Star Entertainment Returns to Profit in H1 Following Revenues Drop
LISTEN TO THIS ARTICLE:While there was a decline in group revenue, Star Entertainment has reported a return to net profit for the first half of the 2024 financial year.
The group’s revenue dropped 14.6% to AU$865.7 million in H1. However, the gambling operator made net profit of $9.1 million, which is a significant improvement on the $1.26 billion it lost the previous year.
Last year’s loss was due to the write-down in the value of the group’s casinos in Sydney, Brisbane and Gold Coast following a number of anti-money laundering and social responsibility failings. While things do seem to have turned around, recent news suggests that there is some way to go with the New South Wales Independent Casino Commission (NICC) confirming a second inquiry into the operator.
The inquiry is due to report on 31 May and it will be led by Adam Bell SC, who supervised the first Bell report. He will be looking at how successfully Star has implemented the recommendations from the first inquiry.
Mixed H1 Results Following Delay
The announcement of the second inquiry caused Star to delay announcing its H1 results. However, CEO Robin Cooke claims that they have made good progress over the past half year.
While the group continues to operate in a challenging regulatory environment, Star has achieved a number of significant milestones in the period. Our remediation plan was approved in Queensland. The resolution of the proposed increase to NSW casino duty rates has removed significant uncertainty for our Sydney property and has protected thousands of jobs for our team members in New South Wales.
Notwithstanding these achievements, there is still much work to be done. Remediation remains our number one priority. We continue to uplift our risk management, safer gambling and AML capabilities and are starting to embed greater accountability and more robust governance.
Revenue Down at All Star Venues
Looking at the H1 results, domestic gaming activity remained Star’s main revenue source at $683.3 million. However, this was down 16.7% on the previous year. There was also a fall of 5.6% in non-gaming revenue to $176.4 million. Other revenue fell 3.2% to $6 million.
Star Sydney brought in revenue of $450 million, a drop of 16.9% that the group explained was due to new regulatory and responsible gambling measures. Star Gold Coast saw revenue fall 13.6% to $238.1 million, which Star said was due to a drop in customer spending following a surge in spending after the pandemic. Finally, revenue at the Treasury Brisbane fell 9.6% to $177.6 million.
However, Star did reduce its spending with operating expenses down 5%, and gaming tax and levies down 13.6%. Furthermore, depreciation and amortization was down 38.3%.
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