Star Entertainment Group has released its FY24 results, which were delayed, and they show a business under heavy financial and regulatory strain. According to the company, group revenue was $1.67bn, a 10% fall on the previous year. EBITDA was $175m, down 45%.
The source reports net profit after tax of $12m, a 71% drop from $41m a year earlier. It also reports a net loss of $1.68bn. The source does not explain how the two figures relate, so readers should consult the company's full financial report for the detail.
Trading deteriorating into FY25
Star said its trading performance "deteriorated" over the second half of the year, and that this trend "has continued into the beginning of FY25". July and August recorded EBITDA losses of $6.6m and $1.1m respectively. The company attributed higher operating expenses to "ongoing transformation and remediation related activities", a reference to obligations arising from the first and second Bell inquiries.
The results were late. Trading in Star shares was halted on the ASX for several weeks after the latest Bell report and the company's failure to publish its financial report by 31 August.
Star said it "faces significant near-term liquidity requirements". These include normal operating costs, remediation spending, contributions to the Queen's Wharf Brisbane (QWB) joint venture, and potential civil penalties from AUSTRAC, the financial crime regulator.
On 25 September, Star announced a new $200m debt facility with its lenders. Its original $450m facility has been reduced to $334m, which is fully drawn. The first tranche of the new money can be drawn from 31 October to 20 December. The second is "subject to more extensive conditions" and can be drawn from next year, with "a four-month availability period following the drawing of the first tranche".
"There are a number of significant challenges currently facing the business from an earnings, liquidity and balance-sheet perspective," CEO Steve McCann said in a statement.
McCann took over in late June. He said Star is putting in place a new management team and strategy to carry out a remediation and transformation programme.
Property by property
Star Sydney, the subject of the Bell inquiries, recorded revenue of $878m and EBITDA of $52m, down 11% and 59%. The company blamed "cost of living pressures as well as casino operating reforms and loss of market share". Non-gaming revenue was "more resilient" but still fell 2%.
Star Gold Coast revenue fell 10%, from $509m to $456m. EBITDA fell 33%, from $107m to $71m. Non-gaming revenue dropped 5%, which the company attributed primarily to lower restaurant and bar revenue.
Treasury Brisbane, which closed on 25 August because of the QWB opening, reported revenue of $344m, down 8%. EBITDA was $52m, down 38%.
QWB began a phased opening on 29 August. Star said it contributed $75m to the venture in FY24 and expects to contribute $174m in FY25 and $183m in FY26 and beyond. The partners are Far East Consortium and Chow Tai Fook Enterprises.
Bell Two and the licence question
The update repeatedly referred to the second Bell inquiry into the suitability of Star Sydney. The final report went to the NSW Independent Casino Commission (NICC) on 31 July and was made public on 30 August. The source describes its contents as painting a grim picture of a casino struggling after two rulings of unsuitability in three years.
The NICC issued a show cause notice to Star on 13 September and is still "considering next steps". Star confirmed it will submit a formal response on 27 September. The company said it is reflecting on the Bell Two recommendations and, subject to any NICC response, will seek to implement relevant ones "at an appropriate time". It added that it has already completed a "comprehensive reset of the remediation plan".
The source says possible outcomes include further fines, more regulatory restrictions, or licence revocation. It describes revocation as unprecedented. The NICC has not announced any decision.