5 March 2020

As Canberra Casino losses mount, the owner eyes a new redevelopment proposal

| Ian Bushnell
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Casino Canberra

The Casino Canberra is still eager to develop the city site. Photo: File.

The operator of Casino Canberra insists the future is bright despite posting another loss amid falling revenue and the collapse of its deal with Blue Whale, so it will again roll the dice with the ACT Government to redevelop its prime city site.

In a report to the Australian Stock Exchange, Hong Kong-based Aquis Entertainment said its operating result for the year to 31 December 2019 was a loss of $3,957,193, slightly larger than the $3,396,832 loss it posted in 2018.

Revenue was down 6.14 per cent to $24,433,082 from the 2018 result of $26,032,797, while earnings before Interest, Tax, Depreciation and Amortisation for the year plunged to $72,244 from last year’s figure of $625,885.

Fewer overseas high rollers coming to Canberra hit the casino’s revenue but Aquis said it had cut costs by 4.24 per cent to minimise the losses, including slashing its wages and marketing bills.

A staff restructure saw roles consolidated after employees left and there was an overhaul of its VIP program to focus on profitable areas and more personalised offers to VIP players.

The company is taking heart from increased revenues and less volatility in the second half of the year and is predicting this to continue and stabilise over the coming year, although it does not mention the impact of the coronavirus outbreak on the tourism market.

The $32 million deal in which Blue Whale would have acquired the casino by becoming the major shareholder in Aquis’s Aquis Canberra Holdings (ACH) came unstuck late last year when the parties failed to meet an ACT regulatory deadline. Aquis is now pursuing a $280,000 break fee from Blue Whale.

Aquis now says it is free to resume its bid to redevelop the site, and the company is again in talks with the ACT Government.

In 2018, the Government rejected Aquis’s $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.

Aquis told the ASX it still planned an updated development proposal, ”incorporating the 200 EGMs [electronic gaming machines] for which approval has been legislated”.

“There are several terms in the legislation which require clarification prior to the company being able to settle any plans,” it said.

“Discussions have been held with the government in relation to a plan as to clarification of these items, which will progress through 2020. The company remains committed to the operation of the casino and to advancing the strategy of creating a world-class entertainment precinct in the Canberra CBD with the casino as its centrepiece.”

An ACT Government spokesperson said Aquis had been invited to consider alternatives to its original proposal, including progressing a smaller scale casino development.

The Government remained open to further discussions but it had not yet received a request from Aquis to meet to progress these discussions.

At 31 December 2019, Aquis had cash reserves of $5,105,943 compared with $4,676,086 in 2018 and unused borrowing facilities of $3,071,317.

It has forecast a positive net cashflow for the financial year. It has a net asset deficit of $20,608,884, up from the 2018 figure of $16,651,690, as a result of the loss incurred during the financial year.

Aquis has also confirmed Acting CEO Allison Gallaugher in the top job.

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