Reef Casino AGM was today and provided an update on current trading:
Our current estimate of the distributable profit* for the first half year from 1 January 2018 to 30 June 2018 is approximately $4.8 million.
So far in the first 4 months of this year, total rental paid by the Reef Hotel Casino to the Trust is up by 19% compared to the same period last year. This partly reflects a degree of short term trading variability in the casino industry and a relatively soft start to last year.
Key factors include an improved Chinese New Year high tourist season, strong performance in table games premium play and strong performance by hotel room operations. We continue to take on the local competition in electronic gaming machine operations and our food and beverage operations continue to strongly support the overall performance of the complex.
That would sound impressive except that ex the rebound from last years slump it would be the lowest 1H result since 2012. It isn’t a stellar result.
Attending this AGM is always entertaining with questions from the floor winner this year dress standards and the appropriateness of Jackie Howe singlets and thongs in the context of gender discrimination. They probably got lost looking for Tradies Bar.
Anyway independent director Keith DeLacy managed a re-election speech this time without having to point to his head for clarification when he said independence was a state of his mind. There was also a rather curious joking comment from doddering Chairman Ben on inadequate takeover proposals. CEO Alan Tan also suggested Commonwealth Games benefits had been overhyped. There seems to be an increased focus on premium play including in capex plans.
Questions at the AGM itself are usually unproductive much better to retire and discuss over coffee. Alan Tan wasn’t really as forthcoming as I would have liked on the EGM pokie competition and expanded hotel hours which is very clearly an issue with this business. We did however agree that capital flight may be an appropriate term for the current hotel investments surge by the GA Group in Cairns. Their absence of any previous hotel experience was noted.
Meanwhile in other corporate activity Mantra Group shareholders approved the scheme of arrangement and the takeover by Accor will complete next week. Ex Mantra CEO Bob East wont be unemployed long and parachutes onto the board of Experience Co where he will subsequently becomes Chairman. A win for that company with a significant local presence.
Disclaimer: Cairns Economy maintains a modest interest in Reef Casino via a SMSF. This is cheaper than tickets to local theatre.