SkyCity Entertainment Limited, Annual Meeting 2025

10 October 2025

SkyCity Entertainment Limited (SKC)

The company will hold its Annual Shareholders Meeting at 10.00am Friday 31 October 2025.

The location is SkyCity Theatre, Level 3, SkyCity Auckland, corner of Wellesley and Hobson Streets, Auckland.

You can also join the meeting online at this link.

Company Overview

The company operates casinos in Auckland, Hamilton, Queenstown, and Adelaide. It also has an online casino and operates 4 hotels.

The New Zealand International Convention Centre (ICC) in Auckland is now expected to open in February 2026. This project has been subject to a major fire and various other setbacks. This was intended to be a 3-year project but has now taken almost 10 years. In June 2025, the company commenced legal action against Fletcher Construction seeking over $330 million in damages.

In 2024 the company settled legal actions on both sides of the Tasman. As regards the Adelaide casino, the company paid a penalty of A$67 million in relation to Anti-Money Laundering and Counter Terrorism Financing (ATL/CTF) breaches. In relation to the Auckland casino, the company paid a penalty of NZ$4.16 million for AML breaches, with the casino also agreeing to close for five days in September 2024 for a breach of host responsibility obligations.

We note the company has strengthened its risk practices over the last two years.

Current Strategy

The three-year strategy is to become a regional gaming leader delivering connected experiences for customers across entertainment venues and online, driving sustainable growth and strong shareholder returns.

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. There were many grumpy questions from the floor, including the role of the auditors in compliance, and the responsibilities of the board and senior management.
2. The judgments against Sky City in New Zealand and Australia have been financially expensive and damaged the company’s reputation.
3. Host responsibility is a focus for the company.

The meeting report is available at this link.

Disclaimer

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  Strong disclosure.

Director Share Ownership:  Directors are encouraged (but not compelled) to accumulate the equivalent of one year’s fees over their first two years and in subsequent years apply a further 15% of their base fee each year to additional shares.

As per SKC’s approach, NZSA encourages share ownership by independent directors. We do not support compulsion as this reduces the pool of available Directors, may compromise independence, and removes the ‘market signal’ associated with share purchases.

We note that the timeframe of two years to achieve the suggested target implies a 50% purchase rate.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. The People and Culture Committee are responsible for implementing the policy.

Incentives: The CEO is paid a short-term incentive (STI) comprising 75% in cash and 25% in restricted share rights held for one year, and a long-term incentive (LTI) by way of restricted share rights.

The CEO also received a “sign on” payment of $582,524 by way of shares. NZSA does not support such payments.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the new NZX Remuneration Reporting Template.

The STI is awarded at a target of 50% of base salary with a maximum of 55% of base salary. The measures, weightings, and level of achievement against each component are well-disclosed. No award was made for FY25.

Restricted share rights are awarded under the LTI at 40% of base salary. Vesting then occurs after a three-year performance assessment period. Measures include total shareholder return, a measure favoured by NZSA.

NZSA prefers a weighting towards the LTI to ensure the CEO is aligned with the interests of long-term shareholders.

The company discloses the gender pay gap but not the CEO/employee remuneration ratio.

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

We note the Annual Report includes the termination conditions of the CEO.

Director Independence:  All Directors are independent.

Board Composition:  Whilst there is a skills matrix, it does not attribute skill sets to individual Directors to demonstrate how they contribute to the governance of the company.

The company does not participate in the IoD’s Future Director (or similar) programme designed to develop and mentor the next generation of Directors. NZSA expect NZX50 companies to participate as part of a responsibility to develop and mentor the next generation of Directors.

The nature of the company’s board indicates a commitment to thought, experiential and social diversity.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

Over the last 4 years, the entire Board has been replaced, with appointment dates ranging from 2021 to 2023. NZSA expects that the current Board can provide some governance stability in the medium term. Although not an issue at present, at some point care will be needed to ensure an orderly rotation whilst retaining institutional knowledge.

ASM Format: SkyCity Entertainment Limited is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look for evidence that Boards are across their risk management responsibilities. 

Board members can access external independent advice with the prior approval of the Chair. The Company Secretary reports to the Board on all governance matters. The internal audit function reports to the Audit and Risk Committee.

Sky City offers comprehensive disclosure of the key strategic, climate, business, operational and financial risks that impact the business, as well as mitigations. There is also thorough disclosure of its risk management and governance processes. We note that the company now has a separate “Risk and Compliance Committee,” a position supported by NZSA in the context of the key risks applicable to Sky City and the recent actions by AUSTRAC and DIA.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence: Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. There is no disclosure as to the tenure of the current audit firm. NZSA also expects disclosure of the appointment dates of the Lead Audit Partner and Audit Firm in the Annual Report to improve transparency for investors.

Environmental Sustainability

Overall approach: In FY2025, SkyCity completed its second climate-related disclosure under the Aotearoa New Zealand Climate Standards, organised under the four pillars (governance, strategy, risk management, and metrics/targets). At the same time, SkyCity utilised adoption provisions, most notably deferring Scope 3 emissions reporting until FY2026. The company also reports that it did not meet its interim FY2025 emissions reduction target, highlighting the need for continued focus on implementation in future reporting cycles.

