Reef Casino Trust (CHIA:RCT) - Share price, News & Analysis

Q: What is the Fair Price of RCT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

RCT (A$3.05) is trading below our estimate of [[fair value]] (A$28.22)

RCT fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	4/6
Financial Health	4/6
Dividends	4/6

RCT Stock Overview

Reef Casino Trust owns and leases the Reef Hotel Casino complex located in Cairns, North Queensland, Australia.

Rewards

Trading at 89.2% below our estimate of its fair value

Became profitable this year

Risk Analysis

Shares are highly illiquid

Dividend of 11.84% is not well covered by earnings

Does not have a meaningful market cap (A$73M)

Reef Casino Trust Competitors

Aquis Entertainment

ASX:AQS

AU$30.5m

Ainsworth Game Technology

ASX:AGI

AU$282.9m

Jumbo Interactive

ASX:JIN

AU$828.8m

Tabcorp Holdings

ASX:TAH

AU$2.2b

Price History & Performance

Summary of all time highs, changes and price drops for Reef Casino Trust
Historical stock prices
Current Share Price	AU$3.05
52 Week High	AU$3.13
52 Week Low	AU$2.63
Beta	1.17
1 Month Change	0%
3 Month Change	n/a
1 Year Change	n/a
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	0.99%

Shareholder Returns

	RCT	AU Hospitality	AU Market
7D	0%	0.6%	3.2%
1Y	n/a	-25.1%	-9.6%

Return vs Industry: Insufficient data to determine how RCT performed against the Australian Hospitality industry.

Return vs Market: Insufficient data to determine how RCT performed against the Australian Market.

Price Volatility

Is RCT's price volatile compared to industry and market?
RCT volatility
RCT Average Weekly Movement	n/a
Hospitality Industry Average Movement	8.3%
Market Average Movement	10.5%
10% most volatile stocks in AU Market	17.2%
10% least volatile stocks in AU Market	4.6%

Stable Share Price: Insufficient data to determine RCT's volatility over the past 3 months.

Volatility Over Time: Insufficient data to determine RCT's volatility change over the past year.

About the Company

Founded	Employees	CEO	Website
1993	n/a	Allan Tan	https://www.reefcasino.com.au/reef-casino-trust

Reef Casino Trust owns and leases the Reef Hotel Casino complex located in Cairns, North Queensland, Australia. The company was founded in 1993 and is based in Brisbane, Australia. Reef Casino Trust is a subsidiary of Reef Casino Investments Pty Ltd.

Reef Casino Trust Fundamentals Summary

How do Reef Casino Trust's earnings and revenue compare to its market cap?
RCT fundamental statistics
Market Cap	AU$72.71m
Earnings (TTM)	AU$7.36m
Revenue (TTM)	AU$26.87m

9.9x

P/E Ratio

2.7x

P/S Ratio

Is RCT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RCT income statement (TTM)
Revenue	AU$26.87m
Cost of Revenue	AU$2.47m
Gross Profit	AU$24.40m
Other Expenses	AU$17.04m
Earnings	AU$7.36m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.30
Gross Margin	90.81%
Net Profit Margin	27.39%
Debt/Equity Ratio	1.6%

How did RCT perform over the long term?

See historical performance and comparison

Dividends

11.8%

Current Dividend Yield

100%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is RCT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RCT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RCT. This is calculated by dividing RCT's market cap by their current preferred multiple.
What is RCT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$72.71m

RCT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.4x
Enterprise Value/EBITDA	3.4x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does RCT's PE Ratio compare to its peers?

RCT PE Ratio vs Peers

The above table shows the PE ratio for RCT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	54.6x
AQS Aquis Entertainment	133.1x	n/a	AU$30.5m
AGI Ainsworth Game Technology	49.3x	11.3%	AU$282.9m
JIN Jumbo Interactive	27.4x	15.7%	AU$828.8m
TAH Tabcorp Holdings	8.6x	0.3%	AU$2.2b
RCT Reef Casino Trust	9.9x	n/a	AU$72.7m

Price-To-Earnings vs Peers: RCT is good value based on its Price-To-Earnings Ratio (9.9x) compared to the peer average (54.6x).

Price to Earnings Ratio vs Industry

How does RCT's PE Ratio compare vs other companies in the Global Hospitality Industry?

Price-To-Earnings vs Industry: RCT is good value based on its Price-To-Earnings Ratio (9.9x) compared to the Australian Hospitality industry average (23.3x)

Price to Earnings Ratio vs Fair Ratio

What is RCT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RCT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	9.9x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate RCT's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of RCT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RCT (A$3.05) is trading below our estimate of fair value (A$28.22)

Significantly Below Fair Value: RCT is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Reef Casino Trust forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

27.1%

Forecasted Consumer Services industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Reef Casino Trust has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

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Examine whether Reef Casino Trust is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.

Past Performance

How has Reef Casino Trust performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

4.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RCT has high quality earnings.

Growing Profit Margin: RCT became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: RCT's earnings have grown by 4.7% per year over the past 5 years.

Accelerating Growth: RCT has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: RCT has become profitable in the last year, making it difficult to compare its past year earnings growth to the Hospitality industry (47.1%).

Return on Equity

High ROE: RCT's Return on Equity (57.4%) is considered outstanding.

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Financial Health

How is Reef Casino Trust's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RCT's short term assets (A$11.9M) exceed its short term liabilities (A$6.1M).

Long Term Liabilities: RCT's short term assets (A$11.9M) do not cover its long term liabilities (A$85.5M).

Debt to Equity History and Analysis

Debt Level: RCT has more cash than its total debt.

Reducing Debt: RCT's debt to equity ratio has reduced from 59% to 1.6% over the past 5 years.

Debt Coverage: RCT's debt is well covered by operating cash flow (9889%).

Interest Coverage: RCT's interest payments on its debt are not well covered by EBIT (2x coverage).

Balance Sheet

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Dividend

What is Reef Casino Trust current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

11.84%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RCT's dividend (11.84%) is higher than the bottom 25% of dividend payers in the Australian market (2.66%).

High Dividend: RCT's dividend (11.84%) is in the top 25% of dividend payers in the Australian market (6.43%)

Stability and Growth of Payments

Stable Dividend: RCT's dividend payments have been volatile in the past 10 years.

Growing Dividend: RCT's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (100.1%), RCT's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (51.9%), RCT's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average board tenure

CEO

Allan Tan

no data

Tenure

AU$221,760

Compensation

Mr. Allan Tan serves as Regional Controller of Australia, Asia & Pacific of Casinos Austria International Holding GmbH. Mr. Tan serves as Chief Financial Officer and Company Secretary of Casinos Austria In...

CEO Compensation Analysis

Compensation vs Market: Allan's total compensation ($USD154.17K) is below average for companies of similar size in the Australian market ($USD283.59K).

Compensation vs Earnings: Allan's compensation has been consistent with company performance over the past year.

Board Members

Experienced Board: RCT's board of directors are not considered experienced ( 1.7 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/25 00:00
End of Day Share Price	2022/06/07 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31