27 October, Client Market Services NZX Limited Level 1, NZX Centre 11 Cable Street WELLINGTON

Transcription

1 27 October, 2015 Client Market Services NZX Limited Level 1, NZX Centre 11 Cable Street WELLINGTON RE: SKYCITY ENTERTAINMENT GROUP LIMITED (SKC) SKYCITY appoints contractor for New Zealand International Convention Centre and Hobson St Hotel Please find attached our announcement relating to the above. Yours faithfully Peter Treacy Company Secretary SKYCITY Entertainment Group Limited Federal House 86 Federal Street PO Box 6443 Wellesley Street Auckland New Zealand Telephone +64 (0) Facsimile +64 (0)

2 27 October 2015 SKYCITY appoints contractor for New Zealand International Convention Centre and Hobson St Hotel SKYCITY has today announced the next major milestone in the development of the New Zealand International Convention Centre (NZICC) with the appointment of Fletcher Construction as the main contractor for the NZICC and Hobson St hotel projects. Please find attached a Media Release & Investor Presentation which provides further information and detail on the announcement. Nigel Morrison, Chief Executive Officer, and Rob Hamilton, Chief Financial Officer, of SKYCITY, intend to hold an analyst and investor teleconference call at 2pm NZT (12pm noon AEDT) today to discuss the key points of the announcement. There will also be a brief opportunity for questions during the call. You can participate in the call by dialling one of the following numbers: Location Number Location Number Location Number Australia Ireland Sweden Australia Sydney +61 (0) Italy Switzerland Belgium Japan Taiwan Canada Malaysia Taiwan Taipei China Netherlands Thailand France New Zealand United Kingdom Germany Norway United Kingdom +44 (0) Hong Kong Philippines United States Hong Kong Singapore US New York India Singapore Indonesia South Korea After dialling in you will be greeted by the operator and asked for the CONFERENCE ID. Once this has been quoted, you will then be asked for your name, company and the country you are calling from. CONFERENCE ID: We would ask that you dial in to the conference 5 to 10 minutes before the call is scheduled to take place. The call will be closed off at 2pm NZT and we will not accept late entrants.

3 If you wish to ask a question, please dial *1 to join the question queue (you may do this at any time during the call). If you wish to cancel your question and leave the queue, dial *2. A replay will be available approximately 2 hours after the conclusion of the conference call (ie. after 4pm NZ time / 2pm AEDT). To access the replay, dial a telephone access number (listed below) and enter the replay passcode followed by the # key. Replay Dial in Number (1800) Replay Dial in Numbers (Sydney) Replay Dial in Numbers (Melbourne) Replay Dial in Number (Int l) See below for specific International Toll Free country access Location Number Location Number Belgium* Malaysia Canada Netherlands China New Zealand Denmark Philippines France Singapore Germany* South Africa Hong Kong South Korea India Sweden* Indonesia Switzerland* Ireland Taiwan Italy UK Japan USA Replay Passcode Replay Availability 7 Days Replay End 29/10/15 23:59 AEDT Date For more information on the content of this announcement please contact: Investors Ben Kay Investor Relations & Corporate Development Manager DDI: ben.kay@skycity.co.nz Media Kelly Armitage Group Communications Manager DDI: kelly.armitage@skycity.co.nz 2

4 MEDIA RELEASE 27 October 2015 SKYCITY and Fletcher Construction form partnership to build New Zealand s International Convention Centre and hotel $700m investment in Auckland tourism infrastructure Partnership: The new NZICC and Hobson Street hotel will be built together, resulting in a construction project worth $700m and creating at least 1000 construction jobs over 3 years. SKYCITY Entertainment Group and leading New Zealand construction contractor Fletcher Construction have announced a partnership to build the New Zealand International Convention Centre and a new 5-star hotel. In a major milestone towards the landmark development becoming a reality, SKYCITY Chief Executive Nigel Morrison announced SKYCITY has agreed the terms of a binding, $477m contract with Fletcher Construction Company Ltd to build and complete the design of the NZICC, the 5-star, 300-room Hobson Street hotel, the retail laneway linking Nelson and Hobson streets, and 1327 carparks under the NZICC. The parties are confident the work can begin by Christmas. The construction projects will create at least 1000 jobs during their 38-month build, plus approximately 1140 positions across conventions, hospitality, retail, gaming and food and beverage once both the NZICC and the new hotel are operational.* Including all other associated costs, including land, fit-out, and contingencies, the projects represent a $700m total investment by SKYCITY in the Auckland economy.

