SkyCity Entertainment Group Limited (SKC.AX) Earnings Call Transcript & Summary

We just want to welcome you all today here to the AGM. And we -- as tangata whenua, we just want to lay upon good vibes, good wairua in the room for the AGM today to our Board. Thank you for inviting myself and mom to open up the Hui today. Again, we instill positive vibes and good wairua for you for your Hui today. [Foreign Language]

All right. Thank you very much, [ Miriama ], and thank you very much, Joseph. [Foreign Language] Good morning, ladies and gentlemen. I am Julian Cook, Chair of the SkyCity Board, and it is my pleasure to welcome you all to the 2025 SkyCity Annual Meeting. Thank you for joining us online and in person today. For those attending in the SkyCity Theater, in the event of an emergency, please remain calm and follow the instructions of our theater ushers and the SkyCity security officers. They will direct us to the nearest emergency exits. Moving to the order of business for the meeting today. I declare the 31st Annual Meeting of SkyCity open and confirm that the meeting has been duly convened with a quorum present. Firstly, some administrative matters for those attending virtually today. Instructions on how to participate are set out in the Notice of Meeting and the virtual meeting guide available on Computershare's meeting platform. Shareholders can ask questions and vote on the resolutions to be put to the meeting on their selected devices. However, bondholders who are not also shareholders are not entitled to vote on the resolutions or ask questions. Shareholders can submit questions on their selected devices at any time. If your question relates to one of the resolutions set out in the Notice of Meeting, please note in your question which resolution your question relates to. Note that your questions may be moderated or if we receive multiple questions on one topic amalgamated together. Due to time constraints, we may not also be able to answer all of your questions. Voting today will be conducted by way of poll on all terms of items of business. Online voting will open shortly for all resolutions. If you are eligible to vote at this meeting, the resolutions and voting options will appear on your screen at that time. You can vote for all resolutions at once or by each resolution. I now declare voting open online on all items of business. You can submit your votes at any time. I will give you a warning before I move to close voting. In the event you experience any technological issues today, a recording of today's meeting will also be available on the company's website following the meeting. The minutes of the 2024 SkyCity Annual Meeting held on the 31st October last year have been posted on the company's website and are held by the company secretary. These minutes are available for inspection by any shareholder or bondholder should they wish to do so. I will now introduce the SkyCity Board and management in attendance in the SkyCity Theater today. In attendance to my right is Jason Walbridge, SkyCity's Chief Executive Officer; and SkyCity Directors, Kate Hughes, Chad Barton and David Attenborough. In attendance to my left is Phil Leightley, SkyCity's General Counsel and Company Secretary; and SkyCity Directors, Glenn Davis and Donna Cooper. Also in attendance in the front row of the theater today are members of the SkyCity senior management team as well as representatives from our audit partner, PricewaterhouseCoopers and legal advisers, Chapman Tripp. The business of the meeting today is as set out in the Notice of Meeting. First, I will present my Chair's address. Secondly, SkyCity's Chief Executive Officer, Jason Walbridge, will summarize SkyCity's performance during the past financial year and provide an update on the current trading. Thirdly, we will move to the previously notified resolutions, including any questions relating to those resolutions. The meeting will conclude with a general question-and-answer session on matters relating to the management and operations of the company. At the close of the meeting, you are invited to join the SkyCity directors and management team for light refreshments in the theater foyer. Good morning, everybody. The 2025 financial year was a difficult period for SkyCity. Trading results were weak with a combination of increased costs and weak revenues seeing underlying EBITDA reduced from $278 million in the prior period to $234 million in this year. And underlying profit reduced from $123 million in the prior year to $71 million in the current period. The business subsequently raised equity from its shareholders to maintain its credit rating and creditworthiness. We understand and agree that notwithstanding the necessity, none of this was good news to shareholders. There are, however, some positive aspects which the business has achieved, notably amongst these were the closure of outstanding regulatory matters in New Zealand, settling the outstanding dispute in Adelaide over casino duties, resetting the Adelaide remediation program, being assessed as a suitable party to operate the Adelaide Casino, the successful launch of Carded Play in New Zealand and moving towards completion and handover of the New Zealand International Convention Centre. The Board appreciates that financial results for shareholders have been poor. However, the reality has been that the company has been focused on the remediation of long-standing breaches of law and license conditions under which SkyCity operates. This has involved significant additional cost within the business and a much stricter approach to customers. Addressing past failings and achieving compliance has necessarily been the priority for the business. Nevertheless, we are seeing the building blocks being put in place for a return to a more profitable and successful business. Let us now review the year in some more detail. I will begin with the financial performance. FY '25 was a year of considerable challenge. Underlying revenue declined by 5.2% year-on-year and profits decreased by 42% despite increased visitation. These results reflect the reality of our operating environment, which is shaped by regulatory challenges, a challenging New Zealand economic climate and the need for significant investment in remediation and transformation. In particular, in the April to June quarter of 2025, we experienced weak trading corresponding to a period in which New Zealand GDP shrank by 1%, well in excess of what all forecasters had been predicting. These factors, along with the delay in the opening of the NZICC and the inability to complete a key asset sale significantly constrained our financial flexibility. This pressure ultimately necessitated additional capital to strengthen our balance sheet. It was in this context that the Board made the difficult but necessary decision to raise $240 million in new equity to secure the company's financial position. We understand the concerns raised by some shareholders about the timing and size of the raise. However, I want to be clear, this decision was made to protect the company's financial flexibility, preserve our BBB- investment credit rating -- investment-grade credit rating and safeguard our casino licenses. The Board considered a range of alternatives. None of these measures would have prevented a credit rating downgrade. And without the raise, we would have been at risk of defaulting on our banking covenants later this calendar year. Raising equity provided us with funding certainty and avoided the additional interest costs and potential covenant waivers that would have resulted from other options. Maintaining our investment-grade credit rating is not just about managing our cost of capital. It is about ensuring continued access to debt markets, preserving refinancing flexibility and supporting future growth. It is also a key factor in maintaining our regulatory standing. Financial suitability was a key consideration in the Martin Review, which considered our suitability to operate the Adelaide Casino. It is also a factor as we renew our Queenstown and Hamilton licenses and as we apply for an online casino gambling license in New Zealand in 2026. Based on the latest credit rating update from S&P Global Ratings, SkyCity currently holds a BBB- rating with a negative outlook. Importantly, this is still investment grade, albeit at the bottom of investment grade. In addition to the equity raise completed this year, we have committed to an asset sale program with a target of around $200 million, which will be applied to further debt reduction. The business has already been selling assets, namely our stake in the GIG business and surplus land in Queenstown. Through the 2025 financial year, the sale of these assets realized $70 million. The asset sale program includes a concession over the Auckland car park, commercial office property and has been extended to consider other assets to ensure we achieve the target of $200 million. Advisers are actively engaged and working on this program. We remain focused on our long-term financial stability and continue to target BBB flat credit rating metrics. Once we have realized proceeds from the asset sale program, we expect to be in a position to achieve this. As already noted, addressing the historical breaches of regulations and our licenses has been the primary focus of the business over the last 2 years. We are making good progress in this regard. In September 2024, we closed the Auckland Casino gaming floors for 5 days as part of a settlement with the Department of Internal Affairs over failure to meet harm minimization and host responsibility obligations. This marked the end of outstanding regulatory actions in New Zealand. In Adelaide, our Building a Better Business or B3 program is central to our transformation. During 2025, we completely rescoped the program with clear deliverables, realistic timelines and proper cost visibility. It is a comprehensive multiyear initiative that touches every part of the business. We have resourced it appropriately, embedded strong governance and ensured genuine operational ownership on the ground in Adelaide. The cultural and operational shifts we are seeing led by our refreshed management team are showing good progress. I do stress, however, that there is still considerable work ahead before we can confidently say our compliance systems fully meet the requisite standards. We also received the findings of the independent review into the suitability of SkyCity continuing to operate the Adelaide Casino. Being deemed suitable was an important step in our ongoing remediation efforts here. We still await the forthcoming decision of the South Australian regulator on what enforcement action, if any, might follow from his consideration of the Martin Review. Jason will cover this in more detail in his comments. Across the group, our compliance systems are in a much stronger position than they were a year ago. In New Zealand, the rollout of Carded Play across our casinos has been a significant step forward. It's reshaping how we engage with customers and how we manage operational and regulatory risk. We've also seen progress on the regulation of online casino gambling with a draft Bill now before parliament. These developments are critical to our future, and we're engaging constructively with regulators to ensure we meet the highest standards. This year's ASM reflects the continued stability of our Board. We are not proposing any new appointments, but we do put to the meeting the reelection of Kate Hughes and Glenn Davis, both of whom, by rotation, retire and offer themselves for reelection. Kate chairs our Risk and Compliance Committee and is a member of the Governance and Transformation subcommittees. Her background spans regulatory compliance, business resilience and governance across both public and private sectors. Kate has been the architect and champion of the risk transformation program across our business. Glenn brings deep experience in corporate law, legislative compliance and risk management and serves as the Chair of our Australian subsidiary, SkyCity Adelaide Pty Limited. Glenn's leadership has been a key factor in the license suitability findings in Adelaide. We understand that some of our shareholders have voted against the election of one or both of our directors to hold the Board accountable for the company's recent equity raise, and we fully respect shareholders' rights to do so. However, both Kate and Glenn's contributions have been instrumental in guiding SkyCity through a period of significant market challenges and business transformation, and the Board unanimously supports their reelection. We are hopeful we can rely on your support in that regard. As we look to the future, our focus is firmly on positioning SkyCity for sustainable growth and strong shareholder returns. The strategy we've set for the next 3 years sees us focus on our core businesses to be a market-leading entertainment company across land-based and digital gaming experiences. The entertainment industry is undergoing a fundamental transformation driven by digitization, evolving consumer expectations, regulatory change and increasing competition from both traditional and nontraditional players. We are positioning SkyCity to be a successful business within this space. We've anchored our strategy on 3 core pillars. First, we are focused on delivering connected experiences for customers. This means creating seamless, personalized interactions across our venues and digital platforms, ensuring that every touchpoint, whether physical or online, reflects the quality, service and innovation our customers expect. Secondly, we are committed to optimizing our core business. This includes continuing the work already underway to embed our risk management culture and digital transformations into the fabric of our operations. It also demonstrates our deep understanding of the privilege and responsibility that comes with our social license as a gaming -- gambling operator. Maintaining the trust of our regulators, communities and customers is of paramount importance. Cost discipline will continue to be a fundamental element of this pillar, ensuring we operate efficiently and responsibly. Thirdly, we are preparing to assume a leadership role in New Zealand's emerging regulated online casino gaming market. By leveraging our land-based presence, brand recognition and customer relationships, we aim to become the dominant local player in this sector. This opportunity holds the potential to be transformative, not only for our financial performance but also for the business model and competitive positioning. Before I close, I want to take a moment to thank Jason for his leadership. Since joining as CEO in July last year, he has brought clarity, energy and a strong strategic focus to the business. He has stabilized operations, accelerated our transformation programs and positioned SkyCity for long-term success. His leadership has been instrumental in navigating what has been a very complex and demanding economic environment, and I want to thank him on behalf of the Board. To our shareholders, I thank you for your continued patience and support. To our employees, more than 4,500 across the group, thank you for embracing change, upholding high service standards and embodying the values that define SkyCity. And to our customers, the millions who have visited us during 2025, thank you for your loyalty and trust. We are systematically putting the right people, plans and priorities in place as we reset and rebuild our business for long-term success. Whilst there is a lot of work to do, I am confident in the path ahead. I will now hand to Jason, who will speak in more detail about our financial performance and how we are delivering against the strategic priorities I've outlined across our venues, our transformation programs and our preparations for the regulated online market. I will now hand over to Jason to provide his update on SkyCity's operations and performance.

