I would now like to hand the conference over to Mr. Michael Ahern, CEO.
Please go ahead.
Good morning, and welcome, everyone, to our first half 'twenty one results investor call. Great to be presenting my first result to you as Chief Executive and a real privilege to be the CEO of SkyCity. I was formally welcomed as CEO by Nati Fathou Araki with a portfolio and opened early in February, which is an incredibly special occasion for me and my family that have produced that in it as well. I've been the CEO Chair for a little over 2 months now. It's been pretty busy, but really enjoying the role and looking forward to interacting with the investment community over the coming days, both in New Zealand and overseas.
With me in the boardroom in Auckland today is Rob Hamilton, Chief Financial Officer and Ben Kaye, General Manager, Strategy and Investor Relations Board of who is more well known to you. This is Rob's 12th and final financial results delivered as Chief Financial Officer. He finishes off with us on Friday week. And Rob has been an outstanding Chief Financial Officer of Card City, and I'd like to acknowledge the skills, commitment that he brought to the world and wish him the very best for the future. Clearly, an immediate priority for me has been to implement the new management structure and bed down the team as well as, obviously, navigating the uncertainty arising from COVID.
And we're again struck with that this week. We shut our business in Oakland on Sunday evening, a really, really busy Valentine's evening with Chinese New Year activity in full swing. And we reopened it today midday and reopened at level 2 operating. It's open. It will be opening in just under an hour.
Moving on to COVID briefly, it's great to be able to have made a series of announcements regarding the management team. This morning, you will have seen our new CFO, Julie Amy, commences with us at the beginning of May. And Julie brings significant global experience in senior financial roles with the Shell Organization and with some other organizations as well. So Julie's in New Zealand are coming home and really, really excited to have her on the team. Also over the course of the past month or so, you will have seen a bit of down our operating structure within the business appointing Cal Ahmad as COO, New Zealand Matt Ballasti as Chief Casino Officer for the group and David Christian as the COO for our Australian business.
I'd also like to say, look, I'm pleased to see we will have continuity in the Investor Relations role with 10 ks and Ben is taking on some additional responsibility leading our strategy function and will be working closely with myself and Julie when she comes on board. Look, I'm really confident that we will be a great leadership group to take the business forward and looking forward to sometime, hopefully, in the year ahead, I also have an Investor Day in person, and you can meet the team in person. So I think while it's we're thinking of that planning, obviously, it's COVID independent and requires the order to be open and so on. Our first half 'twenty one presentation was released earlier this morning and as you all have it, it's a comprehensive document. I'm going to take the documents as read and then focus on the key highlights, themes and observations across the period and lead time for Q and A.
So then moving to Slide 7 through 9. Let me talk through the results. Look, as flagged, the group has been significantly impacted by COVID-nineteen disruptions and ongoing border closures. We've normalized and reported EBITDA down 22% 63%, respectively. However, despite the challenging environment, we're really pleased with the quality of the results overall, which was above expectations at the start of the financial year.
To put the operation challenges in a little bit of context, we experienced 19 days of being closed in Auckland during the period, over a month of Alert Level 2 in New Zealand and a full 6 months of significant operating restrictions in Adelaide, including a 4 day period in late November of being closed. The thing has got used to managing this uncertainty, again, as proven in the last couple of days, and certainly demonstrated resilience and commitment. And we have a comprehensive COVID management plan that deals with moving between 3 and 2 and 1 in the various levels, both in Brazil and in Australia. Our tourism businesses, in particular, in Auckland have been significantly impacted by the COVID-nineteen disruption and international border surges, which we do expect to continue for the foreseeable future. And then a little bit of context around that.
The profitability of the hotel business at the New Zealand is effectively half of what it was in half one twenty. And food and beverage is effectively a breakeven result at a contribution level in Orkut. And obviously, attractions like Sky Tower have been materially impacted. IV continues to trade at a modest loss, but this has been reduced versus our expectations early in the year due to cost savings and some interstate cables activity that we've seen post opening of the expansion in Abilex. We've recently commenced a review of IB to consider key operational regulatory financial settings for the future and considering the recommendations from New South Wales Casino inquiring into Crown Resorts as part of this review.
