Operator News
Australia – The Star’s projects in Brisbane and NSW unaffected by lockdown closures
By Phil - 21 August 2020
Australian operator Star Entertainment Group pointed to ‘strong performance pre-COVID-19’ adding that the pandemic has not delayed its projects in Queensland and NSW despite casino revenue being impacted by the lockdown closures.
It reported a net loss of $94.6m for the 12 months ending June 30, a 147.8 per cent decline compared with the previous year.
Since reopening it has ‘focused on the safe and effective management of reopened properties’ and said it is now looking at ‘mitigating impacts from Sydney competition’ with positive early 1H FY2021 trading.’
It added that despite social distancing restrictions and reduced capacity, revenue in July had improved and was around 80 per cent of what was generated in July 2019.
Chairman John O’Neill AO said: “The Group continued executing its growth strategy despite an unprecedented environment. Whilst acknowledging the impacts of COVID19 have been extraordinarily challenging, the fundamental earnings prospects for The Star remain unchanged, underpinned by valuable long-term licences in sought after destinations. Major projects at Queen’s Wharf Brisbane and The Star Gold Coast are proceeding to plan, with the upgraded and expanded Sovereign at The Star Sydney delivered on time and budget. The Star delivered record normalised and domestic earnings for July 2019 to February 2020 on a pcp basis before the full impact of COVID-19. This reflected growth from investments, operational improvements and cost management benefits. The Star remains committed to maintaining a balance sheet that positions the Group for the post-COVID-19 recovery. As previously disclosed, the Board has not declared a final dividend for FY2020.”
Managing Director and Chief Executive Officer, Matt Bekier said: “Execution of our long-standing growth strategy continued to plan over FY2020. Initial response by our highest value domestic customers to the new Sovereign in Sydney since its July 2020 opening has been pleasing. Queen’s Wharf Brisbane was further derisked with completion of the $1.6 billion project debt funding package on terms agreed pre-COVID19, and ~75% of total project costs are now under lump sum terms. “Comprehensive actions to mitigate the impact of COVID19 were implemented, safeguarding staff and customers, securing additional funding, and preserving cash. Important milestones were achieved, with a long-term agreement on NSW gaming tax and casino EGM exclusivity to FY2041, and reaching a favourable conclusion on the Gold Coast second casino licence process. “The Star’s business is fundamentally strong, evidenced by the step up in earnings growth from 1H FY2020 into early 2H FY2020. The long-term value uplift from investments in our network of integrated resorts and continuing operational improvements to drive visitation and earnings remain substantial.”