Thank you, Julian, and good morning, everyone. I appreciate you joining us today for our annual meeting and for your ongoing interest in and support of SkyCity Entertainment Group. I want to echo Julian's reflections and reaffirm the leadership's commitment to improving our culture, our processes and systems to build a long-term platform for successful and sustainable operations. Since joining SkyCity in July last year, my focus has been clear, to stabilize our operations, accelerate the transformation and position our business for sustainable growth. We've taken deliberate steps to strengthen our foundations operationally, culturally and strategically. While there's much more to do, I am confident we are heading in the right direction. FY '25 was a year of significant challenge, but also of meaningful progress. One of our most important achievements this year was the rollout of Carded Play across New Zealand. Alongside our refreshed loyalty program, SHOW by SkyCity, this has transformed how we engage with all of our customers. Carded Play isn't simply about fulfilling regulatory requirements. It's a broader transformation in how we manage risk, meet our host responsibility obligations and deliver personalized experiences and build stronger customer relationships. We now have unprecedented insight into customer behavior, preferences and engagement levels, and that's allowing us to tailor services, strengthen our value propositions and better manage operational risk. For those here today, I encourage you to sign up for SHOW by SkyCity and experience the process and the benefits firsthand. It only takes a few minutes. While we're just a few months past go-live, I'd like to acknowledge the ongoing commitment our team is showing to embed Carded Play into our business and deliver a strong customer experience. The financial impact of Carded Play remains in line with our guidance, and I'll share some further updates at our half-year results. Our transformation programs, especially the Building a Better Business or B3 program in Adelaide has gained momentum over the last 12 months. We've rescoped the program. We've established clear governance and are putting the right resources in place. The cultural and operational changes underway are encouraging, and we're applying those lessons across our group. We've also made significant progress in preparing for New Zealand's regulated online casino gambling market. The draft Bill was published in June, and it's been discussed before the Select Committee in Parliament. And the government has indicated that it expects to pass legislation in 2026. The online casino gambling market represents a significant opportunity for us at SkyCity with scalable revenue, attractive margins and the ability to leverage our brand and customer relationships. We're actively preparing to enter the regulated market and intend to position ourselves as the local hero in this space should we be granted a license. Turning now to our financial results for FY '25. For the year ending 30 June 2025, underlying group EBITDA was $233.7 million, a decrease of 15.5% (sic) [ 15.9% ] from last year. This reflects the difficult operating environment, particularly here in New Zealand, where reduced consumer discretionary spending plus higher level churns of our VIP customer base in Adelaide linked to the rollout of B3 have impacted our performance. We also continued to invest in compliance-related activities across the group. Reported EBITDA was $216.1 million, considerably higher than last year due to fewer accounting adjustments compared to the previous period, but it does include the one-off costs identified as part of the 3-year B3 program. Underlying net profit after tax was $71.5 million, a 42% decline, driven by lower operating earnings and higher interest costs. Reported net profit after tax was $29.2 million, showing a significant improvement compared to last year's result. These figures reflect the reality of our operating environment, the resilience of our business and the varied performance across our individual precincts. Each of our venues operates within distinct market dynamics, serves different customer segments and contributes unique strengths to our experience-based entertainment strategy. Looking more closely at precinct-level performance provides important context for how these dynamics are unfolding on the ground. Auckland does remain our flagship operation and the largest contributor to our group performance. It sits at the heart of our New Zealand operations and plays a central role in our strategic initiatives. The venue's scale, diversity of offerings and central location uniquely position it to generate value across multiple customer segments from local gaming customers to international tourists and business travelers. Underlying EBITDA for the Auckland precinct was $209.6 million, down 11.5% compared to the previous period. The main driver was a 9.4% decline in gaming revenues, which we believe attributable to the depressed New Zealand economy and a reset of our premium customer segment, which has led to lower activity levels to previous years. While we continue to participate in this segment, we expect it to generate somewhat lower revenue in the future. That said, stable visitation across our businesses highlights the underlying strength we have in our assets. We opened the Horizon by SkyCity Hotel, bringing our total room numbers in Auckland to just over 930, including the Grand and the SkyCity Hotel. Food and beverage revenue was $63.5 million, slightly lower than last year due to reduced spend per visit, although visitation remained steady. We also completed a major refurbishment of the Auckland production kitchen in the first half of the year, which will bring long-term benefits to our food and beverage operations. Hamilton's performance was also impacted by the wider economic environment with both revenue and EBITDA declining compared to the previous year. The decrease mainly due to lower income from electronic gaming machines, while revenue from table games remained steady. Gaming revenue in Queenstown was marginally higher than the previous period, supported by increased tourism arrivals. The introduction of Carded Play is going to give us better insight into our customer base in Queenstown and enable us to target our marketing more effectively. EBITDA was consistent with last year after adjusting for one-off costs related to the closure of the SkyCity Wharf Casino. We also completed the sale of surplus land at Frankton Road during the year. In Adelaide, the year was marked by 2 distinct phases. The first half delivered solid revenue growth [ through ] higher operating costs did offset this. In the second half, the uplift in AML and host responsibility processes under the B3 program did lead to an increase in customer churn, most notably among our VIP players. This has affected market share as some players have opted for venues not operating under those same standards that we apply. We are attracting new customers; however, the value is not sufficient to offset the loss of VIP players. And while these players tend to operate at lower spend levels, they do represent a more sustainable base over time. The interstate market remains a key opportunity, and we continue to invest in targeted initiatives to grow this segment, particularly by leveraging South Australia's strong events calendar and Adelaide's unique precinct offerings. Our Malta-based online casino operation, which serves the New Zealand market, experienced a decline in contribution. This was caused by the ongoing investments ahead of potential regulation and the challenges of operating in an uneven playing field. Unlike many overseas operators targeting New Zealand players today, SkyCity Malta does not advertise its online casino to New Zealanders in accordance with current regulations. Our hotels and food and beverage operations have provided a more stable source of income with 4.2 million people served in our restaurants and bars and over 280,000 room nights occupied in our hotels. These operations are complementary to gaming, and they broaden our customer appeal and provide diversity of earnings. These assets not only support financial resilience in the short term but also position us well for the future growth as market dynamics evolve. At SkyCity, our people are at the heart of everything we do and have been central to our transformation over the past year. With a workforce of over 4,500 people, we're proud of the diversity that defines SkyCity across gender, ethnicity, language and age. Over 20% of our staff identify with 2 or more ethnicities, and we're seeing increased representation across a wide range of cultural backgrounds. This diversity brings fresh perspectives, deeper community connections and a richer workplace culture. Our team speaks dozens of languages, with Mandarin, Tagalog, and