Star Entertainment Group, a leading casino operator, released a market update highlighting its financial performance in Australia. Despite the impact of the COVID-19 pandemic, Star experienced a strong revenue recovery in the final quarter of the financial year. The company noted significant growth in slots and non-gaming revenue, as well as a notable rebound in domestic tourism.
However, the operator acknowledged the ongoing effects of property closures, operating restrictions, and border closures on its full-year results. Additionally, Star provided updates on regulatory reviews and the timeline for the completion of its Queen’s Wharf Brisbane Integrated Resort Development.
Revenue Performance:
Star reported a robust 11% increase in revenue in its native Australia during the final quarter of the financial year. Total revenue for the three months ending in June amounted to $512 million, surpassing pre-pandemic levels. The operator observed a substantial 28% rise in slots revenue and a 26% increase in non-gaming revenue. While domestic table revenue has not fully recovered, it reached 95% of pre-COVID levels.
Site Performance:
Star highlighted the strong performance of its Star Gold Coast property, which experienced a remarkable 48% surge in domestic revenue compared to pre-pandemic levels. This growth was attributed to the recovery in domestic tourism and the successful opening of The Dorsett Gold Coast Hotel and The Star Residences. Star’s Brisbane casino also achieved a noteworthy 13% increase in domestic revenue, while domestic revenue at Star Sydney returned to pre-COVID levels.
Challenges and Regulatory Reviews:
Despite the positive revenue recovery, Star acknowledged the adverse impact of property closures, operating restrictions, and border closures on its performance in the early part of 2022. The operator anticipates that these factors will be reflected in its full-year results. Star also mentioned the costs associated with regulatory reviews and its increased investment in regulatory and compliance functions, which will influence the upcoming financial report. An independent review of Star’s suitability to hold a casino license in Queensland is currently underway, with completion expected by the end of August.
July Performance and Queen’s Wharf Brisbane Development:
Star reported that trading in July exceeded pre-pandemic levels, with Star Sydney and its two Queensland locations experiencing strong performance. However, the company provided an update on its Queen’s Wharf Brisbane Integrated Resort Development, indicating that the opening would be delayed until the second half of 2023. The delay was attributed to pandemic-related challenges and higher-than-average rainfall in 2022. Total project costs are expected to be approximately 10% higher than the initial guidance of $2.6 billion due to escalating construction material costs, labor shortages, supply chain challenges, program delays, and the inclusion of capital equipment.
Star Entertainment Group demonstrated a strong revenue recovery in Australia during the final quarter of the financial year, surpassing pre-pandemic levels. The operator’s focus on slots and non-gaming revenue, coupled with the rebound in domestic tourism, contributed to this success. However, ongoing challenges related to COVID-19 restrictions and border closures continue to impact the company’s financial performance. Regulatory reviews and increased investment in compliance functions further influence the company’s financial results. Star remains optimistic about its July trading performance and continues to navigate the evolving landscape while providing updates on its Queen’s Wharf Brisbane Integrated Resort Development, which is now expected to open in the second half of 2023.