5 The NZICC is one of the most significant building projects in Auckland since the construction of the Sky Tower also built by Fletcher Construction 18 years ago. Fletcher Construction will build the 32,000 sqm convention centre and a new 300-room, 5-star luxury hotel simultaneously, providing a huge boost to the local construction market and kick-starting a five-year inner-city building boom estimated at putting $6 billion into the local economy.** Building boom for Auckland Transformation: The view from Nelson Street looking down the laneway to the Hobson Street hotel. The project will transform a derelict area of Auckland s CBD into a lively precinct for locals and visitors alike, kicking off a major building boom for Auckland. SKYCITY and Fletcher Construction have entered into a binding commitment letter which records the agreed commercial and legal terms of the building works contracts for the NZICC and Hobson Street hotel. Formal signing of the two building works contracts is expected in November, once a small number of outstanding matters have been satisfied, including finalising insurance and specific requirements under the NZICC Agreement with the NZ Government. Fletcher Construction is New Zealand s leading construction contractor. It is a division of Fletcher Building, one of New Zealand s largest publicly-listed companies, which has been in operation since Mr Morrison says the agreement with Fletcher Construction was a huge step for both SKYCITY and the NZICC project, and signified the beginning of a new phase in the planning of the tourism and infrastructure facility. Today is a watershed moment for SKYCITY. This day has been years in the planning. I m delighted to able to announce this construction partnership with Mark Adamson from Fletcher Building and his construction team, who share our bold and exciting vision for this project, he says.

6 Fletcher Building CEO Mark Adamson says he is excited at the opportunity to again work with SKYCITY on another landmark building for New Zealand. This is an amazing building and a huge opportunity. Fletcher Construction has a long association with SKYCITY dating back to the Sky Tower 18 years ago, so I m honoured that SKYCITY has chosen us to be a key part of bringing this project to life. First look inside Auckland s newest hotel Kiwi design: Architects say the 300-room hotel s interior (above) will be uniquely New Zealand while the building s exterior (below) reflects the landscape it is grounded in. The architects and designers working on the NZICC have continued to refine the design of the building, to further anchor the building in its New Zealand context. They have released new images, including a first look inside the Hobson Street hotel. Andrew Barclay, Principal of Warren and Mahoney Architects and Design Director for the NZICC, says that as the Convention Centre is constructed, New Zealanders will see the building develop into a powerful expression of our country's identity. Every aspect of the design, from an open transparent and welcoming facade, to fluid public spaces and the use of natural materials, has been carefully chosen to reflect the essence of New Zealand. When it opens this building will be an authentic New Zealand experience and a built embodiment of Kiwi hospitality for which New Zealand is famed, he says.

7 Construction to begin by the end of 2015 Connected: The Hobson Street hotel will be connected to both SKYCITY and the International Convention Centre. The building s exterior is uniquely New Zealand. The agreement between SKYCITY and Fletcher Construction follows Auckland Council s ratification of the streamlined design of the NZICC agreed to with the Crown in May this year. SKYCITY now has all the resource consents in place it requires to begin construction. SKYCITY has agreed with the Crown to spend at least $430m constructing the NZICC, in return for a range of gaming concessions including the extension of its Auckland licence through until Mr Morrison says latest indications were the company would spend $471m on the NZICC, plus an additional $159m on the new hotel and $73m, most of which is on the new laneway, airbridge, retail fit out and additional carparking. The company was still considering options for financing the hotel. The NZICC will be the largest purpose-build convention centre in the country, capable of hosting conventions of around 3000 people, or one-off events of up to 4000 people on the exhibition floor. It will also be able to host multiple events at the same time. The NZICC s exhibition hall alone will be five times larger than the current largest exhibition hall in the country SKYCITY Convention Centre s New Zealand Room. A new laneway similar to Federal Street between the new hotel and the NZICC will also be created, providing quality food and beverage outlets and a new public space. The city s economic development agency, Auckland Tourism, Events and Economic Development (ATEED), which supports the development of an international convention centre for Auckland, has welcomed the announcement of Fletcher Construction.