Hindi among the most common after English and spans all career stages and ages, including one team member who's in his 80s. Importantly, our people are also driving the cultural transformation underway at SkyCity. Their commitment to embedding compliance in our daily operations has been critical to our progress. Whether it's through frontline engagement, leadership accountability or cross-functional collaboration, our team continues to uphold high standards and help shape a more resilient, responsible business. I want to thank every member of our team for their contribution, not just to our performance, but also to the values and integrity that underpin it. SkyCity remains deeply committed to making a meaningful impact in the communities we operate. Beyond our core business, we actively support initiatives that raise public awareness, environmental sustainability and social responsibility. From our annual Firefighter Sky Tower Challenge for the Leukemia Blood Foundation, Breast Cancer Awareness Bike Month campaign and Movember fundraising for men's health, our team consistently engage in causes that matter. These efforts reflect our belief that a successful business is part and parcel with being a responsible corporate citizen. Our Community Trusts are central to this commitment. And in FY '25, they approved $3.1 million in grants to 119 community organizations supporting projects across health, education, environmental conservation and cultural preservation. We also partner with local organizations to deliver targeted support, whether it's funding arts and culture through the Te Kowhai Print Trust or contributing to community nourishment and landfill avoidance via KiwiHarvest, our commitment is clear, we help build vibrant, resilient communities wherever we operate. As we look ahead, the handover of the NZICC will mark a significant milestone for SkyCity, the city of Auckland and also New Zealand. Once open, the NZICC will be a world-class venue for international conferences and events. Forward bookings are encouraging, and we're excited about the role the facility will play in supporting Auckland and New Zealand's visitor economy, contributing to SkyCity's long-term growth. As is typical for a project of this scale and complexity, some work will continue post-handover. We're working very closely with Fletcher Construction to finalize these remaining elements ahead of the opening in February next year. The timeline for building completion has been disappointing, and we've taken decisive action by filing legal proceedings against Fletcher Building to recover the significant losses incurred because of the delays. We did not take this step lightly. However, it is necessary in order to achieve an outcome on this matter. The handover expected very shortly will be a significant turning point for us, and we remain focused on delivering a successful opening in February next year. The NZICC will be a cornerstone of our growth strategy and a symbol of SkyCity's ambition in leading entertainment experiences. In Adelaide, we continue our commitment to the significant B3 program, now in its second year of the 3-year $60 million effort to uplift host responsibility, anti-money laundering and counterterrorism financing practices. We are continuing to close gaps. And at the conclusion of B3, we will have a compliant host responsibility and AML/CTF practices across SkyCity Adelaide Casino. As Julian spoke to earlier in his address, we're cognizant of the ongoing uncertainty created by the outstanding regulatory matters facing SkyCity Adelaide and the concerns that those create for shareholders. Whilst the Martin report published in Auckland found SkyCity Adelaide suitable to hold its casino license, the commissioner's decision on what enforcement action, if any, might follow remains outstanding. The commissioner has indicated he will assess the report in light of current conditions. If he determines there is proper cause for disciplinary action, he is expected to notify SkyCity Adelaide of the relevant matters by year-end. SkyCity will then have the opportunity to consider and respond ahead of the half-year results. While it is right that SkyCity be held accountable for past shortcomings, we feel strongly that the actions that we've already undertaken, the fines paid and the significant investments committed to and underway demonstrate our accountability and commitment to doing better, which along with ensuring the ongoing commercial viability of the casino should all be considered by the commissioner in his assessment. A further priority for us in the ongoing review of our asset portfolio, we are committed to recycling approximately $200 million of assets to support our balance sheet and reduce debt. We're aggressively pursuing the monetization of the Auckland car parks and have property-specific advisers providing advice on other potential options to ensure we can achieve an outcome in the next 12 to 18 months. We'll keep you updated as we make progress over the coming months. We're actively preparing for the introduction of regulated online gambling, including license applications in both here in New Zealand and Malta. The anticipated launch of regulated online casino gambling in New Zealand presents a meaningful opportunity to diversify and grow our revenue. While the cost of these licenses remains uncertain, once we know more, we'll take a disciplined approach to determining their value. In parallel, we're also progressing the renewal of our Queenstown casino license, with our Hamilton license scheduled for renewal in 2027. Disciplined capital management is central to maintaining our investment-grade credit rating, particularly given the current negative outlook. This financial flexibility is critical as we continue to invest in growth initiatives like the NZICC and our online expansion. Looking ahead, capital adequacy will also become a key consideration in assessing the suitability of online gambling license applicants. And so with that in mind, we'll continue to prioritize the strength of our balance sheet and keep you informed as these priorities are delivered. We're very grateful to our shareholders for supporting our recent equity raise and assure you that we are highly focused on improving the business's performance to ensure the long-term sustainability of SkyCity. Turning now to an update on our trading and the outlook for the remainder of the year. Although the broader economic environment remains challenging, there are early signs of stabilization in the New Zealand economy. That said, trading across our New Zealand precincts in the first 3 months of FY '26 has not revealed any noticeable improvement in consumer spending. Pleasingly, visitation remains strong, and we have a solid pipeline of NZICC events with over 4 months of operation in FY '26. And this contributes to our previous guidance of a second half FY '26 earnings skew. As a consequence, our outlook remains unchanged, and we are reiterating our FY '26 earnings guidance provided in August of underlying EBITDA to be between $190 million and $210 million, excluding B3 costs and FY '26 reported EBITDA guidance of between $170.6 million and $190.6 million, inclusive of B3 costs. NZICC and online investments, along with the impact of Carded Play, are in line with our expectations previously shared, and we're also making good progress on cost savings and expect to achieve the targets we've set. We will provide an update on the progress against our priority actions at the half-year results. FY '26 is likely to be the trough year for our earnings, and we remain positive about the outlook for FY '27 with the NZICC delivering a full year of exciting events and increased visitation as we continue to build out the pipeline of bookings without the operating or the opening costs incurred in FY '26. We expect our online gaming activities will move from investment to operating mode. Carded Play should be well embedded, and we will be utilizing the increased customer data to enhance our returns. And we would expect to see the benefits of an improving New Zealand economy with higher spend levels. To close, I'd like to acknowledge our team. Our people have been central to our transformation. We've refreshed our organizational values through an inclusive process, and we're seeing a cultural shift that will be critical to our long-term success. I thank our team for their commitment and high standards and our customers for choosing SkyCity. The year ahead will be [ pivotable ]. The NZICC will transform Auckland's events markets. Our transformation programs will strengthen our operations, and the online gambling market will open new growth opportunities. While challenges remain, we're entering the next phase with confidence and the capabilities needed for success. I'll pass back to Julian to commence the formal ASM business. Thank you.

