The Star Entertainment Group (ASX:SGR) reported a challenging first half of FY25, culminating in a normalised EBITDA loss of $26 million and a statutory net loss of $302 million. Revenue plummeted to $650 million, a 25% decrease compared to the prior corresponding period, reflecting the impact of mandatory carded play and cash limits at The Star Sydney, as well as general loss of market share. The Star Gold Coast experienced a 13% revenue decline in Q3 alone, compounded by a five-day closure due to Tropical Cyclone Alfred. Trading conditions across the group have softened with Q3 revenue declining 9% from Q2.
To mitigate these challenges, The Star has secured $300 million in strategic investment from Bally’s Corporation and Investment Holdings, with $100 million already received. However, the remaining funds are contingent on shareholder approval, slated for a meeting in late June 2025. The company has also sold The Star Sydney Event Centre for $60 million, but access to approximately $58 million of those funds is currently restricted and held in escrow until shareholder approval of the Bally’s investment is secured. Covenant waivers have been secured with existing lenders through June 30, 2025.
The company has achieved $100 million in annualised cost savings and is actively pursuing additional cost-cutting measures. Revenue-generating initiatives are also underway to offset the effects of operating reforms. Despite these efforts, the group faces ‘material uncertainty’ regarding its ability to continue as a going concern, dependent on successful completion of the Bally’s investment, access to the Event Centre sale proceeds, and exiting the Destination Brisbane Consortium (DBC) joint venture. The Star continues to work on remediation plans across its properties, addressing governance issues and embedding close supervision principles following the Bell Two Review.
