What factors led to the decrease in gross profit margin?

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Factors Contributing to the Decrease in Gross Profit Margin

The gross profit margin for the year ended 30 June 2025 experienced a decline primarily due to the introduction of new gaming taxes and licensing fees following the Group's assumption of casino operations in May 2024. This shift in operational structure, coupled with significant renovation activities, directly impacted profitability metrics.
Impact of Gaming Taxes and Licensing Fees

A substantial contributor to the reduced gross profit margin was the imposition of gaming taxes and licensing fees. These costs were incurred subsequent to the Group taking over the direct management of casino operations on May 9, 2024. The introduction of these new financial obligations inherently increased the cost of revenue, thereby compressing the profit margin.
Write-offs from Casino Renovation

The Group's initiative to renovate its casino facilities also played a role in the decrease of the gross profit margin. The written-off of leasehold improvements, a necessary accounting adjustment during major renovation projects, represented an additional expense that reduced the overall profit. These improvements were undertaken as part of a broader strategy to elevate customer experience and accelerate growth.
Increased Operating Costs During Transition

The transition to managing its own casino operations necessitated higher operating expenditures. This included increased staff costs, as the Group brought operations in-house, and elevated selling and marketing expenses. These rising operational costs, directly linked to the change in management and associated strategic initiatives, further contributed to the pressure on the gross profit margin.

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What factors led to the decrease in gross profit margin?

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