The Star Entertainment Group has published its financial results for FY24, shedding light on a challenging fiscal year. The company reported a total revenue of AU$1.69 billion, which marks a 10% year-on-year decline. The Star attributed this decrease to several key factors, including cost of living pressures, casino operating reforms, and a significant loss of market share.

The Star Entertainment Group FY24 Financial Results

Revenue Drop Driven by External Pressures and Reforms

During FY24, The Star Group faced macroeconomic challenges and regulatory changes that severely impacted its financial performance. The cost of living crisis, compounded by increasing inflation, dampened discretionary spending, leading to a significant reduction in customer visits and overall gaming activity. Additionally, operating reforms related to compliance, particularly around responsible gambling initiatives, added financial strain on the company’s casinos, further contributing to revenue decline.

Key Financial Figures for FY24

• Total Revenue: AU$1.69 billion (-10% YoY)
• EBITDA: AU$175 million (-45% YoY)
• Net Profit After Tax: AU$12 million (-71% YoY)
• Statutory Net Loss: AU$1.69 billion (an improvement from AU$2.44 billion in FY23)

The Star’s management has stressed that both the revenue and EBITDA figures were consistent with previously announced earnings guidance, yet they reflect the harsh business environment of the past year.

EBITDA Takes a Sharp Hit

One of the most striking metrics in the FY24 results is the sharp decline in EBITDA, which plummeted by 45% to AU$175 million. This figure highlights the growing operational costs and profitability challenges faced by the company. The Star had anticipated this decline and had factored it into its financial forecasts, citing increased compliance costs and competitive pressures as leading contributors.

Individual Casino Performance: The Star Sydney, Gold Coast, and Treasury Brisbane

The Star Group operates three major properties—The Star Sydney, The Star Gold Coast, and Treasury Brisbane—all of which experienced a dip in performance. These casinos saw revenue and EBITDA reductions due to market contraction and tightening regulations. The upcoming closure of Treasury Brisbane in August, ahead of the opening of The Star Brisbane, further impacted the overall results for FY24.

• The Star Sydney: Suffered from regulatory reviews and lower foot traffic.
• The Star Gold Coast: Faced heightened competition from new market entrants.
• Treasury Brisbane: Closed operations ahead of the launch of its successor property, which contributed to lower revenue in the final months of the fiscal year.

Profit After Tax Slumps to AU$12 Million

Perhaps the most significant figure in the FY24 report is the 71% decline in net profit after tax, which fell to AU$12 million. This sharp reduction underscores the long-term impact of market pressures, compounded by higher operational costs and regulatory compliance expenditures. Despite this, the company’s statutory net loss of AU$1.69 billion shows a notable improvement compared to the AU$2.44 billion loss reported in FY23, a result of cost-saving measures and strategic initiatives aimed at streamlining operations.

Statutory Net Loss Improvement: AU$1.69 Billion in FY24

Despite the revenue and profit declines, The Star Group managed to narrow its statutory net loss to AU$1.69 billion, a 31% improvement over the AU$2.44 billion loss recorded in FY23. This improvement is largely attributed to the company’s efforts in cost control and liquidity management, although significant challenges remain.

Regulatory Compliance and Ongoing Challenges

The company continues to navigate an increasingly stringent regulatory environment, which has affected its overall trading performance. New regulatory changes related to casino operations and responsible gambling standards have placed additional financial and operational burdens on The Star’s properties.

Strategic Response: Remediation and Transformation Program

In light of the ongoing challenges, The Star Group has unveiled a remediation and transformation program designed to restore the company’s financial health and regain regulatory approval. The company is placing a heavy emphasis on improving its earnings, liquidity, and balance sheet while strengthening relationships with regulators.

CEO Steve McCann on Future Prospects

Steve McCann, The Star Group’s CEO (pending regulatory approvals), outlined a comprehensive strategic plan to address these issues. He acknowledged that the company faces substantial liquidity challenges, but assured stakeholders that the newly formed management team is committed to putting the business on a more sustainable trajectory.