As to add at the UBS Investor Conference in November, it's pleasing our domestic gaming business, which is the key value driver in the group, has continued to be resilient and performed well when open, particularly EGS. And we've also seen the operating model bed down and deliver good cost execution. We continue to see good levels of play from local premium customers consistent with the trends in second half 'twenty. Certainly, the investments we've made in the VIP facility in Auckland helps us there. And we're benefiting from new products in Auckland and Hamilton as well and certainly a stronger consumer domestic consumer environment than we would have expected earlier in the year.
Hamilton and Queensland, in particular, delivered strong results underpinned by EGM activity and cost savings with EBITDA growth of 22% 50% in the half. Auckland EGM performance at around 95% of the PTP on a like for like basis was a hot out of our key property, demonstrating the stable and resilient features of this business, with table games activity improving month on month as restrictions ease. The cost base has been pretty well managed, pretty happy with that following the operating model changes that we made last year. We have seen good momentum in the business. Prior to this, the soldier we just had in Oakland.
And I'll refer you to Slide 10 in the slide 10 in the deck. We present the performance across our 3 properties for the period July to October 2020, which is the same as when we presented at the UBS Conference in November. And then have been updated to include the black bars on the chart, which is November 13 February 2021 on a like for like basis. And what you can see is that performance has progressively improved across each category and each property over the period. Local gaming activity for the period November to February across the business was in line or above the TTP, which is pleasing.
And we've seen broad based improvements in performance in Adelaide, both opening up the new expansion, which I'll talk to later in the call. I wanted to get you to refer to Slide 17, 18 in terms of group strategy and my own priorities as CEO. What I've presented here is really a high level view on how I'm thinking about strategy for the business and then on the Investor Day that we're going to plan when we can, we'll be able to get into the detail of this. And what I would say is that we have privileged assets. Monopolies are in currently strong positions to buy quality regulated gaming jurisdictions, which allows us to have long term strategic planning.
And what I would describe the strategy is not materially different to that what I've inherited, but I've increased the emphasis on optimizing our core business, which now doesn't do online gaming, online casino gaming and lifting returns on cash flows, return on capital. The strategic plan focuses on 3 core pillars, which are on Beaver Works. So firstly, operational excellence at our core, and that is running the businesses that we have today, focusing on continuous improvement in operational performance and investments to support that. Local gaming is a key driver of the group. It has always been and it will be in the future.
So focusing on maximizing the value of those exclusive licenses that we have. Important to navigate through uncertainty of COVID, and I don't underestimate this, both the challenge and the scale and the timing of this. And the real opportunity and the real focus is to return our business to FY 'nineteen earnings and fully operational and then with aspiration to grow well beyond that over the medium term. We will be investing in improving our marketing and more of the execution through technology as well. And I think any capital development, certainly in the short to medium, will be focused on the existing assets and particularly on our core gaming proposition.
The second pillar in terms of completing our major projects and optimizing an asset portfolio, obviously critical to complete the major investments that we have and great to see that Adelaide has opened is running to monitoring complete, but the project itself is large and complete. And now it's about execution there. And obviously, in that ITC and Verizon Hotel, getting those complete within the budget that we've outlined, that's a major strategic priority for us. And then the third pillar, pursuing the omnichannel opportunity. We do have a unique opportunity to monetize omnichannel and consolidate our leadership position in the gaming industry, particularly in New Zealand.
It has quickly become a meaningful part of our business, which you'll see in our results, and it offers an exciting long term opportunity. And it's important to start timing today for the potential integration of Landbase and our online businesses. Underpinning all of that, it's really important that our culture of our organization is right and focused in the right areas, and I'd call out continue to focus on our social license, responsible gaming, AML, community. We are part of the community and everywhere we operate. That's really important.
We engage in the right way and we integrate in the right way and sustainability. So you'll see more about those as we move forward. Then as I mentioned earlier, taking role here, we're working on developing a strategic framework to ensure we've got discipline and accountability about both the development and the execution of our strategic plan. Now turning to our major projects, I'd like you to refer to Slide 2022. Really pleased to say that Adelaide expansion has completed on time and on budget.