Thank you, Jason. All right. Before we move to the formal resolutions set out in the Notice of Meeting, I will briefly outline today's voting procedures. Voting will be by way of poll. Persons attending the meeting who are not shareholders, proxy holders or corporate representatives of a shareholder may not vote on today's resolutions. For those attending online today, select your voting direction from the options shown on your screen. Your vote has been cast when the green tick appears on your screen. To change your vote at any time before voting closes, select Change Your Vote on the screen. For those attending in person today, please complete and sign your voting paper and place your completed voting paper in one of the ballot boxes on your way out of the theater at the close of the meeting today. Many shareholders who are not attending this meeting have already voted by proxy. Approximately 795 million proxy votes, representing approximately 72% of the shares on issue were received prior to the cutoff for proxy voting at 10:00 a.m. on Wednesday, 29 October. We have also provided detail of the proxy voting for each of the 3 resolutions. We now move to the 3 formal resolutions to be considered by the meeting. There will be an opportunity for in-person shareholder questions after each resolution is moved. To ask a question, please make your way to the end of your row and use the microphone. Please limit your questions at this time to the specific resolutions. There will be an opportunity for general questions at the end. Please have your attendance card or voting form with you and introduce yourself and note whether you are a shareholder or a bondholder. To ensure all shareholders have a fair opportunity to ask questions, we will be limiting questions to one per shareholder per resolution. The first 2 items of business concern the reelection of directors. In accordance with the requirements of the NZX listing rules, Kate Hughes and Glenn Davis will retire at this meeting and being eligible, offer themselves for reelection. It is my pleasure to move Resolution 1 to reelect Kate Hughes as a Director of the company. Kate was appointed to the SkyCity Board in September 2022 and elected by shareholders at the annual meeting in that year. The Board considers Kate to be an independent director and unanimously recommends that shareholders vote in favor of her reelection. I now ask Kate to address the meeting.

