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Gambling and hotels giant The Star Entertainment Group (ASX: SGR) has set aside $13 million to repay staff wages owed following a review of salaries as the company announces it will report a loss for 1H22.
The Brisbane-headquartered company says following a six-year retrospective wage review of salaried team members it found some were not ‘better off overall’ when comparing their salary to modern award rates.
Over the period, The Star said the number of team members on annualised salaries underpinned by an award was approximately 2,200 and it will take a provision of approximately $13 million in its 1H22 accounts for the expected cost of remediation.
“We apologise to any team member impacted by the payment shortfall and we are committed to doing the right thing by acting transparently,” The Star CEO and managing director Matt Bekier said.
“Our priority is to address this issue and to ensure that it does not happen again.”
The company also announced it is expecting to record a statutory net loss of between $73 million to $75 million for 1H22, representing the impact of COVID-19 on tourism and the ability for its casinos to operate.
By comparison, the company reported a net profit after tax of $63.2 million during the prior corresponding period.
The Star says 1H22 earnings were materially impacted by COVID-19 related property shutdowns, operating restrictions and border closures.
The Star Sydney, which was closed from the start of the half to 11 October 2021, is showing some green shoots however, with revenue up 29 per cent since reopening.
Subject to completion of the external audit and the finalisation of financial statements, the company expects to report normalised EBITDA of $28 million to $30 million in the half - a far cry from the $225.7 million recorded in 1H21.
By way of an update on the second half, The Star mentioned the prevalence of Omicron did impact trading results in December and January, with a peak in mid-January.
“This impact has subsequently eased and trading continues to progressively improve,” The Star said.
Shares in SGR are down 1.13 per cent to $3.51 per share at 10.44am AEDT.
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