And performance prior to expansion reopening by coal wood and construction disruption was what I would describe as stable. And on a like for like basis, domestic gaming was pretty similar to the previous period. Our new product is certainly a world class product, and the response from customers so far has been really strong, great feedback. And what I'd say to everybody on the call, all of the Aussies, make sure you take a weekend out and go on business and put plenty of money in your pocket and have a great time at our property. We significantly expanded our gaming and entertainment facilities.
And I've just outlined on Slide 23, just a little bit of detail now on what the final product looks like right now and where we'll end up as we finalize some new areas to open. It's been a positive performance post opening. We've outlined that in Slide 2024, but I will caution it is early days yet, but it's really encouraging across all parts of the business with total gaming revenue up 33% versus the PPP period. The new hotel and food and beverage facilities have been incredibly well received by customers. And the local team in Adelaide has done a tremendous job opening the property.
And that was a pretty challenging time to open that business. We've also seen good cost to keep execution in the initial period. That's been a real focus of the team. So and benefiting also from the lower effective tax rate due to a higher mix of premium gaming activity with the new VIP facilities that we have there. There's also some several positive catalysts ahead.
We expect to take the possession of 750 car park spaces from the start of FY 'twenty 2. And obviously, orders opening more meaningfully, we expect to be able to address the interstate and international markets over time. I'd also say based on the performance post opening, we remain comfortable with the medium to early with the targets of the property that we've previously outlined. Only a small amount of CapEx now remaining that's to be said there and looking forward to seeing strong cash conversion on the property going forward. On Envid ITC, go Horizon Hotel.
The reinstatement is progressing post the fire, but slower than anticipated. The date that we expect completion of the hotel first half twenty twenty two and then that ICC completion by the end of 2023. We remain comfortable with our contractual division with Fredrick, and we've recently settled some pre fire claims with Fredrick to appear to pass to work collaboratively towards completion. No change to expected total project cost of around 750,000,000 dollars of which we've got about 20% left to spend excluding the costs the remaining costs from the fire, which are expected to be funded by insurance. Just some color on online gaming, and it's an exciting feature of our results in the half where that business is now delivering a reasonable return even from an EBITDA point of view.
So fantastic to see a business which is a startup really actually cash flow positive in a really short amount of time and contributing about $5,000,000 EBITDA to the in the half year. We now have about 30,000 hectares, and that continues to grow. Look, we're continuing to optimize the site with Gig. The product and the experience customers getting on our online and through mobile has improved significantly over the past 12 months or 6 months as well. And despite the operational constraints that we put on the business in terms particularly in relation to marketing, we've seen a significant increase in revenue and EBITDA that I mentioned.
Trading is pretty consistent month on month, following a significant increase in customer registrations and first time deposits from March 2020, around the time of the first lockdown. We remain, obviously, very supportive of regulation in New Zealand. The DIA policy review into online gaming is continuing, and we expect to hear updates from the DIA continue over the next few months. But globally, online gaming, whether it's sports betting or online casino gaming is a global theme and it looks at the U. S.
And the opening up that's happened there. And probably worth also highlighting online gaming companies are consistently trading at significantly higher premiums in a land based casino, assuming the structural global outlook. So again, look, really excited about this part of our optimism as we look forward. On the capital management point of view, and I think you referred to back to Slide 15. Now that Ben can take questions later on, but I'm happy to make some high level observations.
But the balance sheet is in a much better position today than we expected at the time we raised equity in mid to 2020. And funding finance risk is effectively taken off to pay those for shareholders. We very much have sufficient liquidity, around $465,000,000 as of December 2020 to respond to further COVID-nineteen disruptions or more protracted economic recovery in New Zealand, Australia. Our major projects are fully funded and focused on execution. And balance sheet capacity can be reviewed when we're no longer in reliance on covenant waivers relief and domestic and international bond that becomes more certain.
We expect to consolidate the financial covenants at 30 June. Testing period assuming that no prolonged property closures. And in relation to final dividend, we're obviously not paying a dividend at the half year. We expect to pay a final dividend in the year in September or October. That does it to no prolonged property exposures.
