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:

RCT 2H2018

  1. The commentary on China is consistent with flat ABS arrivals data despite direct flights to Cairns throughout the 2H period.
  2. 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”.

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