Thank you, Julian. Good morning, everybody. It's a privilege to address you today as I seek reelection to the SkyCity Board. 3 years ago, I joined SkyCity, and I could see the challenges ahead for us. They were not small insignificant challenges. They were complex and they required careful management, and they still do. When I put my hand up for reelection, it was because I believe we still have some way to go. And I think my deep experience in risk management and compliance can help SkyCity be the successful business we all want it to be. We've made some good progress, as outlined by Julian and Jason this morning. But along the way, a few more challenges have emerged, and we've had to make some difficult and unpopular decisions. We did that in the best interest of long-term sustainability for SkyCity. I'm not here to tell you that I want us to return to what SkyCity was, but because I think it can be better than ever. Nothing worth doing right comes easy and nothing gets achieved by stepping back before the job is done, and it's not done yet. SkyCity is navigating a dynamic operating environment, and I remain committed to supporting its long-term success through strong governance, prudent risk management and a real focus on sustainable long-term growth for the business. Thank you so much. I appreciate your continued confidence.

Thank you, Kate. I move that the meeting reelects Kate Hughes as a director. Are there any questions from the floor relating to this resolution?

No.

Are there any questions online relating to this resolution?

There are no online questions relating to this resolution.

Thank you. I have moved the resolution, so now I put the resolution. Shareholders should select their voting direction for Resolution 1. It is my pleasure to move Resolution 2 to reelect Glenn Davis as a Director of the company. Glenn was appointed to the SkyCity Board in 2022 and elected by shareholders at the annual meeting in that year. The Board considers Glenn to be an independent director and unanimously recommends that shareholders vote in favor of his reelection. I now ask Glenn to address the meeting.

Thanks, Julian. Good morning, ladies and gentlemen. I joined both this Board and the SkyCity Adelaide Board 3 years ago. And the purpose of my appointment to our Australian subsidiary was to help oversee as Chair of the Adelaide Board, the remediation of that business from a regulatory perspective and to contribute as a director at the [indiscernible] level, utilizing my broad-based and diverse experience in publicly listed and large private companies over many years in manufacturing, resources, retail, property, seafood and primary production industries. In Adelaide, the size of the task was enormous. The light is now appearing at the end of the tunnel. The suitability finding by the independent review, renewed and refreshed resources in the business and a recent newly approved amended program of work have us on the right pathway. We're building momentum to getting the business to where it needs to be from a regulatory perspective, and we will get there. At the same time, I and the rest of the Board have been and remain focused on the need for Adelaide to create value for shareholders, something it presently isn't doing. But Jason and the team are working hard to get us to that point. I'm the type of person having started a job is keen to see it through to conclusion. I stand for reelection today on that basis. Having started the change in Adelaide, I'm committed to seeing it through with the team if shareholders so agree. Wearing my [indiscernible] hat, it's an equally challenging industry here in New Zealand from a regulatory perspective and the sluggish economy in New Zealand is a complicating overlay. But again, having commenced the risk maturity program here in our New Zealand businesses and resolved historical issues, I'm keen to continue the job having reset the business of getting the NZICC up and running, starting our online gaming journey, continuing our transformation program and executing on the capital management plans we've discussed with the market and this morning. Whilst I have the floor and before I conclude, I do want to take the opportunity this morning to thank the teams both here in New Zealand and in Australia for the hard work, the commitment and the resilience that they've shown. It hasn't been easy. But I do hope like me, they can now see the light at the end of the tunnel, and we can all run towards that light together as a team. Today, I seek your support for my reelection, and I look forward to my next term and concluding with the team what we started. Thanks, Julian.

Thank you, Glenn. I move that the meeting reelects Glenn Davis as a director. Are there any questions from the floor relating to this resolution? No. Are there any questions online relating to this resolution?

There is one online question relating to this resolution. It's rather lengthy, but I will read that out in full. We went into a trading halt at 1:51 p.m. on August 19 and then 51 minutes later, the Australian Financial Review Street Talk column reported at 2:42 p.m. that investment banks, Macquarie Capital, Jarden and UBS have hit the pavement for Casino Group SkyCity Entertainment, rounding up investors for a capital raising ahead of its 2025 financial results. The detail on the New Zealand $24 million capital raise weren't announced to the market until 2 days later with the full year results at 9:05 a.m. on August 21. Who was responsible for selectively leaking Australian journalists about this capital raising before any comprehensive announcement to the ASX and NZX. Also whose idea was it to limit the ability for retail shareholders to apply for additional shortfall shares to just 60% of entitlement, which finished New Zealand $30 million short. As an Australian-based director who chairs an ASX-listed company, Elders, does Glenn Davis believe these selectively briefings of Australian media were appropriate?

Do you want to take that, Julian?

Yes. Insofar as the inference is that there was some selective media briefing from SkyCity about the capital raising. It's just firmly denied and frankly, it's just abject nonsense. That's not the behavior that SkyCity conducts itself and would never do. In terms of the capital raising and the way it was structured, it was structured in that manner as the person asking the question probably knows, I suspect, because it takes away a lot of risk in terms of structuring in the manner that we did. And it also means that the discount while steep, would have been even more significant if we structured it in an alternative manner.

There are no other online questions relating to this resolution.

All right. Thank you. I have moved the resolution. So now I put the resolution. Shareholders should select their voting direction for resolution 2. Resolution 3 involves the setting of the remuneration of the auditor. PricewaterhouseCoopers is the auditor of SkyCity, and that firm has indicated its willingness to continue as auditor of the company. I move that the directors be authorized to fix the auditor's remuneration. Are there any questions from the floor relating to this resolution?

No.

Are there any questions online relating to this resolution?

There are no online questions relating to this resolution.

Thank you. I've moved the resolution. So now I put the resolution. Shareholders should select their voting direction online for Resolution 3. Thank you for your attendance to the resolutions. That concludes our discussion on the items of business. Voting will shortly close online. Please ensure that you have cast your vote on all resolutions. For those attending in person, please sign and place your completed voting paper in one of the ballot boxes on your way out of the theater. All votes will be counted and then scrutinized by the company's share registrar, Computershare. The results will then be advised to the New Zealand and Australian stock exchanges later today. I will now pause to allow those voting -- attending online to finalize their votes before voting closes. [Voting]

Voting is now closed online. Thank you. To conclude the meeting, we will now take questions on general matters. In the Notice of Meeting, we invited shareholders and bondholders to submit questions prior to the annual meeting. Were there any questions submitted prior to the annual meeting?

Yes, Julian, there were 2 questions submitted prior to the annual meeting. They are both from [ Weikun Zhao ]. The first relates to SkyCity Adelaide financial performance. Since 2014, when the first refurbishment began, SkyCity has continually invested in the Adelaide property. However, it appears the operation has not yet fully realized its potential due to construction, COVID-19 regulatory challenges. When does management expect SkyCity Adelaide to operate at full potential? And could you provide an indicative range for both gaming and non-gaming revenue once the operation reaches optimal performance?

I'll ask Jason to address that.

Thanks, Julian. Adelaide has been through a significant transformation, particularly with the B3 program that I spoke about earlier, and that's our 3-year $60 million program to uplift host responsibility and AML and CTF practices. And it's really reshaping the way that we operate in the South Australian market. In the short term, the impact of that is it's meant that we've churned some of our VIP customers. Customers have chosen not to play with us anymore because of the new requirements or we have chosen to prevent them in playing with us. That's the right thing for us to do for the long-term health of our business and to ensure we fully meet all of our license obligations. In FY '26, we do expect the environment to remain challenging in Adelaide as it was in '25. But in '27, we're hopeful to see some improvements. We do finish the B3 program in June 2027. And so that will enable us to stop the expenditure of around about $20 million a year there and conclude that program. And so that will naturally result in an uplift in earnings for that business. As I mentioned before, we absolutely recognize the uncertainty created by the regulators' outstanding decision on the enforcement actions there, if any. And as I mentioned, we're continuing to engage with the commissioner and the regulator and the market to understand what's expected of us and what we need to do and to ensure that we are doing everything that we can. We haven't provided any specific guidance on future earnings for the Adelaide business. Our focus right now is on stabilizing the margins, managing costs as best as we can and ensuring we meet all of our commitments for the B3 program I've outlined.