And we do appreciate the support to shareholders who have understood the need for us to preserve capital during this period. A review of the dividend policy has been undertaken by the Board the half and a preference for greater flexibility than what existed under the previous policy has come out of that review. We're targeting a payout ratio of between 60% to 90% of normalized profit per annum as we look forward and intend to progressively increase dividends over time as earnings grow. In terms of outlook, the business has been performing better than expected prior to the current closure in Auckland. And at this point, we are we're not changing our previous guidance for FY 2021.
The outlook does remain uncertain and is subject to change. That is the reality. And I think the last couple of days have just reemphasized that. We intend to provide more detailed guidance when we get more certainty. So potentially, there's an inquiry, many conference maybe the opportunity to do that.
What I would say is that our local gaming business continues to perform well when open, particularly in GMs, and we've seen that consistently and we've seen that in the presentation here. And our tourism related businesses continue to be significantly impacted by operational restrictions and international border closures. And we also expect that to continue until we see a change in international borders, which we do expect to be remain closed for the foreseeable future. So I'm going to pause there and open to questions.
Thank you. Your first question comes from Chelsea Leadbetter from Forsyth Bar. Please go ahead.
Thanks. Good morning, Michael and team. I guess just coming back to Adelaide and appreciate the color you've given us in terms of how things have started. But just trying to understand a little bit about how to think about the profile from here and I appreciate we're on uncertain backdrop, etcetera. But do you think there's been a boost from the sort of opening kick start effect that we start to see it feel back before you can have, I guess, a better exposure to tourists and whatever else down the track?
Or do you think the level that you started at is just sort of keep chipping away and keep continuing to hopefully take some market share from?
Yes. Look, Chelsea, I would say the first thing I'd say is what you're seeing there is domestic activity. It's largely South Australian activity across the property that we're seeing in that initial trading period. And we will as you know, sorry, as Australians become more travel more and we market more, we expect to see more domestic activity. It's it is early days.
We're monitoring it on a daily, weekly basis. I would say over that period, the activity has been pretty consistent. So it's been pretty consistent with the growth that we've seen across the period through December in January. But it is early days. The game and the EGM performance looks pretty good.
And our local VIP gain performance has been pretty good. There's plenty of upside in the hotel. There's plenty of we see similar trends that we see not only in Oakland but any of the other properties we see. We came that are really busy. So the additional capacity we have, we certainly see the benefits of that Friday, Saturday, Sunday.
And then off peak, a little bit faster. That's similar to all of these type of properties. So, Raza, anything else you want to add? No, that's covered. That's well, Michael.
Just to emphasize, we're obviously very pleased with how Adelaide has started. The team has done a great job there to have the property open. It's great to see the additional visitation coming through, which is really highlighted through in terms of the gaming and non gaming performance. As Michael said, really guys, but it has given us the confidence to reaffirm the longer term guidance which we previously put out on the NOI property.
Okay. I appreciate that. And maybe sitting back at the group level, if you think back maybe 6, 12 months ago, you're obviously quite a pressure period in terms of taking costs out, etcetera, in the business and clearly performing better than you thought back in the depths of lockdowns, etcetera. Have you put back a portion of those costs now? Or should we be expecting you to be putting more in the next 6 months ahead?
Yes. Look, some costs have come back into the business as you'd expect as the activity recovers. But not what we took out. I think our operating model does see less marketing activity going on marketing costs, and I think what we see is that's pretty sustainable. We have hired more people in gaming, for example.
So we've got 150 more heads than we had at our lowest point. But so we're being pretty cautious in our approach there. So we don't envisage that we're going to add back all the costs that we've taken out. It certainly is not that I think it's.
Okay. So it sounds like you're still comfortable that you should be able to retain some of the margin benefits over time in terms of operating efficiencies and various things that you've been out to gain altogether so far?
Yes. We think that is sustainable. It's difficult now because you don't have a clean period. You always have periods that you're short at your level 2. So it's actually very difficult to see a clean margin.
But what we see is when we do have a period of normality, we are seeing an underlying higher margin in each business unit, even at a normal operating environment.
