Casino owner Aquis in negative net asset position

Canberra casino reports 2016 losses

After it bought Canberra's casino in late 2014, Aquis put a bid to the government to redevelop of the casino and surrounding precinct, including hotels, shops and restaurants, an to be allowed poker machines, so far restricted only to clubs.

Australia 
| 16/03/2017

The Canberra casino in Australia has reported a worsening loss for 2016 of USD 7.7M as it waits for the government to approve its bells-and-whistles redevelopment.

Casino owner Aquis is in a negative net asset position, with liabilities of $31.3 million outstripping assets by $14,300. The share price has slumped to 5 cents.

But Aquis, majority owned and controlled by chairman and Hong Kong businessman Tony Fung, insists the board is confident about the outlook and says the company is taking on more staff to attract VIP gamblers.

Gambling revenue was up 21 per cent in 2016 compared with 2015, to $22 million, according to the company's 2016 financial statements. Food and drink revenue was also up, at $2.23 million for the year, despite the disruption to much of the casino's business while it refurbished early in 2016, the company reported. Spend per visitor was up 33 per cent.

The directors believes there are "reasonable grounds to believe that the consolidated entity will be able to continue as a going concern", the financial report says, referring to a $4.9 million unused borrowing facility, and an increase in business expected as a result of the refurbishment. Major shareholder Aquis Canberra Holdings had provided an undertaking to provide financial support if required, the report said.

Aquis has lost its chief executive and its chief financial officer in the past six months

New chief executive Jessica Mellor said the casino had suffered from years of under-investment, and despite the challenges of turning that around, Aquis had delivered significant revenue growth in its two years - 38 per cent in 2015 and 22 per cent in 2016.

"Strong top-line growth is a validation of the new energy we have injected into the business," she said. pointing also to increases in gaming tax paid to the government, of 23 per cent and 18 per cent, compared with 4 per cent year-on-year declines in previous years.

Since reopening after the $14 million refurbishment in 2016, Aquis had continued to appoint "experienced leaders from around the world to lead key operational areas including food and beverage, marketing and gaming", she said.

"Aquis Entertainment will continue to invest strongly in our long-term plan. Our auditors and directors all believe that the company is financially stable with performance and growth prospects in line with expectations and our business plans"

After it bought Canberra's casino in late 2014, Aquis put a bid to the government to redevelop of the casino and surrounding precinct, including hotels, shops and restaurants, an to be allowed poker machines, so far restricted only to clubs.

After the government gave its in-principle support, the casino put a formal business case to the government in June last year. It proposed spending $307 million on the development, in two stages over five years.

The plan hit a snag soon after when the Greens' Shane Rattenbury said the party would only support the bid if the casino's poker machines were limited to $1 spins and $500 jackpots, as well as mandatory pre-commitment, where gamblers nominate up front how much they are going to spend.

It is unclear what impact Mr Rattenbury's conditions will have on the bid, but meantime, the government has been assessing the business case. The casino says it has been told that assessment complete and a recommendation will go to cabinet "imminently".

A spokesman for Chief Minister Andrew Barr said the proposal was still being analysed at directorate level.

Aaron Gomes resigned as chief executive in October "following an agreement between the board and Mr Aaron Gomes not to extend his contract", according to the company. He had been in the job a year, and was replaced by Jessica Mellor. Ms Mellor was appointed on a salary that rises to $450,000 once her probationary period ends in April, plus a 25 per cent guaranteed bonus and another 25 per cent performance bonus.

Company secretary and chief financial officer Garry Gill resigned in January and leaves in April.

Aquis's ultimate parent company is TF Reef Canberra Holdings Ltd, incorporated in the British Virgin Islands.

Yogonet.com/canberratimes.com.au