Hard grind at Reef
Reef Casino (ASX:RCT) has posted estimated distribution and guidance for 2018:
In the second half, hotel operations have continued to perform strongly. Casino operations have been lower because of strong local slots competition, a softer Chinese tourist market and lower spending by patrons generally. The recently completed Casino Refresh Project resulted in some disruptions however the casino now has a more competitive product.
RCT reports on a calendar financial year. The estimated profit of approximately $10 million is the lowest result since 2010. The second half result in particular is a concern:
- The commentary on China is consistent with flat ABS arrivals data despite direct flights to Cairns throughout the 2H period.
- The commentary on lower slots (pokies) is in contrast to booming numbers at pubs & clubs in Cairns including other venues in the City SA2. Should be an imminent update on that data for November.
All interesting in the context of a new casino proposal for the “global tourism hub”.