Okay. And just last question on Hamilton. Clearly, it continues to hit it out of the park in terms of performance. Just interested in how you think about the sustainability of where you're sitting at the minute, particularly with things like win rates and EGMs in that business?
Yes. Look, obviously, we've seen sort of forms of Amazon. I'll put it down to a couple of things. The significant changes we've made in the business there, that property, walking here today versus a year ago, it feels like we could see that the product is substantially better. So there's some structural changes we've made in layouts and product and pricing that definitely is sustainable.
And then the other is the economy there is very buoyant and the outlook there is really positive as well. So our view is what we're seeing there is a sustainable level of earnings for that business on an ongoing basis. It's not that there's a one off customer win included in that number. That's not the case. Chelsea, I'll just add one small notion of caution.
Obviously, once national borders do open up, you expect to see a few people from the Waikato want to get across to Australia and overseas. So we've been fortunate to have a captive domestic market in the Waikato over the last or during the reporting period. So just a note of caution once once orders still open up, which may impact FY 'twenty two slightly, but I don't think it's even near sufficient to reverse the benefits that might also sell out.
Okay. No, I appreciate the color. Thanks. Thanks for your time.
Thank you. Your next question comes from Desmond Tsao Pfau from Goldman Sachs. Please go ahead.
Good morning, gents. Thanks for taking my questions. I just had a couple of quick ones. Firstly, just on Slide 10, I appreciate if you could perhaps give some color just around, I guess, the performance into the second half. So from January to mid February, if you're able to sort of shed a bit more color on that, that would be great.
Look, what I would say is that it was pretty consistent. We I would say, all you see there is a progression over time in performance. The black bar pre October October November. So that's all continued as and at that level once. So and I think, say, we've seen progress.
Customers get more confident gradually over time to see businesses recover. Cable game is probably the interesting one. That's one that was going slow for quite some time, and we've seen that recover as well. So I think you'd see a progressive ongoing improvement on how you describe it. Just being Kate here, a comment that I would make looking at the analyzed period.
If I can say on Auckland, July December were 2 months that we look at where we're at level 1 trading without restrictions and walking at a property level delivered around $20,000,000 of EBITDA, which is broadly comparable to what we're doing pre COVID. And January was pretty similar to Zendebo, wasn't it Michael at Auckland. But looking at the analysis more broadly, the trends have been pretty consistent across each category, across each property, which is it's been pleasing.
I appreciate the additional color. And then just secondly, I guess, just around the full year guidance. You've reiterated the guidance that you gave out a few months ago. I think it's still framed around 2021 normalized EBITDA to be above 20, but well below 2019 levels. That's despite the, I guess, better than expected first half twenty twenty one performance.
Just interested in the degree of conservatism baked in just potentially around further closures, etcetera, to play out over the next 4, 4 and a bit months?
So what I'd say is that it's uncertainty. We just don't know how we're operating it. Are we shut at level 3? Are we at level 2? Or are we at level 1?
And that has a major impact on earnings. So you'll see that I'll refer back to the November shutdown, 19 days in Oakland cost of $20,000,000 on EBITDA. Level 2 operation is half of what level 1 is. So in that environment, it's very difficult to give the put an exact defined number on it. Yes.
TS, we've been deliberately cautious given that uncertainty. If we sailed through the past week at level 1, we were looking potentially at providing guidance, slightly narrow guidance range than the broader guidance that we've given. But the last week has just shown how things can change on a dime. And right now, our properties are actually still shut for the next 25 minutes. And we're not sure how our property will open and we're not sure how we're going to respond in level 2, how long level 2 will be.
So I think what we'd like to be able to do is when we get to the we normally provide an update in early May around the time of the Macquarie conference. So our intention would be to do just that.
Got it. I appreciate that. Thanks, guys.
Thank you. Your next question comes from David Fabrice from Macquarie. Please go ahead.
Good morning, all. Look, I know a cost question was asked earlier, but have you got thoughts as to whether you can structurally expand margins across the assets when revenues fully recover?
I mean,
is there an opportunity to reduce fixed costs through headcount reductions or other initiatives?
