The Star Entertainment Group has posted a significant loss of AU$302 million ($192.3 million) for 2H24 (1HFY25, as identified by the company) after narrowly avoiding a financial collapse.
The embattled casino operator submitted its results to the Australian Securities Exchange more than a month past the reporting deadline. Trading of its shares on the ASX was approved to resume on Wednesday, April 16th, following a suspension triggered by the delay.
Chief Executive Steve McCann acknowledged the company’s ongoing struggles, telling analysts and investors that Star’s performance “continues to be very challenged” amid a difficult trading environment.
He explained that the loss was attributable to the recent rollout of mandatory carded play, time limits and enhanced customer due diligence processes.
McCann noted that the company had been working intensively to secure additional liquidity, which culminated in a rescue deal involving Bally’s Corporation and pub tycoon Bruce Mathieson‘s Investment Holdings.
The executive further explained that a range of factors had placed pressure on the business, including regulatory reforms, the introduction of mandatory carded play, cash and time limits, and the company’s declining market share in both Sydney and the Gold Coast.
As part of the rescue agreement, Star has already received the first AU$100 million ($63.7 million) tranche of funding. A further AU$200 million ($127.4 million) is expected, contingent on shareholder approval.
The deal came after months of speculation that Star could run out of cash and be forced into administration, as the company repeatedly warned that its future remained uncertain.
In its results statement, Star reported AU$98 million ($62.4 million) in available cash and confirmed that loan waivers were in place with its lenders until the end of June. However, the company cautioned that there is still ‘material uncertainty regarding the group’s ability to continue as a going concern’, despite the secured funding.
The company revealed that trading worsened during the last six months of 2024. Its Sydney casino was particularly affected by the new regulatory measures, while operations in the Gold Coast also suffered due to market share losses and reform impacts.
Group revenue declined by 25 percent, and domestic gaming revenue fell by nearly one-third, partly due to the closure (and sale) of the Treasury Brisbane Casino.
McCann admitted that the company faces a tough road to recovery. He said Star must regain customer trust and market share, after a “very poor customer experience” during the rollout of gambling reforms.
He observed that many patrons were alienated by the abrupt changes and restrictions placed on their gaming behavior.
“We are working hard on re-establishing those customer relationships,” stated McCann, adding that the company is trying to re-engage patrons who have shifted to pubs and clubs where they face fewer restrictions.
The Star entered into a AU$300 million ($180.8 million) investment agreement with Bally’s Corporation in early April, with some AU$100 million ($60.4 million) being contributed by The Star majority shareholder, and pokie billionaire Bruce Mathieson.
Under the terms of its agreement with Bally’s, McCann also revealed that Star is not currently considering selling additional non-core assets.