While the focus remains on climate, SkyCity demonstrates notable progress in broader environmental areas. The company’s Zero Waste Strategy has delivered a 51% reduction in landfill waste since 2015, including diversion of more than 190 tonnes of food waste for composting in FY25. SkyCity also continues to reduce single-use plastics and embed sustainable practices across its hospitality and hotel operations.

Sustainability Governance: Progress is evident in board-level oversight, with climate governance now included in the board skills matrix. Oversight of climate and wider ESG risks is delegated to the Risk & Compliance Committee, while the Audit Committee is responsible for reviewing and recommending disclosure. At the management level, an ESG Governance Group coordinates the identification and management of sustainability risks, supported by a dedicated Sustainability Team that manages data collection and reporting.

Strategy and Impact: The FY2025 Climate Statements note SkyCity’s adoption of Science-Based Targets (SBTi) and its decarbonisation strategy. While climate risk integration into capital allocation is still developing, SkyCity has begun asset decarbonisation reviews.

Risk and Opportunity: SkyCity discloses both physical and transition risks, as well as climate-related opportunities. Scenario analysis has been undertaken using the Aotearoa Circle tourism sector scenarios, helping to frame potential impacts. SkyCity has disclosed transition actions, interim targets, and resilience measures, and has indicated that its Transition Plan will be refined in FY26.

Metrics and Targets: The company discloses Scope 1 and 2 emissions, with comparative data and an SBTi-aligned pathway. The company reports progress towards a 38% reduction in Scope 1 and 2 emissions by 2030 (relative to a 2015 baseline). The FY25 disclosure clearly reports that the 2025 interim emissions target was missed, an open acknowledgement that strengthens credibility.

Assurance: SkyCity obtained limited assurance from PwC over its Scope 1 and 2 GHG emissions. NZSA encourages the company to extend assurance coverage to Scope 3 emissions.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations:  NZSA expects an explicit disclosure in the Annual Report around whether political donations are made.

Financial & Performance

Sky City’s share price fell from $1.50 to $0.71 (as of 8^th October 2025) over the last 12 months – a 53% decline. This compares unfavourably with the NZX 50 which rose 7% in the same period. The capitalisation of SKC is $540m placing it 39^th out of 115 companies on the NZX by size and makes it a large company.

¹ per share figures based off actual shares at balance date (not weighted average)

FY25 was a mixed year on the metrics. Post balance date, SKC have also completed a capital raise of $240m (at $0.70 per share) to help provide balance sheet resilience.

Operationally, 2025 was a difficult trading year. Total revenues fell 11% to $825m, and operating revenues fell 5% to $821m. However, EBITDA rose 56% to $216m after some line items (most notably NZICC fire related expenses) are no longer impacting expenses. NPAT was $29.2m, an improvement on last years loss, however 2024 was adversely impacted by a one off tax charge.

EPS of $0.04 were delivered and the company did not pay dividends in FY25. This is sensible considering both the level of earnings and the capital raise that is being undertaken. Operating Cashflows declined to $45.2m.

The company is, however, in a sound financial position (the equity raise notwithstanding) and has the ability to meet requirements when they fall due, a manageable debt-equity ratio of 1.07. Short term debt was paid off, but long-term and total interest-bearing debt levels rose to $666m ($609m). The company’s debt covenant ratios are likely to have influenced the decision to raise capital.

NTA per share rose slightly to $1.02 and SKC trade at a large 30% discount to NTA.

The company provided an investor presentation and on pages 20-21 provide some forward-looking guidance for FY26. Underlying EBITDA is expected to be between $190-$210m and no dividends are expected to be paid.

The share register is reasonably widely held with the top 20 holders owning 76.14% of the company.

Resolutions

Kate Hughes was appointed to the Board in September 2022. She is an experienced non-executive Director, holding board and committee roles across a diverse portfolio. Kate is currently on the Boards of the Australian Maritime Safety Authority, SuniTAFE and Lower Murray Water. She is also the Chair of ClinicTech and chairs the Audit and Risk Committees for the Victorian Department of Health and the Australian Prudential Regulation Authority. Prior to embarking on a governance career, Kate held executive roles in risk management, governance, and compliance across various sectors, including financial services, agribusiness, fast moving consumer goods, telecommunications, and tertiary education. Her private sector experience is complemented by regulatory experience at the Australian Securities and Investments Commission and NSW Treasury. Kate holds tertiary qualifications in commerce, applied finance and occupational health and safety, and is a graduate of the Australian Institute of Company Directors.

We will vote undirected proxies IN FAVOUR of this resolution.

Glenn Davis was appointed to the Board in September 2022. He has practised as a solicitor in corporate and risk throughout Australia for over 35 years with expertise and experience in the execution of large transactions, risk management and in corporate activity regulated by the Australian Corporations Act and ASX. Glenn has extensive board experience across the public, private, family and government sectors. Upon stepping down from the Board of Adrad Holdings Limited in September 2025, Glenn holds three directorships, allowing him to devote sufficient time to his role on the Board of SkyCity. As well as being a SkyCity director, Glenn is also currently a director of ASX-listed entities Elders Limited (as Chair from 1 November 2025), and iTech Minerals Limited (as Chair). He has broad board experience over many years in the manufacturing, resources, retail, property, seafood, and primary production industries. Glenn holds tertiary qualifications in law and economics and is a fellow of the Australian Institute of Company Directors

We will vote undirected proxies IN FAVOUR of this resolution.

This is an administrative resolution.

                         We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 10.00am Wednesday 29 October 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA