Ownership change? Reef Casino's trading halt mounts speculations amid lacklustre 2024 performance
Reef Casino Trust has suspended trading in its securities following mounting speculation over a potential change of control. The trading halt was implemented on 25 February 2025 at the request of Reef Corporate Services Limited, the Trust’s responsible entity. It will remain in place until either an official announcement is made or trading resumes with the start of regular sessions on 27 February 2025. This measure prevents market disruption while management addresses the rumours about ownership change.
Trading halt and ownership speculation
The temporary pause in trading comes amid growing speculation that Reef Casino Trust could face a “potential control transaction.” While the Trust has not provided further details, its decision to request a trading halt under ASX Listing Rule 17.1 indicates that management is preparing to clarify the situation. Industry observers suggest that this move may ensure that all investors have access to complete and accurate information before the market reacts further.
2024 financial results in focus
Reef Casino Trust recently released its full-year earnings report. For the year ended 31 December 2024, Reef Casino Trust reported total revenue and other income of A$25.52 million, a decline of 2.9 percent compared to A$26.29 million in 2023. This revenue primarily derives from rental income paid by the operator of the Reef Hotel Casino, which remains the Trust’s sole asset.
Profit figures also reflected a slight contraction. The Trust’s net profit for the period was A$5.08 million—down 5.3 percent from the A$5.37 million recorded in the previous year. The distributable profit, a non-IFRS measure used to determine the amount available for distribution to unitholders, stood at A$10.17 million for 2024, representing a similar 5.3 percent decrease from FY23 levels. Consequently, the declared distribution for the six-month period ended 31 December 2024 was 11.71 cents per unit, compared to 12.25 cents per unit in FY23.
Operational review and key cost drivers
Despite external challenges, the Trust’s Chair’s Review described the 2024 results as “stable” and in line with pre-pandemic performance levels. Rental income suffered due to increased operational costs, particularly in payroll and regulatory compliance.
The report also highlights that operating expenses were marginally lower, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) coming in at A$15.34 million, just below the A$15.73 million achieved in the previous year. Higher depreciation and amortisation expenses, which increased from A$4.90 million to A$5.07 million, along with a modest rise in interest expenses, contributed to the decline in net profit margins.
Financial position
At the close of FY24, Reef Casino Trust reported net tangible assets of A$101.13 million, with an unchanged net tangible asset backing per unit of approximately A$1.37. The Trust also reported an unused debt facility of nearly A$15 million, ensuring ample liquidity to support ongoing operations and future capital investments.
Looking ahead, the Trust’s management remains cautious amid ongoing market uncertainties. Key challenges include persistent inflationary pressures, elevated regulatory costs, and subdued international visitation—a trend that has yet to return to pre-pandemic levels.
As Reef Casino Trust’s trading halt hints at uncertainty around its ownership structure, its 2024 financial performance hints at larger challenges in the industry, such as a shortfall in international visitors, inflation, increased compliance, and regulatory changes.
