- »SkyCity Faces Questions After Executive Shuffle
SkyCity Faces Questions After Executive Shuffle
Almost every gambling brand had a tough 2020. SkyCity Entertainment Group was no different, as some of the lockdowns and coronavirus-mandated limitations clearly affected its 2019-2020 full-year report. And the ups and downs of virus protocols will undoubtedly continue to weigh heavily on the company’s bottom line into its next fiscal year.
A recent shakeup among SkyCity’s top executives, though, has many wondering if there is more to the story. Its CEO, CFO, and CMO all recently announced their departures. That doesn’t sit right with shareholders.
Executive Changes Afoot
SkyCity Entertainment Group issued a notice on November 16. It announced that three of the company’s top executives planned to exit SkyCity altogether.
CEO Graeme Stephens will be the first to leave and do so before the end of November, after having assumed the role in May 2017. Current Chief Operating Officer Michael Ahearne will assume the CEO role on November 30. As COO, Ahearne played a significant role in SkyCity operations in both New Zealand and Australia, as well as the online casino for New Zealand players.
Chief Financial Officer Rob Hamilton will leave his position on February 26, 2021.
And Chief Marketing Officer Liza McNally submitted her resignation and will depart on March 31, 2021.
Nothing in particular seemed to precede the departures or indicate that they were afoot.
Analysts Express Concern
All analysts approached by the New Zealand Herald expressed surprise at the news. Chelsea Leadbetter of Forsyth Barr said that “most people would be surprised in terms of what’s being announced.”
The only information to follow the announcement was that Stephens wanted to retire, Hamilton will pursue new opportunities, and McNally plans to relocated to Adelaide with her family.
SkyCity indicated that Stephens’ departure was not entirely surprising, at least within the company, “due to seamless internal succession which had been planned for.” Chairman Rob Campbell said that top management knew of Stephens’ desire to retire and had time to conduct an internal search for candidates to assume the CEO role before the November announcement.
Campbell also added that Ahearne’s promotion would be a positive for SkyCity in general, as his experience was “just what SkyCity needs at this point.”
Even so, Director Grant Williamson of Hamilton Hindin Greene told Stuff, “It is probably a bit unusual to see so many changes all relatively close together.” But the analyst also expressed optimism that the move may be good for the company.
Changes Amidst Challenges
Just a couple months ago, SkyCity Entertainment released its final 2019-2020 full-year financials. The pandemic hurt the business as much as expected. Normalized revenue dipped 24.3% for the year, and normalized net profit after tax was down 59.7%.
Of course, there were some good points in the report. Reported revenue from continuing operations was up 36.8%, total reported revenue was up 24.2%, and net profit was up 62.8%.
In addition, the aforementioned SkyCity online casino site delivered revenue when casinos were closed during lockdowns.
Moving Forward in Adelaide
Despite the executive changes and pandemic challenges, SkyCity recently confirmed that it continues to work on the $330 million Adelaide Casino redevelopment. Set to include everything from a brewery to live entertainment, The District at SkyCity anticipated remodeling to continue for some time.
SkyCity Adelaide did reopen its casino this weekend. There was some controversy about the reopening due to the local government’s concerns about the virus spread. Customers were welcomed at a limited capacity and starting with SkyCity Premier Rewards members only. Numerous protocols aim to ensure social distancing and cleanliness going forward.
Roller Coaster Stocks
The markets have reacted well to the Adelaide reopening but remain unnerved by the executive changes.
On the New Zealand Stock Exchange, SkyCity Entertainment Group started the month with a low point of $2.76 on November 3 but jumped to $3.19 on November 10. The news of the executive departures dropped the price to $3.02 on November 16. It has been shaky since then.
Some of the fluctuation can be chalked up to Covid-19 cases and the potential for lockdowns and closures, but some of it is the uncertainty surrounding SkyCity’s executive team and the company’s post-pandemic future.