I think there is, David, in terms of margins. And if you take a look at the Hamilton result, for example, the Hamilton result is obviously 18 dominated by AGM performance. And but once you make it since the way I look at the Hamilton result, good EGM, really good EGM performance, good tables performance, weaker non gaming performance and margins are up significantly. So a combination of stronger gaming performance, which is obviously our high margin part of the business, but also some meaningful cost savings still being implemented and have been beaten down in that business. So as Michael indicated earlier, we're not looking to add cost back in where we don't need to.
So the handle of the business is I think a good example of what we're achieving in all parts of our business. Auckland, it's a little bit more opaque given the mix of activities and also the significantly weaker non gaming performance during the half. Food and beverage, I think as we've highlighted, it's been relatively weak and hotels the same and they are they have a significant adverse impact on the overall margin for the property. But once you if you have a look at gaming, margins there are equivalent to what we've achieved, if not slightly up on what we've done in prior periods. And if we're back to a normal revenue level of activity in Auckland, then we expect to see with a similar mix of business, we'd expect to see margins slightly up.
And that would be sustainable going forward.
Great. Thanks for the color there. Another question, just sorry, thinking about If I
could add something, in regard to Adelaide, specifically, look, we have signaled that we would expect margin improvement at that property cost expansion, particularly when you think that the growth that we're anticipating at that property is going to be in a higher margin part of that business. That's what we've seen so far for the property since we've been open in December January. So hopefully we're going to see that flowing through as we report on a subsequent period. So that property is historically done, it's safe to think to think EBITDA margin level with expense improvement as the property ramps up, that post opening of the facilities.
Great. Thanks for that. And just thinking about this strategic review on IB, are you thinking that New Zealand may look to ban junket play in time? And what's been the historical skew to junkets when we think about maybe the FY 2019 volume?
Look, we haven't had any communications from the DIA around junkets as obviously it's been a major focus in New South Wales of recent times. The key issue for IP is international borders are closed and the way the business can operate going forward is clearly changing as a result of the Crown inquiry. So what we're wanting to do is essentially trying to hit some of those changes and make sure the business can operate sustainably going forward. Our business in the international side has always been operating much more conservatively and much less reliance on junkets than some of our peers. If we look back at FY 2019, which is sort of the best comparable period, then around 15% of our turnover was driven by the corporate junkets.
Got you. And one last question for me. Just thinking about Adelaide, have you got any observations as to whether local market operators have shifted to note acceptors in TETO? Like, are you getting a benefit because you're ahead of the reform changes? Or is the market still fairly competitive?
Yes. Look, we're definitely ahead of others in terms of timing because we're fully no receptors and no doubt in our number. I don't know if it's a particular competitive advantage. I think it's going to lift the market. My view is no receptors will actually create a larger market and we've benefited from that side.
I don't think that the fact that we're ahead in itself, I don't think that's particularly been efficient to us. It's good to be ahead, and it was certainly seen it's positive in terms of EGM performance. But I expect any of the certificate operators will quickly catch up.
Your next question comes from Marcus Curley from UBS.
Good morning, guys. Just 2 for me. On Adelaide, obviously, you've given some details. And I just wondered whether you'd be willing to give us some hard numbers around the revenue and EBITDA of the casino since it's opened. The comparative numbers you've given, one would assume, are impacted by last year's COVID issue.
So is it possible to sort of just annualize what you're seeing to give us a ballpark sort of illustration on what's happening?
So I think it's difficult to actually put numbers on this call. Look, what I would say is that we've given revenue. We've also said cost have been managed reasonably well, and it is flowing through the EBITDA. But I wouldn't be comfortable actually putting an actual number for December and January out there at this point. Mark, this is Joe.
We're not in the habit of giving out monthly results. And I know it would be wonderful if we did, but we're not about to start. What I would say is the results last year weren't really impacted by COVID. So the comparable period that was shown on Page 24, 1 December through 13th Feb isn't really impacted by COVID at all. And these numbers obviously don't include IB.
So if there was going to be a COVID impact on that, it would be IB sort of going into Chinese New Year and the 1st couple of weeks of February last year.
Okay. And then secondly, do you think the right working assumption for us going forward with international VIP is that you won't be involved in junket play?