The second question was relating to the SkyCity Auckland's EBITDA margin. Before COVID-19, the normalized EBITDA margin for SkyCity Auckland consistently ranged between 47% to 50% for over a decade. Post COVID, even excluding the heavily affected years of 2020 and 2022, the normalized margin has remained around 40%. How does management view the future trend in margins? Do you expect them to recover to pre-COVID levels or remain around 40%? And what are the key factors influencing this outlook?

And I'll just ask Jason to address that again.

Thank you. Yes, the person who asked the question is correct. Our margins have come down significantly from pre-COVID levels. We don't expect them to return to those pre-COVID levels. However, we do see scope for improvement versus the current margin levels of our business today. The main driver in improving margins right now is going to be us very tightly managing costs, which we're focused on. The opening of the convention center will increase visitation to our Auckland precinct here. And as we fully ramp that building, we expect to see 500,000 delegate days a year. And that increased visitation will flow through into our hotels and our food and beverage offerings and also hopefully onto our gaming floor as well. The New Zealand economic recovery, which we are hopeful we'll start to see signs of towards the back end of next -- of this financial year and into the following financial year, we're hoping will give us an uplift as well. I spoke about the reshaping of our premium gaming segment as well. And so we have seen slightly lower earnings from that particular customer segment, but we are working hard to rebuild that business as well. So as we start to see these initiatives that I've just spoken about take hold, there is an expectation that margins will improve over time, but we don't expect them to return to the levels that they were pre-COVID.

Next, we will address the questions received online. Please note that questions may be moderated or if we receive multiple questions on one topic amalgamated together. Are there any online questions?

Yes, Julian. There are a few online questions. The first is from Stephen Mayne in relation to remuneration. I asked at last year's AGM if the Chair would commit to having a formal Board discussion about putting up the SkyCity remuneration report for a nonbinding advisory vote at this year's AGM complying with the approach in Australia. Since we are an ASX-listed company and operate the Adelaide Casino, shouldn't we embrace Australian governance standards? If not, don't we risk New Zealand being viewed by international investors as a governance backwater given that remuneration report voting has become standard in many countries. Did you discuss it? And why didn't you do it? And what about next year?

Yes. Thank you for the question. We have discussed it. We are not intending to do that. I'd note we are fully in compliance with NZX and New Zealand company law and that New Zealand Shareholders' Association supports the position we take.

Second question from Stephen Mayne relating to ASX-listed Star Entertainment Group has had challenges over the last 2 years with the shares trading below $0.10 and casinos in Sydney, Brisbane and the Gold Coast struggling to generate profit to keep the company afloat amidst a number of regulatory attacks, cost blowouts and falling gambling revenues. A variety of parties have engaged with the company over potential actual transactions to keep it afloat. Have we had a look? And do you believe the Adelaide Casino is in a better place than Star's 3 Australian properties?

We do obviously keep close eye on the Star properties. If we were to look at the reduction in earnings across the Star properties in Adelaide, they would be probably broadly similar at the moment. Although if we were to strip out B3 costs, I think we would be in a better position. So I think, fortunately, we're managing to -- hard as it is, managing to get our way through in Adelaide.

A question from Darren Rickard relating to the Adelaide Casino. Question is, why don't you sell the Adelaide Casino, it's never made money.

Fair point. Well, to be fair, it has made money. Look, I think our focus is remediation of that casino. We are making good progress as Glenn and Jason has outlined in the B3 program. We have received suitability. I would note that we were the only one of the casino operators in Australia who went through the state government inquiries to come out with an initial finding of suitable. So it's been a lot of work and it's been hard, but we're happy to have got that. As we've noted also, there is still much work to do before we are fully compliant, and we need to finish the B3 program. But I think our focus is on working through that. However, we also acknowledge that the returns to shareholders have been very poor, and we will need to address that, and we will need to think about how we do that.

Julie. Another question from Darren Rickard. Why did you not sell the buildings in the Auckland Casino and lease them back instead of undertaking a capital raise?

It was -- that was considered by the Board. The reality was that we had a very sharp decline in earnings over a short period of time, particularly through the second quarter of 2025. We also had a pushout on the NZICC handover time. So we saw a fairly rapid deterioration in the credit position for the business. So, a, did not give us a lot of time; and b, we have thought about sale and leaseback of casino properties previously. But the reality is if we were to do that, it would leave the SkyCity residual business with a very, very large rental bill each year, which would create questions over ongoing sustainability and viability.

The final online question from Darren Rickard. Can you make the annual and interim reports simple instead of the complex terms they have become?

I empathize with you. They have been highly complex and very lengthy. I think we are in the progress -- process of shortening these things up. And I would like to think over the next couple of years, we will be more concise and more to the point. Next, one.

That's all.

Right. Thank you. Next, we move to questions from the floor. As noted earlier, to take a question -- ask a question, please make your way to the end of your row to use the microphone. Please have your attendance card and voting form with you and introduce yourself and note whether you are a shareholder or a bondholder. To ensure all shareholders have a fair opportunity to ask questions, we will be limiting questions to one shareholder -- sorry, one question per shareholder, if possible. Any questions here?

Riki Manarangi, New Zealand Shareholders' Association. So there are -- because I'm representing others, obviously, there's going to be more than one question, if that's okay.

That's fine.

Cool. First question, noted that the $240 million equity raise was necessary to protect the investment-grade credit rating and avoid covenant breaches. Given the significant dilution to existing shareholders, what specific measurable milestones will the Board use to determine the optimal time to recommence dividend payments? And what is the current internal time line for this?

Yes. So you all know that about a year ago, we did suspend dividend payments. The Board is acutely mindful of the fact that shareholders have had a fairly poor experience and not received dividends from some time as well as a share price, which has declined. Our key focus is on making sure we get our credit position to one which is going to be stable on a long-term basis. We would like to get to from a BBB minus to a BBB plus. In order to do that, we need to sell in the order of $200 million of assets. We have a program which will achieve that over the next 12 to 18 months. Once that money is received and has been applied to debt reduction, we think provided earnings are stable to growing. The credit position of the business will stabilize, and we should be in a position after that to recommence dividends.

The report mentions a target of $200 million from monetizing nonstrategic assets to further reduce debt. Can you provide more detail on which specific assets are considered nonstrategic and what the expected time frame -- time line is for these sales? What is the risk that a forced sale in a weak market could realize less than the fair value?

