Friday, May 16, 2014

Reef Casino trading update subdued

The Reef Casino AGM this week will most likely be the last as reported at the Cairns Post: Cairns Reef Hotel Casino sale now odds-on. Acceptances for the takeover by Aquis are actually proceeding quite slowly after almost two months and now stand at 77% with 90% required for compulsory acquisition of the remainder. This isn't a surprise as holders wont get paid anyway until all the approvals are completed and the offer becomes unconditional. This may take some months yet.

However most interesting was actually the trading update for the first four months of the year which was rather subdued with softer visitations reported.

Update for 1st 4 months 2014 and brief outlook

The rentals paid to the Trust for the first 4 months were 3.2% above last year. Another excellent Chinese New Year and growth in electronic gaming revenues has countered the impact of softer visitations. Costs remained under control.

Electronic gaming:  With a reduction in government red tape including a reintroduction of $50 and $100 note acceptors for slots machines and a planned introduction of “card based play” in addition to existing cash play, the outlook is positive.

Table games:  Chinese tourists to Australia continue to grow and Cairns remains a popular destination. Chinese New Year during January/February this year produced another excellent ‘busy’ season. Direct flights from Shanghai to Cairns have now been cancelled and along with the new travel legislation in China, could have a dampening impact on growth rate. Short term fluctuations in premium win rate are not unusual. Overall, the outlook is still slightly optimistic.

This updated report itself is not as informative as usual and appears even disinterested. Perhaps they are all just waiting around for the fat lady to sing in Vertigos Bar?

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