Star cites regulatory pressure in unaudited H1 FY22 results

Star Entertainment has provided an earnings update for its H1 FY 2023 and a full-year earnings outlook assessment for FY 2023. The results presented by the company earlier this week were unaudited and are subject to change, The Star said in a press release.

The Star’s latest update confirmed that its operating results have been impacted by the Bell and Gotterson Reviews into the company’s dealings with specific VIP customers that had triggered a massive investigation and a deep company change insofar as The Star’s gambling operations are concerned.

Regardless, The Star’s Queensland Casinos performed well during the surveyed period, with The Star Gold Coast picking up 30% on its pre-COVID levels, the Treasury Brisbane notching up a 9% gain on its pre-COVID levels, and not least, The Star Sydney posting a 13.5% increase on its pre-COVID levels.

Despite these positive outcomes for the Queensland properties, the Star confirmed that its overall Group-wide revenue was in fact 1% down on pre-COVID results. The Group went into further detail about how the Bell Review and other changes to the NSW Casino Control Act have had a negative impact on the company.

The Group saw an increase in the number of excluded patrons along with a reduction of benefits and services in private gaming areas, an otherwise strong source of revenue. The slump in performance impacted both the slots and table games sector. However, The Star Entertainment Group confirmed that it would seek to continue investing in improved compliance capabilities.

To this end, the Group reached out to third-party consultation agencies to ensure that its practices are aligned with the new regulatory standards. With this in mind, the expected underlying EBITDA for the company is expected to range between $195m and $205m in the first half of financial 2023.

The Group similarly provided an outlook for the full financial year which is due to end on June 30, 2023. Star Entertainment anticipates an underlying EBITDA of anything between $330m to $360m. Then again, the Group is cautious about any hard numbers as there are factors that can yet influence its performance.

Inbound regulatory changes could also have an impact on a range of the Group’s revenue streams. Among the factors, the Group expects to influence its end-year performance is international tourism, consumer discretionary spending behavior and private gaming areas.

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