8 Having an Auckland-based business confirmed as the infrastructure partner for the build of a project of this scale will generate new local jobs and money in Auckland s economy, says Chief Executive, Brett O Riley. In addition to the infrastructure opportunity the NZICC supports the growth of the business events industry for Auckland which aims to significantly grow the sector from $236 million of direct spend to Auckland in 2013 to $430 million by Auckland Convention Bureau, a division within ATEED, is already fielding interest in a venue suited to staging large scale conferences, he says. QUICK FACTS ENDS NZICC 32,000sqm GFA (Gross Floor Area) floor space Five times larger than the current largest convention facilities in New Zealand Capable of hosting conferences of around 3000 people and one-off events of around 4000 people 24 meeting rooms Building and façade designed with Kiwi identity 1327 car parks Adjacent laneway with exciting retail and food and beverage options 38-month build time Anticipated opening in 2019 Hobson Street hotel 300 rooms, 5-star Average room size sqm Contemporary architecture Linked to NZICC, laneway, and main SKYCITY complex * Based on SKYCITY estimates of positions in the NZICC, plus hotel operations, carparking, gaming, food and beverage facilities in the new laneway, and contracted and third-party services. ** National Construction Pipeline report no.3, July 2015 IMAGES AND VIDEO: Hi-res images and video for publication with this story are available on request. Video includes: Before and after comparison showing how the site will be transformed. Interview with Nigel Morrison, CEO SKYCITY Entertainment Group Interview with Mark Adamson, CEO Fletcher Building Fly-through video of the New Zealand International Convention Centre and hotel. Interview with Andrew Barclay, NZICC Design Director, Warren and Mahoney Architects For more information please contact: Kelly Armitage Group Communications Manager DDI: Mobile: Kelly.armitage@skycity.co.nz Ben Kay Investor Relations & Corporate Development Manager DDI: ben.kay@skycity.co.nz

9 Project Update: NZICC and Hobson St Hotel Investor Presentation 27 October 2015

10 Introduction SKYCITY and leading New Zealand construction contractor Fletcher Construction have announced a partnership to build the New Zealand International Convention Centre (NZICC) and the new 5-star, 300-room Hobson St hotel In a major milestone towards the landmark development becoming a reality, SKYCITY Chief Executive Nigel Morrison announced SKYCITY has agreed the terms of a binding, $477m contract with Fletcher Construction to build and complete the design of the NZICC, the hotel, the retail laneway linking Nelson and Hobson streets, and 1327 car parks under the NZICC The NZICC will be a landmark and iconic building for Auckland, enabling New Zealand to host major international conventions for around 3,000 delegates SKYCITY s total expenditure on the NZICC and Hobson St hotel projects will be ~$700m a significant investment in the future of Auckland and commitment to economic growth in New Zealand These projects will create an estimated 1,000 jobs during construction and around 1,140 jobs across conventions, hospitality, retail, gaming and food and beverage once the NZICC and hotel are operational 2

11 Key Project Highlights Fletcher Construction appointed as main contractor for the NZICC and Hobson St hotel projects following a competitive tender process Agreed commercial terms provide significant risk protection for SKYCITY Expect to commence construction of the NZICC by the end of 2015 and targeting completion of the NZICC and Hobson St hotel in Q Total project costs are consistent with previous market guidance Total capital expenditure of $635m over FY16 to FY20, including Hobson St hotel and activation of gaming concessions Expect to activate the gaming concessions under the NZICC Agreement over the next month SKYCITY remains confident that the NZICC and Hobson St hotel projects will be valueenhancing for shareholders 3