We haven't made any decisions on that. And given the international borders are closed, we've got a little bit of time to flicker that out. So we obviously haven't had any interaction with the Macanese junkets for some months now, effectively 12 months.
Okay. And so when do you think you'll come to that decision? Is that something you'll announce in the near term? Or do you think it will you'll take some time on
that? I'll have a little review underway. And we have some time because international borders are in the open meeting. But I'd say in this in the 6 month period, we'll have landed where our position where the is going forward. And just to reiterate, Marcus, our reliance on the Macanese junkets is a lot smaller than our competitors.
And the bulk of our business for some time now has been essentially individual customers or individual customers playing through very small group operators, especially the domestic group operators as opposed to the MacAfee's junkets. So we believe there is a meaningful sustainable international business for Scottsdale going forward.
Sure. But I suppose the issues that Crown have run into with those junket operators would equally apply to yourselves? Or do you think you could manage those junk operators in a more appropriate way?
I'll just read at Rob's comments. The international business is in its entirety. We believe that there can be an international business in the future. We've never been wild on the kind of jumping operators. We don't have to get into the crown issues markets.
We've operated our business quite differently since its inception and don't think the same issues automatically apply viscosity.
And sorry, Rob, the line is not particularly clear. But did you say that in FY 2019, 55.0 percent of the business was on corporate
junk. Just referring to Page 46 in the presentation, which I know is the basis of the appendices, but there's a comment there about the proportion of FY 'nineteen turnover that was represented by the Mekides groups. And that's been pretty consistent, Rob, has it been over several years? Yes.
Thank you.
That was most probably a peak in FY 2019 in terms of that percentage.
Thank you. Your next question comes from Sasha Kine from Evans and Partners. Please go ahead.
Hi, good morning. So useful extra color on Auckland EBITDA in December. Just
wondering if you
could perhaps give us an EBITDA number for the December quarter when I think your restrictions were less than the September quarter across the business?
Sorry, Sachin. Not in the habit of putting out quarterly EBITDA numbers. So I'm able to answer that one for you on this call.
Okay. No problem. Just on your comments around some cost potentially coming back into the business. So I think it was Q4 'twenty you did the labor restructuring. You talked about $40,000,000 of annualized OpEx savings.
Can you just remind us how many heads came out of the business at that time? And I missed before when you said how many you've added back. And maybe just a comment on how whether or not that's a permanent annualized cost saving, that $40,000,000 that you've previously talked to?
Yes. So the restructuring of retail at the time had about 900,000,000,000, I think 850,000,000 or so was the following number that individuals have made redundant. We brought that paper on time as business as we cover. I mentioned there are 100 and 50,000,000 probably a little bit more now have come back into the business. We're hiring far more part timers and casuals rather than full timers.
I think the additional full timer is a number of circa 20,000,000 of that 150,000,000. So it's actually a very small portion. The full $40,000,000 is some of that will come back into the business as we grow. If you think the food and beverage and hotel business, these are highly labor intensive. So some of that will come back over time.
So however, when our business gets back to FY 2019 sort of levels, if you have a structurally different look in terms of margin. So we're not giving exact guidance on what that number looks like, but are indicative of what we're seeing. I would say we are not sure what the outlook is in terms of when businesses will recover, But what we're doing is taking a cautious approach to labor management, both in the front of house business, but also in the corporate areas as well.
Okay. Sure. That's helpful. And then can you just remind us what your long term Adelaide guidance is? I think you guys mentioned it just before.
Look, we've said $60,000,000 EBITDA and that includes liabilities where in the next couple of years outside of COVID, we're clear on COVID. And then Target for the property.
Got it. And then just last question on Adelaide I mean or last question overall, how soon do you expect to get up to 1500 slots in Adelaide? Is that sort of do you think you need to have all 1500 entitlements out there to hit that 60 mill target?
No. Look, we definitely don't need to deliver the 60,000,000 target. The unit numbers we have outlined there are the unit numbers we would need to get there. I think it's a nice option to have that we could expand in future. But if you look at the wind per unit, if you go to any property in Australia or even their own properties here in Hamilton and so on, the wind per unit is very low there.
