Casino off to ‘soft’ start
THE Reef Casino Trust has attributed a slower Chinese New Year and increased competition in the Cairns gaming sector to its “soft” start to 2017.
From January 1 to June 30, the ASX-listed company recorded a 17.4 per cent drop in revenue compared to the first half of 2016.
According to the half-year financial report released yesterday, the trust’s total distributable profit of $3.66 million was 38.2 per cent below last year’s figure.
The majority of the company’s $9.2 million in revenue during this period – compared to $11.2 million in 2016 – was derived from Reef Hotel Casino rental income.
“This (decline) was due to lower rental income arising from strong local electronic gaming competition, subdued premium gaming activity … and a general softening of the local tourism market in the first half year,” chairman Ben Macdonald said in his review.
He also blamed the arrests of staff from “another Australian casino operator” in China as having a “consequential impact”.
It comes after a host of Crown Resorts employees were detained in China and charged with the illegal promotion of gambling.
The Reef Hotel Casino's food and beverage revenue was up almost 17 per cent with the facility’s new Bar 36 driving the growth.
The company has also introduced a new “room rate strategy” aimed at boosting hotel revenue.
Despite the soft start to the year, Mr Macdonald was upbeat about the trust’s prospects for the remainder of 2017.
“The trust has entered into the second half of this year with a stronger start than the first half and a slightly stronger July trading performance compared to last year,” he said.
Mr Macdonald said electronic gaming, table games and hotel operations were “key strategies areas” to underpin the company’s growth.
China Southern Airlines will begin year-round direct flights between Cairns and Guangzhou in December, which Mr Macdonald said would add to Chinese tourism growth and have a “positive impact” on casino operations.
Shares in the trust (RCT) were yesterday trading at about $2.80 each.
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