Reef Casino Trust, operator of the Reef Hotel Casino in Cairns, Australia, reported a significant decline in financial performance for the first half of 2025, with net profit attributable to members falling 23.9 percent to AU$1.65 million ($1.02 million) compared to AU$2.17 million ($1.34 million) in the same period last year.
The trust’s revenue from ordinary activities also decreased, dropping 3.3 percent to AU$11.24 million ($6.94 million) from AU$11.62 million ($7.18 million) in the first half of 2024. This decline in revenue, combined with higher operational costs, contributed to the reduced profitability.
Distributable profit, a key metric used to determine distributions to unitholders, fell 23.9 percent to AU$3.30 million ($2.04 million) from AU$4.34 million ($2.68 million) in the prior period. Consequently, unitholder distributions were reduced to 6.63 cents per unit compared to 8.71 cents per unit in the first half of 2024.
Chair Wendy Morris attributed the challenging performance to several factors impacting the trust’s primary income source – rentals from the Reef Hotel Casino complex. “Total revenues at the Reef Hotel Casino were above the prior comparative period, however, higher costs primarily the casino supervisory levy and costs in relation to achieving regulatory uplift requirements resulted in lower rentals for the Trust,” Morris explained.
The trust’s performance was further impacted by transaction-related costs associated with a proposed takeover bid. According to the report, distributable profit would have been approximately AU$536,000 ($331,000) higher without these costs.
Despite revenue challenges at the complex level, some segments showed resilience. Hotel room revenues increased 9.4 percent, supported by strong bookings from interstate visitors. Table gaming revenues also rose 6.8 percent, though this was offset by a 0.3 percent decline in electronic gaming revenue and a 3.3 percent decrease in food and beverage sales.
The trust faces ongoing challenges from regulatory changes following the Casino Control and Other Legislation Amendment Act 2024, which has resulted in increased compliance costs and regulatory fees. Additionally, the slow recovery of international tourism to pre-COVID levels continues to impact visitor numbers.
In the near future, the trust is subject to a takeover bid from Iris Cairns Property Pty Ltd, offering AU$3.72 ($2.30) per unit, which would value the trust at approximately AU$185.3 million ($114.5 million). The board has unanimously recommended unitholders accept the offer, subject to certain conditions including regulatory approval and an independent expert’s assessment.
The trust maintains total assets of AU$100.96 million ($62.39 million) and an unused debt facility of AU$13.0 million ($8.03 million), providing financial stability despite the current performance challenges.