So it's about a lot of you is about the location and the what we've got in premium rooms and VIP. That's certainly helpful. But it's a nice option in the future to be able to grow. Yes. Sachin, maybe I have a comment on how it might be.
All we're trying to settle there is there is some capacity, right, under the entitlements that we have. And we have created space within the facility that can be converted from non gaming to gaming. The function space is an obvious element of significant function space there, which reflecting future demand, we might retrofit that space for Gator, which would take out our product beyond what we've guided to in the document. So it is an option I guess an option on the future is the way I described it.
Okay. Thank you.
Thank you. Your next question comes from Adrian Obon from Jarden. Please go ahead.
Good afternoon, team. First question, can I just circle back to Slide 45, which I don't know if there's been a lot of questions on Adelaide? But just when I look at the slide, would it be more normal for us to think about the EBITDA contribution, which has been incredibly strong, like more like a full year kind of contribution in earlier years, like without the JobKeeper stand? Because to Rob's earlier point, like first half twenty wasn't really COVID impacted and those sort of key operating revenues are not significantly down. And if that if those assertions are sort of more correct, like is that also sort of driving a little bit into sort of the cautiousness around the full year guidance?
Yes. I think the one way to think about Adelaide's performance in the first half, Adrian, and I think we've highlighted the impact of JobKeeper on that slide on the Adelaide business. If you take that out, then Adelaide was performing reasonably well under the circumstances July through November. It was pretty close to PCP during that period despite the disruption constraints, despite the COVID constraints that the property was still under. Obviously, we've got the benefit of December post the expansion opening, which was a much better month as highlighted in some of the earlier slides.
So overall for the half, Adelaide was pretty much in line and an EBITDA level with what it has done in the prior period. Clearly, we have our expectations for Adelaide in the second half much higher than what we did in the prior period. So I'm not sure whether that's an answer to your question, but that's roughly how we're thinking about the performance in the first
half. Well, maybe I know it's like it's a difficult question to ask in the sense of like what is normal, but like just in terms of how we would think about our modeling into the full year, I guess, for the second half, would you be expecting like an Adelaide second half performance like above this normalized EBITDA that you just reported for the first half, which obviously includes JobKeeper?
The JobKeeper number does distort the first half. So I don't think we expect to be below that first half number for the second half in Adelaide.
Okay.
So, we'd expect to be clearly above what we did in the first half.
Is there any job keeper that flows into the second half?
No. Okay. Just
second question around just like obviously you hit the review of the dividend policy and you've given some plot key guidelines. Just in terms of the like and again this is catered on lockdowns and all that sort of stuff, but how you would implement that for FY 2021 when obviously you've had the restrictions on the first half? But would you be looking at like paying a potentially paying a proportion of the full year profit, not just the second half proportion?
So the rough way we're thinking about it is take the full year, apply the policy and then have it to give a split between interim and a normal interim and a normal final dividend.
But in the case of implementing that, assuming no lockdown? I guess what I'm saying is, what the lockdown?
Yes, any lockdownality influence of the underlying impact and EPS number as to which the policy will be applied? I think it will have to be a fairly prolonged lockdown for us not to make the financial covenants for covenants for 30 June that we feel in the rough year and it's been a position to pay a dividend. So we're comfortable with those things that have been around covenant compliance, specifically for the June test.
Yes. It looks like my apologies, maybe I've asked the question, Paulie. Like would you like when you come to planning on the dividend after your year end performance, which I presume would be at
the August result, But if
it performed in line with the expectations, it wasn't onerous restrictions on lockdowns and stuff through that period. But would you potentially look at paying a catch up dividend for the fact that you couldn't pay it in the first half?
No, that's not how we're thinking about it, Adrian. What we want to do is essentially establish a sustainable interim and final dividend pattern and consistent with the new policy outlined. So I don't think our performance in the first half justifies a catch up dividend by some of the retailers might have done in New Zealand and Australia in recent times.
Okay, understood. We're after coming
to the end of our allotted time. So I might just thank everybody for their participation on the call today and look forward to having further discussions with you in the 1 sessions that we're having over the next couple of days when we get ahead. Thank you all. Thanks all.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.