The Star Entertainment Group (ASX: SGR) has blamed a 'material deterioration' of its trading performance on mandatory carded play and cash limits at The Star Sydney, making it one of several factors that contributed to a statutory net loss of $471.5 million for FY25.
The group also attributes implementation of its remediation program and loss of market share to the lower performance, which was also weighed down by the closure of the Treasury Brisbane Casino building which was sold for $60 million - a sum that has been reserved for The Star's lenders.
Brisbane activities were transitioned to the new casino that forms part of the Destination Brisbane Consortium (DBC), where The Star is in the process of exiting its joint venture partnership through a revived deal that would see it take full control of Gold Coast assets currently forming part of another joint venture.
The total loss is also brought down by significant items after tax of $212 million including the impairment of its investment in DBC, other costs associated with the exit from the Brisbane casino, funding and redundancy costs, as well as regulatory matters and fines.
The group anticipates an AUSTRAC penalty to be handed down anytime from September 2025 onwards.
More positive developments highlighted in today's yearly results announcement include the achievement of $100 million in annualised cost savings, the selling of non-core assets such as the Treasury Brisbane Casino building and The Star Sydney Event Centre, also for $60 million, and the $300 million investment from new US shareholder Bally's.
The Star is also upbeat about obtaining a 24-month deferral from the NSW Government for the reduction of daily cash limits from $5,000 to $1,000 across all NSW casinos - a breakthrough that led to a 30 per cent lift in the share price over the course of a week from 5 August.
The statutory loss is still a significant improvement on the almost $1.7 billion loss recorded in FY24, but EBITDA has gone into the red from $175 million to an EBITDA loss of $77 million.
Group revenue was down 29 per cent at $1.19 billion, although gaming revenue was down 22 per cent when excluding for the Brisbane Treasury Casino closure.
At the end of June The Star had available cash of $234 million.
"I want to acknowledge the hard work and commitment of our team members in the face of the ongoing challenges of the group," says The Star group CEO and managing director, Steve McCann.
"While there remains work to be done, I note the significant progress that the group has made on its remediation journey to date and the implementation of regulatory reforms."
McCann says today's announcement highlights "a number of key interdependencies that are critical to the group’s future", including arrangements with lenders and guarantees that underpin its exit from Brisbane and ability to secure control of Gold Coast hotels adjacent to The Star, as well as uncertainties around the AUSTRAC judgment and The Star's ability to restore its casino licences.
"The group continues to require significant support from a range of its stakeholders including governments, regulators, lenders and investors," he says.
"Without that support it will be difficult to navigate the various challenges facing the group and to create a sustainable future for the business
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