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Star’s problems mount after horror year leaves $2.4b loss; April opening still on track

Star Entertainment has reported a $2.4 billion loss for the year after writing down the goodwill and property values of its Brisbane, Gold Coast and Sydney casinos.

Aug 29, 2023, updated Aug 29, 2023
Star Entertainment whas won a six-month reprieve against threats to cancel its casino licences.(Image: Supplied Queen's Wharf).

Star Entertainment whas won a six-month reprieve against threats to cancel its casino licences.(Image: Supplied Queen's Wharf).

The result caps a disastrous year for the company which faced $100 million fines in NSW and Queensland over its money laundering compliance failures following two inquiries.

Before significant items the result was a $41 million profit and its EBITDA of $317 million was slightly ahead of guidance.

Chief executive Robbie Cooke said to describe the year as challenging “understates the lived experience at The Star over the past 12 months”.

Although the bottom line result was poor, investors lifted Star’s share price by 3 per cent this morning after it hit record lows of 94 cents yesterday.

While the devastating impact of two inquiries into its operations were behind it, the company was still facing significant challenges.

It revealed that its legal issues with Multiplex over the construction of the Queens Wharf project in Brisbane had been expanded with an application for adjudication by the Queensland Building and Construction Commission.

“The application is seeking awards by the adjudicator for extensions of time, certification of stage completion, entitlements to liquidated damages and payment of certain amounts under the design and construction contract,” Star said.

The claim is separate from the one lodged in the Supreme Court by Multiplex over costs and delays.

Star said that during the financial year its Gold Coast property generated an EBITDA of $107 million for the year, a 20 per cent increase on 2022, but Star said it was impacted by increased regulatory controls which led to an increased number of excluded guests.

Costs at the site jumped 24 per cent, partly because of increased compliance.

Brisbane’s Treasury casino generated an EBITDA of $83 million, up 29 per cent on the previous year and Star said its focus was on regaining suitability to hold a casino licence.

The Queen’s Wharf project in Brisbane was on track for its April 2024 staged opening. Its casino licence suspension, imposed by the State Government after the Gotterson inquiry, would come into effect on December 1 for a period of 90 days.

The costs of Queens Wharf were estimated to be about $2.9 billion.

It also expected recommendations from the Gotterson inquiry to be implemented through legislation amendments in the Queensland Parliament this year. They were likely to include mandatory carded play, cash and time play limits and mandatory pre-commitment restrictions on electronic gaming machines.

Provisions made in the accounts included $423 million for regulatory and legal issues including fines issued by the NSW regulators, the Queensland Office of Liquor and Gaming and AUSTRAC.

So far this financial year, trading in Brisbane was down 14 per cent on the same time last year. The Gold Coast was down 17 per cent and Sydney 23 per cent.

Cooke said the consequences flowing from the damage to Star’s social licence were being felt daily.

“The ancillary challenges that have arisen in the year _ and there are many _ all follow from the breaches of trust identified in the Bell and Gotterson reports,” he said.

“As a team we are determined to earn back the trust and confidence of our community including our regulators, governments, shareholders, employees and guests.

“Remediation is our number one priority. We have commenced the uplift in our risk management, safer gambling and anti-money laundering capability and are starting to embed greater accountability and more robust governance.

“Our remediation program will track and hold us accountable to the multi-year program we are committed to delivering.”

 

 

 

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