12 Main Contractor Fletcher Construction Fletcher Construction chosen as the main contractor appointed for both projects following a competitive tender process Fletcher Construction is New Zealand s leading building contractor Very experienced in managing large construction projects Previously developed SKYCITY Auckland site, the Sky Tower and the Grand Hotel Division of Fletcher Building, one of New Zealand s largest listed companies SKYCITY and Fletcher Construction have entered into a binding commitment letter which records the agreed commercial and legal terms of the building works contracts for the NZICC and Hobson St hotel Formal signing of the two building works contracts is expected to occur in November once a small number of outstanding matters have been satisfied, including finalising insurance and specific requirements under the NZICC Agreement with the NZ Government 4

13 Key Terms of Building Works Contracts Agreed commercial terms provide significant risk protection for SKYCITY Scope Design Timing Costs Insurance NZICC Building Works Contract NZICC, underground car park, laneway and hotel basement Based on developed design endorsed by NZ Government 38 month construction period from signing Financial incentives to complete on-time 90% of construction costs fixed or capped under GMP contract Remaining 10% represented by provisional sums within SKYCITY s control Cost savings shared between SKYCITY and Fletcher Construction Budget includes appropriate contingencies Comprehensive building works, public liability and professional indemnity cover Hotel Building Works Contract Hobson St hotel (excluding basement) Based on preliminary design Developed contemporaneously with NZICC Financial incentives to complete on-time 88% of construction costs fixed or capped under GMP contract Remaining 12% represented by provisional sums within SKYCITY s control Cost savings shared between SKYCITY and Fletcher Construction Budget includes appropriate contingencies Comprehensive building works, public liability and professional indemnity cover 5

14 Project Timetable Nov 2015 Sign NZICC and Hobson St hotel building works contracts Activate gaming concessions Dec 2015 Commence construction of NZICC H Commence construction of Hobson St hotel (above ground) Q Targeted completion of NZICC car parks Q Targeted completion of NZICC and Hobson St hotel Q Soft opening of NZICC and Hobson St hotel, followed by official opening 6

15 Total Project Costs Total project costs consistent with previous market guidance and include appropriate contingencies SKYCITY intends to complete the NZICC and Hobson St hotel within the project budget NZ$m Spent to Date Still to Spend Total NZICC Laneway, Additional Car Parks, Other Total (excluding Hobson St hotel) Hobson St hotel Total (including Hobson St hotel)

16 Future Capital Expenditure Profile Total capital expenditure of $635m over FY16 to FY20, including activation of gaming concessions NZ$m FY16 FY17 FY18 FY19 FY20 Total NZICC, Laneway, Additional Car Parks, Other Activation of Gaming Concessions Total (excl. Hobson St hotel) Hobson St hotel Total (incl. Hobson St hotel)

17 Project Funding SKYCITY is well placed to fund the NZICC and Hobson St hotel projects from future operating cash flows and additional debt funding Following the recent $125m NZ bond issue, SKYCITY now has over $300m of committed undrawn bank facilities sufficient headroom to fund the NZICC and Hobson St hotel projects As signalled in the FY15 results announcement, SKYCITY will provide an update on its long-term funding plan once the Adelaide expansion project is finalised Currently expect the Adelaide expansion project to cost around A$300m Expect to confirm details of the funding plan over the next 3-4 months As part of its long-term funding plan, SKYCITY continues to explore property-related funding options, including a potential sale of the Federal St car park and seeking external investors to fund and ultimately own the Hobson St hotel development JLL appointed to secure external investors for the Hobson St hotel Information Memorandum due to be released in November 9

18 Consents and Approvals Resource Consent Auckland Council recently approved the resource consent for the NZICC and Hobson St hotel Approved resource consent reflects the preliminary design for the NZICC agreed with the NZ Government in May 2015 No further resource consent approvals are required to develop the NZICC and Hobson St hotel NZ Government Approvals NZ Government has confirmed that the developed design for the NZICC remains materially consistent with the previously agreed preliminary design Minor outstanding matters under the NZICC Agreement will be addressed with the NZ Government during November No other approvals are required from the NZ Government to develop the NZICC 10

