Wellington, Aug 17 NZPA - A solid rise in annual profit for casino operator Sky City Entertainment Group, which has significantly restructured to boost profitability, failed to impress shareholders who sent its shares down 3 percent to a one-month low.

Sky City reported a 12 percent rise in underlying net profit to $129.1 million for the June year, as the company paid down debt and reigned in costs in a subdued economy.

The trans-Tasman gaming company more than doubled revenue from overseas gamblers, particularly from China, and said general business would pick up as soon as the economy turned around. However, chief executive Nigel Morrison refrained from issuing guidance for the current financial year, saying he would update the market at the annual meeting in October.

"As they said ... 'you tell me when the economy's going to recover', and that's a fair answer," said David Price of brokers Forsyth Barr.

"You can control your costs, but you can't control your revenues. If they don't come to your door, what do you do?"

Net profit, before accounting for government tax changes, rose 22.9 percent to a record $141.7m, while bottom line net profit was down 11.5 percent to $102m.

Expenses fell 1.2 percent to $539.3m but revenue fell 1 percent to $837.9m, resulting in earnings before interest, tax, depreciation and amortisation (ebitda) down 0.8 percent to $298.2m.

Sky City aimed to be among companies offering the best returns to shareholders, and its final dividend represented an annualised yield of around 9 percent.

The final dividend of 9.25c per share, or 70 percent of net profit, takes the full year dividend to 17.25cps compared with 15.5cps the previous year.

Despite that, shares in Sky City closed down 10c at $2.89.

"I think Auckland disappointed slightly, and it's the biggest part of the business, and a lot of people have taken their steer from that," Mr Price said.

"A number of the other casinos are going very well, but it does centre around Auckland."

Auckland casino experienced a one-point decline in ebitda margin to 45.3 percent, while margins at Hamilton casino, in the heart of the booming dairy economy, rose more than two points to 43.8 percent.

Adelaide Casino's margins rose slightly to 21.4 percent, and Darwin's fell to 33.1 percent.

The Adelaide business had another record result, with ebitda up 7.1 percent to $A31.5m ($NZ40m), following recent casino improvements and growth in gaming and food and beverage revenues.

A late tourist season and smoking ban saw Darwin casino ebitda fall 3.8 percent to $A38.4m, while Auckland casino ebitda was down 5.2 percent to $193.8m.

Table revenues in New Zealand fell 6.6 percent from a year earlier, almost exclusively within the premium play segment. Offsetting that, international business rose to $14.5m from $6.4m.

Sky City was working with the Auckland City Council to improve Federal St, next to the Auckland casino, into a pedestrian-friendly entertainment precinct. Phase one would be finished in time for the Rugby World Cup.

It also had plans for a National Convention Centre in Auckland.