Reef Spins Result
Something is spinning at Reef Casino but I’m not sure it’s either the roulette wheel or the pokies. The poor half year result announced today has been well flagged at the previous distribution announcement and AGM.
Trading and operating conditions
The Chinese New Year season was soft for Cairns as a whole
Our complex faced strong local electronic gaming competition
Tourism into Cairns was generally softer
Premium gaming was subdued with less than hoped for volume because of the arrests of marketing staff in China from another Australian casino operator which had a consequential impact on our own premium market.
The issue of the Crown Casino arrests in China a while ago now and premium gaming is a bit curious. Reef really doesn’t play in the genuine high roller market which they have previously acknowledged with lower bet limits to manage risk. Reef is the only listed casino operator which doesn’t provide ‘normalised’ results to adjust for variation from theoretical premium win rates. The reason given in a previous query is that it isn’t material.
Pokie numbers in Cairns Regional Council have increased over the last few years from 1,641 back in 2014 up to 1,809 in July this year. That is down from a 2016 peak presumably related to the Courthouse Hotel closure. Applications for expansion of hours have also been noted at suburban venues.
However a more interesting announcement from Reef today could be this:
Reef Corporate Services Limited ABN 66 057 599 621, in its capacity as responsible entity of the Reef Casino Trust ARSN 093 156 293 (RCT), has been advised that Casinos Austria AG (CASAG), a major RCT unitholder, has commenced a strategic review process which could result in the potential sale of its international casino portfolio including its interests in RCT (Process). RCT understands that the Process is currently at a preliminary stage. RCT will keep unitholders informed, based on information it receives. In the meantime, it’s business as usual for RCT.
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