19 Activation of Gaming Concessions Gaming concessions under the NZICC Agreement will become effective upon the signing the NZICC building works contract 230 new EGMs, 240 new ATGs and 40 new tables TITO and cashless available on all gaming product $50 and $100 note acceptors available on 359 gaming machines in premium rooms Expansion of the permittable gaming area to include the Federal St footprint (including the Grand Hotel and existing Convention Centre) Extension of gaming venue licence to 2048 (from 2021) Gaming tax rate certainty for a minimum of 7 years $54m of additional capital expenditure allowed for activation of gaming concessions Partial infill of atrium to accommodate new gaming product Purchase of new gaming product Implementation of TITO, cashless and note acceptor systems New VIP gaming salons in the Grand Hotel Replacement of back-up generators for the NZICC and Auckland main site 11

20 Activation of Gaming Concessions SKYCITY expects to activate the gaming concessions under the NZICC Agreement over the next month Stage 1: By December 2015 Stage 2: By June 2016 TITO, cashless and note acceptors effective immediately 60% of new gaming product to be allocated to the existing gaming floor New Horizon suites and salons on level 7 of the Grand Hotel Conversion of Jade Dragon to accommodate additional ATG product Infill of part of the main atrium to expand the gaming floor podium Current Stage 1 Sub-Total Stage 2 Total Gaming machines 1, , ,877 ATGs 39* 0 39* Tables Ratio of machines & ATGs to tables Gaming product activation plan (as at October 2015) 15.0:1 15.0:1 15.0:1 *Currently included within definition of gaming machines 12

21 Key Design Features of NZICC 32,000 sqm of floor space available to cater for conferences of around 3,000 delegates Five times larger than the largest convention facilities in NZ (which SKYCITY currently operates) Capable of hosting conferences of around 3,000 people and one-off events of around 4,000 people Plenary theatre capacity of 2,850 largest theatre in NZ Capable of hosting two 1,200 delegate conventions contemporaneously 24 separate meeting rooms to support overall facility Additional ~1,327 car parks beneath the NZICC facility and integrated with the existing SKYCITY Auckland property Pedestrian laneway with exciting retail and food & beverage offerings Strong national identity designed to provide an authentic New Zealand experience and embody Kiwi hospitality 13

22 Key Design Features of Hobson St Hotel ~300 room, five-star hotel designed by Warren and Mahoney Architects and Moller Architects Building and façade designed to give the hotel a strong architectural identity Design envisages a lobby restaurant & bar, gymnasium and 24 hour valet car parking service Hotel porte cochère and entry plaza to interface with the NZICC and laneway Direct connection to the NZICC and SKYCITY Auckland main site by air bridges 14

23 Project Master Plan, Looking East SKYCITY Auckland Hobson St hotel NZICC Laneway 15

24 NZICC At Night, From Nelson St 16

25 NZICC Hobson St View (including laneway) 17

26 NZICC Laneway View From Nelson St 18

27 NZICC Cross-Section View 19

28 NZICC Entry Level Interior 20

29 NZICC Plenary Level Interior 21

30 Hobson St Hotel Hobson St View 22

31 Hobson St Hotel Connectivity to NZICC and SKYCITY Auckland 23

32 Hobson St Hotel Lobby 24

33 Hobson St Hotel Porte Cochère 25

34 Disclaimer All information included in this presentation is provided as at 27 October 2015 The presentation includes a number of forward-looking statements. Forward looking statements, by their nature, involve inherent risks and uncertainties. Many of those risks and uncertainties are matters which are beyond SKYCITY s control and could cause actual results to differ from those predicted. Variations could either be materially positive or materially negative This presentation has not taken into account any particular investors investment objectives or other circumstances. Investors are encouraged to make an independent assessment of SKYCITY For more information in connection with this presentation, please contact Ben Kay, Investor Relations & Corporate Development Manager Phone: ben.kay@skycity.co.nz 26

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