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Trading conditions for embattled casino operator The Star Entertainment Group (ASX: SGR) continued to deteriorate in FY25 with the company reporting an 18 per cent fall in revenue to $351 million for the three months to the end of September.
The revenue slump has led to an EBITDA loss of $18 million for the period with Gold Coast and the now closed Treasury Casino in Brisbane the company’s only properties showing a positive underlying earnings performance for the period.
The group result is a sharp reversal from a year earlier when The Star delivered EBITDA of $62 million.
The Star Gold Coast posted EBITDA of $7 million in the latest quarter, aided by a seasonal lift in revenue of 6 per cent to $108 million compared to the previous three months. However, revenue is down 9 per cent compared to the same time last year, while EBITDA is 70 per cent lower.
The Star closed its Treasury Casino during the quarter as the group undertook a phased opening of the new Star Brisbane at Queen’s Wharf from 29 August this year.
The Star Brisbane tipped $4 million into the revenue pool for the period to deliver a $7 million EBITDA loss for its first month’s contribution.
However, The Star notes that its Destination Brisbane joint venture, in which it has a 50 per cent stake with Hong Kong partners, generated revenue of $45.9 million and EBITDA of $4.5 million from the managed integrated resort operations.
Brisbane Treasury, which was closed on 25 August, posted revenue of $53 million and EBITDA of $2 million, which compares with $89 million and $17 million respectively in the September quarter of last year.
The Star’s Sydney casino continues to suffer from a downward trend in revenue, which was further impacted by a $4.4 million hit due to system outages in July this year.
“The challenging consumer environment and changes in business practices have weighed heavily on gaming, particularly in the premium segment,” says the company.
The Star says that in the 50 days before mandatory carded play and cash limits were introduced on 19 August 2024, revenue was down 11 per cent compared to the FY24 average, and 6 per cent below the average in the June quarter of last year. Since 19 August, revenue has fallen a further 12 per cent.
“Electronic gaming machines have also faced significant pressure from competitive venues, evidenced through revenue losses and limiting market share recovery,” says the company.
September-quarter revenue at The Star Sydney fell 16 per cent year-on-year to $186 million, leading the group to post an EBITDA loss of $21 million – down from a $22 million profit a year earlier.
The Star had $149 million in cash at the end of September, which included the proceeds from the $60.5 million sale of Treasury Brisbane to Griffith University which plans to establish a new campus on the site.
“The Star continues to work with its lenders to finalise long-form documentation for the new debt facility which will provide up to $200 million in additional liquidity, subject to conditions precedent,” says the company.
Earlier this month, The Star was hit with an additional fine of $15 million by the NSW Independent Casino Commission following the handing down of the report from the second Bell inquiry held this year.
Shares in The Star were trading at 25c each at 10.34am (AEDT), down 1.5c but still off their recent low of 20.5c.
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