Reef Casino Trust, operator of the Reef Hotel Casino in Cairns, Australia, has released its financial review for 2024, showcasing stable performance amid ongoing challenges in the post-pandemic recovery.
The Trust reported a distributable profit of AU$10.1 million ($6.4 million), consistent with pre-pandemic annual results, despite total revenue and other income slightly declining to AU$25.5 million ($16.1 million) from the previous year.
This decline was attributed to increased operational costs, particularly in payroll and regulatory compliance, which offset gains seen at the Reef Hotel Casino complex.
Brad Sheahon, CEO of the Responsible Entity of the Trust, also provided insights into the performance of the Reef Hotel Casino, operated by Casinos Austria International (Cairns) Pty Limited (CAIC), noting that that local and domestic markets held up well for the complex.
However international tourism has not yet recovered to pre-pandemic levels, with aggregate complex revenues derived from both the Casino and Hotel were 1.8 percent higher than in the previous year.
Regulatory changes and inflationary pressures have resulted in increased costs—particularly in supervisory levies and compliance improvements—leading to reduced rental income for the Trust.
The Executive Leadership Team at the Reef Hotel Casino was said to have effectively managed operating costs amidst new regulatory requirements and rising labor, insurance, and energy expenses, despite challenging market conditions.
Visitation to the Reef Hotel Casino increased by 1.5 percent, primarily driven by local and domestic visitors, with proportionally fewer international guests. This increase in visitation is crucial as it drives revenue throughout the complex.
Electronic gaming revenues rose by 3.2 percent, making it the biggest contributor to the rents paid to the Trust, and continuing to perform well due to ongoing patron support from local and domestic markets. In contrast, table gaming revenues decreased by 8.3 percent.
While grind table gaming results were marginally better than the prior year, premium play results suffered due to a lower win rate and fewer premium players visiting compared to FY23. Table gaming was primarily supported by local and interstate visitors.
The Trust’s net assets stood at AU$101.1 million ($64.4 million), supported by an unused debt facility of AU$14.9 million ($9.5 million).
“While we continue to navigate the effects of the pandemic, our results demonstrate resilience,” said a spokesperson for the Board of Directors. “Our strategy remains focused on maintaining operational efficiencies and enhancing our offerings to attract guests.”
The Trust added that the passing of the Casino Control and Other Legislation Amendment Act 2024 introduced a changing regulatory environment, necessitating the acquisition of new gaming products and enhanced business practices focused on harm minimization and compliance, and increased regulatory fees and associated costs are also anticipated.
The directors also declared a distribution of AU$5.8 million ($3.7 million) for the second half of the year, equating to 11.71 cents per unit ($0.008), with payment scheduled for March 12th, 2025.
The financial position of the Trust was said to ‘remain strong, with adequate working capital and liquidity’, with a renegotiation of the Trust’s interest-only term loan facility with the Bank of Queensland ensuring continued financial stability.
Capital investments were also strategically managed, focusing on essential upgrades, including new gaming machines and improvements to food and beverage services, aimed at enhancing the guest experience and operational efficiency.
‘The future performance of the Trust will primarily rely on the local economy and on tourism to Cairns, the Great Barrier Reef and the wider Far North Queensland region’, the report noted.
