The Star Entertainment Group (SGR) announced a challenging H1 FY25, marked by a normalised revenue of $650 million and a normalised EBITDA loss of $26 million. The statutory net loss reached $302 million, including significant items of $166 million. Trading performance deteriorated due to mandatory carded play, cash limits at The Star Sydney, and casino operating reforms impacting market share, especially at The Star Gold Coast. Notably, revenue declined by 9% across the group in Q3 compared to Q2, with The Star Gold Coast experiencing a sharper 13% drop due to softer conditions and temporary closure caused by Tropical Cyclone Alfred.
Despite achieving $100 million in annualised cost savings, The Star’s liquidity remains a concern. As of April 11, 2025, available cash stood at $98 million. A strategic investment of $300 million via convertible notes and subordinated debt from Bally’s Corporation ($200 million) and Investment Holdings Pty Ltd ($100 million) aims to bolster finances. $100 million was received on April 9, 2025. Receipt of further proceeds is subject to shareholder approval, planned for late June 2025.
The sale of The Star Sydney Event Centre for $60 million provides additional capital, though approximately $58 million is held in escrow pending shareholder approval of the Bally’s investment. Covenant waivers have been secured with existing lenders until June 30, 2025. The company cites material uncertainty regarding its ability to continue as a going concern, emphasizing the importance of completing the strategic investment, accessing Event Centre sale proceeds, and finalizing the exit from the Destination Brisbane Consortium (DBC).
The Star is focused on revenue-generating initiatives to offset regulatory impacts, improve market share, and implement further cost reductions. The revised remediation plan is underway across all properties, addressing governance issues highlighted by the Bell Two Review.