blog image

Reef Casino Trust, the entity behind the Reef Hotel Casino in Cairns, Australia, reported a sharp 23.9% drop in net profit attributable to members for the first half of 2025, falling to AU$1.65 million (≈ US$1.02 million) from AU$2.17 million (≈ US$1.34 million) in H1 2024. Revenues slipped 3.3% to AU$11.24 million (≈ US$6.94 million) from AU$11.62 million (≈ US$7.18 million).

Distributions Take a Blow

Distributable profit—a key figure for unitholder payouts—also fell by 23.9%, down to AU$3.30 million (≈ US$2.04 million) from AU$4.34 million (≈ US$2.68 million). As a result, distributions dropped to 6.63 cents per unit, down from 8.71 cents per unit in the prior year.

Behind the Decline: Rising Costs and Takeover Expenses

Chair Wendy Morris pointed to key pressure points:

  • Increased costs due to a casino supervisory levy and expenses associated with meeting regulatory uplift requirements significantly eroded returns from rentals tied to the Reef Hotel Casino complex.

  • Transaction-related costs from the ongoing takeover bid further weighed down profits—in fact, distributable profit would have been approximately AU$536,000 (≈ US$331,000) higher without these outlays.

Bright Spots: Operational Resilience

Despite the headwinds, certain segments performed well:

  • Hotel room revenues rose 9.4%, driven by strong interstate tourist demand.

  • Table gaming saw a healthy 6.8% increase.

  • However, an 0.3% decline in electronic gaming and a 3.3% dip in food and beverage sales slightly offset these gains.

Takeover Bids Heat Up

Reef Casino Trust’s takeover saga is intensifying:

  • Iris Cairns Property Pty Ltd raised its offer to AU$3.72 per unit, valuing the company at about AU$185.3 million (≈ US$114.5 million). The board and major shareholders—including Accor and Casinos Austria International—have given unanimous support, contingent on no superior offer emerging and favorable independent expert assessment.

  • The break fee has been increased to AU$1.9 million, and regulatory approval conditions were removed following ACCC clearance.