“There are a number of significant challenges currently facing the business from an earnings, liquidity, and balance sheet perspective. We recognize and appreciate the support provided to date by our stakeholders as The Star puts in place a new management team and strategy to implement a remediation and transformation program, and return the company to a more sustainable footing,” McCann said.

Key Initiatives to Improve Liquidity and Business Performance

The Star Group has identified several strategic initiatives aimed at improving business performance and providing the organization with additional liquidity. These include:

• Operational efficiency improvements to streamline costs and boost cash flow.
• Restructuring debt and securing additional lines of credit.
• Asset divestments and capital recycling initiatives to unlock liquidity.

However, the CEO stressed that time and flexibility will be required to fully implement these initiatives and realize their intended benefits.

Rebuilding Trust with Stakeholders and Regulators

One of the central themes of The Star Group’s recovery strategy is to rebuild trust with regulators and the broader community. The company remains focused on demonstrating its suitability to hold casino licenses, adhering to new regulatory standards, and enhancing shareholder value over the long term.

McCann concluded, “As we work through these initiatives, the Board and management team remain focused on demonstrating suitability to hold our casino licenses and regaining the trust and support of our regulators and the broader community while seeking to enhance shareholder value.”

Outlook for FY25 and Beyond

As The Star Group moves into FY25, the company will continue to grapple with the economic and regulatory challenges that have defined its recent performance. However, with a clear strategy in place and a new management team leading the charge, The Star aims to improve business performance and regain its competitive edge in the gaming industry.

Conclusion: The Financial Results

The Star Entertainment Group’s FY24 financial results paint a picture of a company navigating turbulent waters, but one that remains committed to restoring profitability and stability. With strategic initiatives in place to address liquidity issues and improve operational efficiency, The Star is taking the necessary steps to position itself for future growth.

FAQs About The Star Entertainment Group FY24 Financial Results

1. What was The Star Entertainment Group’s total revenue for FY24?

The Star Entertainment Group reported a total revenue of AU$1.69 billion for FY24, representing a 10% decline year-on-year due to factors such as cost of living pressures, casino operating reforms, and loss of market share.

2. Why did The Star’s EBITDA drop significantly in FY24?

EBITDA declined by 45% to AU$175 million due to rising operational costs, compliance expenses, and regulatory pressures, particularly related to responsible gambling initiatives. These challenges were compounded by a decrease in market share and customer spending.

3. How did The Star’s casinos perform in FY24?

All three of The Star’s major properties—The Star Sydney, The Star Gold Coast, and Treasury Brisbane—saw drops in revenue and EBITDA. The Star Sydney was impacted by regulatory reviews, The Star Gold Coast faced increased competition, and Treasury Brisbane ceased operations in August, ahead of the opening of The Star Brisbane.

4. What was The Star’s net profit after tax in FY24?

The Star’s net profit after tax for FY24 was AU$12 million, reflecting a 71% decrease from FY23, primarily due to market pressures and increased operational costs.

5. How did The Star’s statutory net loss improve from FY23 to FY24?

The statutory net loss improved from AU$2.44 billion in FY23 to AU$1.69 billion in FY24, a 31% improvement driven by cost-saving initiatives and liquidity management, despite ongoing market challenges.

6. What is The Star’s plan for addressing its financial challenges?

The Star has launched a remediation and transformation program aimed at improving earnings, liquidity, and balance sheet health. The plan includes operational efficiency measures, debt restructuring, and asset divestments to unlock liquidity.

7. What role does regulatory compliance play in The Star’s current challenges?

Regulatory compliance has been a major factor in The Star’s difficulties, with new rules around responsible gambling and casino operations adding financial pressure. The company is working to meet these regulatory standards while regaining the trust of stakeholders and regulators.

8. What are the key priorities of The Star’s new management team?

The new management team, led by CEO Steve McCann, is focused on improving business performance, enhancing liquidity, and regaining trust with regulators, all while steering the company towards long-term sustainability.

9. What are The Star’s prospects for FY25 and beyond?

The Star aims to navigate through the economic and regulatory challenges by implementing strategic initiatives. The company is working to improve its business performance, strengthen its competitive position, and regain shareholder value in FY25 and beyond.