The Star Entertainment Group has finally reported its first half of the 2025 financial results, period ending 31 December 2024, declaring a 25% decrease in overall net revenue year over year and a statutory NPAT loss of almost $302m.
The Star’s EBITDA was also down when compared to the same period in 2024. However, the operator has a reason to be optimistic, after securing a binding term sheet for a strategic investment from Bally’s Corporation and Investment Holdings that has an aggregate principal value of AUD $300m (approximately USD $190m).
The operator also provided a trading update for the year to date, reporting “soft trading conditions” in Q3 as group revenue declined to $271m compared to $299m in the previous quarter, while group EBITDA decreased to a $21m loss (Q2: $8m loss) as the revenue drop outweighed the reduced corporate costs.
H1 net revenue decline
Publishing its H1 FY25 results, The Star reported normalised net revenue of $649.6m, down 25% YoY (H1 FY24: $865.7m).
The operator noted that the decline was due to “continued challenging trading conditions”, which resulted in a drop in domestic gaming revenue, impacted by market share loss and casino industry reforms, including mandatory carded play and cash limits at The Star Sydney.
Figures were also impacted by the closure of the Treasury Brisbane Casino, which took place on 25 August 2024, and the commencement of trading at The Star Brisbane from 29 August 2024.
Domestic gaming revenue fell by 32.1% YoY to $464m (2024: $683.3m), while non-gaming and other revenue rose slightly by 1.8% to $185.6m (2024: $182.4m). Excluding Treasury Brisbane Casino’s closure, gaming revenue was down 20% while non-gaming revenue fell by 2%.
The operator’s EBITDA for the period came in at a $26.4m loss (2024: $113.6m profit) as it was impacted “continued negative operating leverage from declining revenue, while operating expenses remained elevated albeit partially offset by The Star’s $100 million cost-out program”.
Net profit after tax (NPAT) was a $135.7m loss, down from a $25m profit during the same period the previous year. Statutory NPAT was a $301.9m loss (2024: $9.1m profit).
Per venue, The Star Sydney revenue fell by 19.5% YoY to $362.2m (2024: $450m), The Star Gold Coast revenue declined by 8.4% to $218.2m (2024: $238.1m), Treasury Brisbane revenue dropped by 69.1% to $54.8m (2024: $177.6m), while The Star Brisbane operator fee revenue was $14.4m via the Destination Brisbane Consortium (DBC).
Liquidity
The Star also provided an update on its liquidity, noting that as of 11 April 2025, it has $98m in available cash.
On 7 April, the group entered a binding term sheet with Bally’s and a binding commitment letter with Investment Holdings for a strategic investment valued at $300m via convertible notes and subordinated debt. Bally’s will invest $200m, while Investment Holdings will invest $100m.
While The Star received $100m on 9 April, the receipt of further proceeds is subject to approval from the group’s shareholders, which is expected to be addressed in a shareholder meeting in late June.
On 8 April, The Star completed a $60m sale of The Star Sydney Event Centre and associated spaces, with proceeds of approximately $58m being held in escrow as part of the New South Wales Independent Casino Commission’s (NICC) consent. This will be released once the strategic investment from Bally’s receives shareholder approval. Otherwise, these funds can be accessed subject to the agreement with the NICC.
The Star added that covenant waivers through to and including 30 June 2025 have been secured with its existing lenders. However, there “remains material uncertainty” regarding its ability to continue as a going concern.
Key near-term initiatives highlighted that will impact the group’s liquidity include the Bally’s and Investment Holdings strategic investment, access to the Event Centre sale proceeds, and completing the transaction to exit the DBC with its joint venture partners – Chow Tai Fook Enterprises Limited and Far East Consortium International Limited.
Regarding the DBC exit, including Gold Coast consolidation, The Star noted that long-form documentation execution is currently being targeted for the end of April, while the transaction’s completion is expected to be at the end of June.
For the Bally’s and Investment Holdings strategic investment, long-form documentation is being targeted for next week, with a shareholder meeting scheduled for late June.
Other initiatives being targeted to improve performance and liquidity include revenue-generating initiatives to offset the impacts of mandatory carded play and cash limits; customer-focused enhancements to improve market share and revenue; and embedding the $100m cost-out program and identifying further additional cost-out areas.
The Star also continues to deliver its revised remediation plan across its locations, following approval in October last year by the Office of Liquor and Gaming Regulation, with updates in response to the Bell Two Review.
Trading update
As previously mentioned, The Star reported a decline in Q3 revenue and EBITDA due to “soft trading conditions” as well as adverse weather conditions in Queensland, causing property closures in March.
The Star Gold Coast’s Q3 revenue decreased by 13% to $96m (Q2: $111m), while The Star Sydney’s Q3 revenue declined by 8% to $161m (Q2: $176m), reflecting a “seasonal softening in revenue”.
As for The Star Brisbane, the group will receive a $5m fixed operator fee per month from March 2025 until the end of the transition period, with the fee rising to $6m from July 2026 onwards.