Well, look, we're mindful that we don't want to be a forced seller. Again, this is one of the reasons for pursuing the equity raise. So the time frame, as we've said, is sort of 12 to 18 months. And certainly, I think from a property perspective, we are seeing in the commercial space a recovery to that market and the drop in interest rates within New Zealand is certainly helping that. As to the extent of the assets that we are looking to sell, we've indicated that we're looking to sell concession over the Auckland Car Park, which is still -- that process is underway, but we have also widened the net to include some other commercial property assets, which we have. We don't want to be more specific on that at this point.

You spoke about the structural reset of earnings due to increased compliance and the impact of carded play. Can you quantify what you believe the new sustainable baseline EBITDA is for the core business, excluding contributions from the convention center crossroad and the potential online license?

Difficult. Do you want to take that?

Yes, I'll take that one. Yes. Riki, we've given guidance in FY '26 of between $190 million and $210 million of underlying EBITDA for this financial year. And in terms of looking forward, the guidance we gave in August was we expect FY '27 to show signs of recovery as we finish the convention center and we open that in February, and therefore, that investment that we've been making there stops and we move into operating mode and we get 12 months of revenues and over the top of operating costs and no more investment. And also with the online business when we move from investment mode into operating mode. So you get to add those costs back that we've been incurring this year. So that sort of gives you a bit of an idea of what we think '27 -- FY '27 will look like. Beyond that, we haven't given any guidance at the moment.

Excellent. The investment required -- talking about online gaming, investment required for New Zealand online casino license is noted as significant in the report. Given the potential for up to 15 licenses in a highly competitive market, what gives you the confidence that SkyCity can achieve a return on investment that justifies the capital outlay and become the local hero, that's one of your terms. What is your projected market share and payback period?

Okay. Thanks for the question. The online market, it's -- we believe it's going to be a significant opportunity for us. A couple of key things to note. It's an existing market today. So today, Kiwis play online with operators around the world in an unregulated market. And that market has been sized to be around about $700 million. So it's quite significant. So we're very supportive of the New Zealand government's initiative to legislate and regulate that market so that Kiwis can be protected, and harm can be minimized. In terms of ourselves, we believe the fact that we've been operating here for 28 years. We've got a strong brand that's known by Kiwis, well respected. We receive more than 10 million visitations every year. So we know Kiwis enjoy our hotels, our restaurants and our gaming facilities. And so we're very, very focused on transferring those capabilities into the online world. We've been operating for about 4 or 5 years now sort of learning and finding our way. And so we very much look forward to the ability to apply for a license and to go online.

In terms of the convention center across the road, regarding the legal action against Fletcher Construction for $330 million, what's the expected time line for this process? Is the Board confident in the strength of this case and has provisioned for the significant legal costs involved?

Well, we wouldn't be taking the case unless we thought it was pretty good. And as to the time frame, courts take a while, I think, would be the short answer. So it's a little hard to know exactly when that will all happen. But in the reality, I think it's probably over a period of years.

It's a huge investment, the NZICC beyond the 23 confirmed events, one is the strategy to ensure it doesn't just become a low-margin utility and actually drives a significant high-margin visitation to the adjacent casino obviously over here, hotels and restaurants. What are the specific cross-promotion strategies in place?

Yes, great question. We're super excited about getting the building open in February next year. The pipeline of events is really, really neat. Some of you may have seen we've recently launched and announced the first events in the theater. They've gone on sale. And certainly, the early events have been sold out, which is really, really encouraging. In terms of monetizing the asset itself across our precinct, that journey really started with the design of the building and physically connecting it to the Auckland precinct. So as a delegation -- sorry, as a delegate attending a conference, you'll be able to stay in the Horizon Hotel, attend the conference during the day and then through the air bridge, walk across in the evening to come and have a meal at the Fortuna buffet or perhaps at Huami and then head on to the gaming floor and have a bit of fun. And then if you want to see the sites, you'll be able to head up the Sky Tower. So that's how we see the NZICC providing benefit to the broader Auckland precinct.

Going across to Adelaide, the B3 program. It's a 3-year $60 million commitment. What are the key leading indicators? You touched on some of them beyond regulatory check-ins that the Board is using to assure itself that the cultural and operational changes in Adelaide are truly embedding and will be sustainable long term after the program concludes.

And so how many more questions have you got?

There's only 3 more.

Three more, okay. Because I just consciously...

Absolutely, absolutely.

But we will get you. So what are the lead indicators? I think there's probably 2 to my mind. We have a very lengthy program, which has been agreed between ourselves, the regulator and Kroll, who monitors our performance against that. Within that, there are some 300 sort of packages of work, which need to be completed, which relate to all facets of governance, anti-money laundering controls, host responsibility and a host of other things. And one of the key metrics that the Board watches in terms of that is are we closing those packages in accordance to the time frame, #1. And #2, how much rework, if any, is being required from the regulator or Kroll on packages which we are submitting. Ideally, we are able to submit these packages in a sort of fully finished state and have them approved and through with the minimal changes. So we watch those 2 things very closely. The final one from a cultural perspective is there's certainly a much more in-depth approach to surveys with staff and particularly diving into hotspots such as our financial crime teams, our host responsibility teams to make sure that they feel supported, they are getting the training they need. They have the time they have to do their jobs that they feel confident in reporting issues that their managers support them if they see issues and that we have a culture of fleshing out and identifying any sort of issues within the business and addressing them.

Noted, I am saying a lot myself, but I'm representing others and some of these questions will be of interest probably to all the other shareholders. The 5-day closure of Auckland Casino for host responsibility failures occurred after SkyCity had already committed to its transformation programs. What specific breakdown in the new controls allow this to happen? And what has been changed to ensure similar failure cannot occur again?

So we closed it in September of '24 and the actual case, which it related to was from...

Related to a previous matter. So the failure, which was specifically the issue occurred before those transformation programs.

So it was the controls, which did not work in that case were in place prior to the -- basically the transformation program, which we had put in place. The actual regulatory action from the Department of Internal Affairs took us a year or 2 to work its way through the system before we agreed to shut the casino.

And on Page 44, a sustainability question. The report explicitly states that with the new Horizon Hotel and NZICC you cannot meet our existing -- sorry, carbon commitments without fundamental changes to our approach and are considering rebasing them. Does this represent a significant step back in your environmental commitment? And how do you reconcile this with being a responsible corporate citizen? What is the new plan?

Yes. As a consequence of 2 pretty significant buildings joining our precinct, we've had to sort of step back and have a look at what our climate-related goals are as an organization, much like a number of New Zealand companies are doing at the moment. So we've said that we're going to take a period of time to do that over the next 12 months and reassess where things are at as a consequence of the precinct growing essentially by an extra city block.

There are some other questions, but I'll let the microphone rotate and they're a bit more straightforward, these other ones.

Just on the front there [indiscernible].

I'm rather disappointed that we haven't had a video with a little sneak peek through the convention center. But what I really want to know is it seems to be there's a big -- something big for thousands of people coming from overseas to fill up your time at the convention center without addressing the possibility of local conferences. And so I want to know, can you screen off and run simultaneously a number of small local conferences at the same time without the sound going between the rooms.

