The company that owns Casino Canberra continues to lose money, reporting a $2,553,772 loss for the six months to 30 June, but it says it is still talking to the ACT Government about development possibilities.
Hong Kong-based Aquis Entertainment Limited said the half-yearly loss was up 18.4 per cent on the same period last year from $2,156,212, with revenue falling 2.7 per cent from $12,317,421 to $11,985,194.
Earnings before interest, tax, depreciation and amortisation were $557,242 (down 176.2 per cent), while earnings before interest and tax were $1,455,554 (down 34.7 per cent). Operating costs were slightly up.
Late last year, Blue Whale Entertainment Pty Ltd, owned by Michael Gu, the CEO of iProsperity Group, acquired the casino in a $32 million deal which saw it become the major shareholder in Aquis Entertainment.
The sale came after the ACT Government rejected its $330 million unsolicited bid to redevelop the casino precinct after protracted negotiations broke down over the conditions imposed on the project, including the number of poker machines it would be allowed to operate.
Blue Whale is associated with the investment manager of the SB&G Hotel Group (Australia) Fund, the owner of the Crowne Plaza Hotel, located adjacent to Casino Canberra on Glebe Park, and the $50 million Holiday Inn Express development proposed for the same site.
Blue Whale said at the time that it was excited about the potential future synergies that could be generated for Casino Canberra through this relationship and that it planned to upgrade the facility, including adding new world-class restaurants as part of its vision to reinforce the casino as the entertainment hub of the nation’s capital and attract more visitors.
But the directors’ report said the company’s marketing focused on the casino’s 2016 refurbishment, not new developments.
Aquis said it was reining in costs, improving business processes and continuing to liaise with the ACT Government in relation to redevelopment options and associated legislative conditions.
The directors said a strong budget has been set for the year, with the expectation of positive earnings before interest, tax, depreciation and amortisation and cash flows for the full financial year.
“The half-year results achieved have been slightly below those targets;, however, management continues to focus on the Group’s strategy and expect to achieve the target for the full year,” they said.
Aquis first lodged the business case for its expansion plans in 2016, including a resort-style entertainment, dining and retail precinct in the city, but negotiations reached an impasse after the Government legislated so the casino could acquire a capped number of poker machines but then sought more detailed financial information about the bid.
Aquis said last year that sticking points included the current legislative framework, which limits the number of poker machines to 200 instead of the 500 the casino wants, and the Government deciding not to make certain land available to the casino.
It said the financial information the Government sought could not be provided without the Government providing certainty about key aspects of the proposal including tax rates, licence fees and the legislative framework.
The redevelopment proposal was also subject to the casino adopting harm-minimisation measures, including mandatory pre-commitment and $2 maximum bets.
A Government spokesperson said at the time that Aquis could still submit a revised unsolicited bid through Treasury’s unsolicited proposals process, purchase an alternative site via a competitive sales process or pursue a smaller development on the existing lease through a development application.