normalised net profit after tax of NZ66.3 million.
In light of this solid profit growth, SkyCity expects to comfortably meet its financial covenants for the 30 June 2021 testing period, allowing it to pay a final dividend in September. This will be consistent with the revised dividend policy announced with its half year results. That policy will see SkyCity pay 60% to 90% of normalised profit out to shareholders each year.
The SkyCity share price is up 11% since the start of the year.