Yes. Okay. Yes, fabulous question. The answer to all your questions is yes, yes. So a couple of things. If I think about the forward bookings that we've got, we're close to 90 bookings next year. Probably only 30 of those are from overseas. The rest of them will be local conferences. We've got some school balls. We've got local community groups coming in. We've got professional -- New Zealand professional associations booking the convention center. In total, there are 32 rooms available in the NZICC that people can come in and rent for functions. And we also have 3 separate entrances for the NZICC, one of Nelson Street, one of Wellesley Street and one of Hobson Street. So yes, we can do all of those things you spoke about.

That's very encouraging because I go to quite a few convention centers. Ellerslie is awful now. You can't park anywhere near. You have to walk down and upstairs and through a tunnel to get to the venue. And so they apologized at the last meeting that we had to go there because they had been bumped from Eden Park, which is a good venue. So getting back to parking again, you want to sell off your car parks. This is a strategic advantage to this convention area. And if you lose control of your car parking and it becomes horrendously expensive, people will go elsewhere locally anyway. You'll have your overseas people come in who haven't got cars and they'll stay at the Horizon and that's it. But you still need to think of the local component of the money that can be made from that convention center, which I really want to see it succeed.

Yes. Yes, we want to see it succeed as well. I agree with you about car parks being strategically important for local New Zealand investors, absolutely. We're not selling the car parks. We're selling a concession to operate them. So we will still own the land and own the physical structures, but we're going to allow someone to operate them for us in exchange for giving us hopefully significant proceeds. We will, as part of that agreement, make sure that they can't go crazy with pricing. Yes, we're very conscious about that.

Gentleman down here.

Martin Kellett, shareholder. I've been listening to what you've been saying, and I do have a concern. It's relating to the priorities of this Board. As I understand it with the economics background, normally monopolies assure a company of normal or even super normal profits. The Auckland Casino has an artificial monopoly for the Auckland region. There is only one casino license by government for this area. Same applies to Hamilton. That's another artificial monopoly. Same applies to Queenstown. That's another artificial monopoly. But you're speaking about now diversifying. You mentioned Malta as losing money, and that's your stepping stone into this extended area of operations with no proven profit showing. Your comments about Australia and Adelaide, nobody has mentioned was a disastrous investment by SkyCity and the Darwin casino, it crashed and burned on the countryside. I'm just asking, surely, you need to start sticking to the knitting and enforcing what you have here in New Zealand, looking at New Zealand and enhancing what you have now, not racing off another tangent as Air New Zealand did with a group called Ansett Airlines. They had to cut off the leg to save the body. So I simply do plead to you make sure -- otherwise, we're just racing off. You haven't been -- I wouldn't back you as a horse. You've lost so many of those monopoly situations right now. And now you are planning to go into a pond...

So [indiscernible] to answer the question.

Yes. Do you intend to go in as a minnow into a pond for...

And specifically, you're referring to Malta.

Malta was a stepping stone.

Malta -- yes. What the Malta business is, is our online casino, which offers services into New Zealand. It is nothing more than that. We have no plans to go to Malta and buy casinos or anywhere else in the world. It is simply that. And I think your analogy of sticking to the knitting is if you look at our strategic plan for the next few years, that is pretty much what we are planning to do, run what we have and run it well.

So you are going [indiscernible] online gambling...

We are already in online gambling in New Zealand. That business is run by a subsidiary in Malta. But we are not planning to go outside of New Zealand in terms of any of the services we offer to consumers...

[indiscernible] money already on that idea.

Noted. Any other questions?

[ Michael Belden], shareholder. What is the occupancy rate in your hotels? And how does that compare across the industry?

We're very fortunate with our 3 hotels here on the Auckland precinct owing all joined up that we benefit from a slightly higher occupancy than the rest of the Auckland market. So we're averaging in the early to mid-70 percentages at the moment to give you an idea. So that typically could be as much as 5 to 10 percentage points of occupancy higher than the rest of the market. What we've seen over the last 7 or 8 years is the building of a number of significant new hotels here in Auckland that have increased supply by almost 30% ahead of and with the anticipation of the NZICC opening. So we believe that our occupancy levels will improve significantly once we open in February next year. And just because of the physical presence of our hotels here on our precinct and as I spoke about before, connected with the averages, we expect to be the first to benefit from all of these conferences that we're bringing to town.

Thank you. Any other questions in the room down here?

Ross [indiscernible], shareholder. With your loyalty schemes and that we had our premier cards in the past, and now we've got these new SHOW Me ones. I've had no mail out in over a year explaining what was going to happen, what the new advantages were. It's like you've forgotten this. Like this was raised at last year's AGM and you said you're going to have a whole new enhancement, but we haven't heard anything.

Okay. Look, I apologize for that. Perhaps afterwards, I can come and find you, and I can check to make sure we haven't lost your details. So I apologize for that. We're thrilled about the new loyalty program SHOW by SkyCity. We're signing up more than 5,000 customers a week. So we are excited about it. And I'd love for you to be able to benefit from the new offerings that we have there. So I'll come and find you after the meeting.

Any more questions in the room, down the front?

Thanks. I know that I'm standing between us and some light refreshments. So these are a bit more straightforward. Could the Board confirm the company's policy on political donations?

We are -- well, what are we doing? We're developing a policy on that. We have made them in the past. We did stop for a period. We may start to make donations into the future, albeit they'll be fully disclosed and relatively minor in the scheme of things.

Thank you, Julian. The annual report includes a collective skills matrix. Will SkyCity enhance the skills matrix to show individual directors' skills?

I don't know. Well, I'm not sure actually, we could always consider it. I don't know if other companies do it, but...

Sorry, can you just ask a question again?

So basically, you've got your skills are collective in terms of how you outline them in the annual report, but how everybody individually contributes.

On each individual director.

Correct, yes.

We'll consider; we'll consider. But if you've got any examples of people who do, please send it to us.

Perfect. I'll get Oliver to send this. NZSA expects NZX 50 companies to participate in IOD Future Director program in future, does SkyCity intend on participating in that?

Not something we have considered. I've been involved in another business where they have. It's been a fairly intense period for us for the last few years. So probably weren't the most attractive place for a future director to come, but it is something that the Board should probably discuss, and we'd be open to thinking about it.

Noted. And what's the total tenure of the audit firm PwC.

Tenure of the PwC, I think it's been since IPO, but the audit was last tendered 8 years ago.

And any other questions, going once, twice. Right. Well, thank you very much. That brings us to the end of the meeting. For those in attendance, light refreshments are available in the foyer at the close of the meeting and representatives of Ngati Whatua Orakei will now formally close the meeting.

[Foreign Language] on behalf of SkyCity and on [Foreign Language] of Ngati Whatua Orakei, I extend our acknowledgments to you all for your time, [Foreign Language] and your contributions today. [Foreign Language] As we open [Foreign Language] we continue to close in the same way, bringing together our collective [Foreign Language] our thoughts and our [Foreign Language] back to balance. [Foreign Language].