Star Entertainment Shares Rise After Full-Year Results

Star Entertainment's share price increases following the publication of its full-year results to the Australian Stock Exchange.

Shares in Star Entertainment are up more than 6.5% after the Australian casino and hotel giant revealed its latest full-year results. The increase comes despite a drop in revenue and Star not declaring a final dividend.

The COVID-19 pandemic hit the global gambling sector hard. Australian casinos burned through $14.2 million per day during the height of the pandemic due to enforced closures of properties. The virus continues to cause intermittent closures and capacity restrictions, both of which hurt operators’ bottom line.

Star Entertainment posted a $198 million profit in its 2019 full-year financial figures. Its 2020 full-year results showed Star made a $94.6 million loss. Star returned to profitability in 2021, posting a $58 million profit after tax.

Revenue fell 11% to $1.557 billion, which is to be expected with several enforced closures throughout the year. Sydney, which is Star’s flagship property, fared the worse in terms of revenue. Revenue at Star Sydney fell 30% to $832 million. Furthermore, revenue at Gold Coast slumped 28% to $382 million. Both those figures are from Star’s “normalised” full-year figures, a bizarre practice Australian casinos use in their financial reporting. Normalised figures remove the inherent win rate volatility of the International VIP business.

Brisbane recorded full-year revenue increases of 34% to $348 million. Amazingly, none of that revenue stemmed from the foreign VIP segment of customers. Indeed, group revenue from international VIPs plummeted 97% thanks to international border closures.

Chairman John O’Neill Explains Lack of Dividend from Full-Year Results

John O’Neill is the Star Entertainment Chairman. As such, O’Neill writes a segment in the company’s full-year financial report.

“The Group continued executing its strategy well in the context of the extraordinary COVID-19 related challenges. The fundamental earnings prospects for The Star’s domestic business remain attractive. They are underpinned by valuable long-term licences in compelling locations and the transformation of our properties into globally competitive entertainment destinations is nearing completion.

“The Star remains committed to maintaining a balance sheet that positions the Group for the post COVID-19 recovery. The Board has not declared a final dividend for full-year 2021 given the continuing impacts of COVID-19 on the business and, consistent with the June 2020 covenant waiver, cash dividends cannot be paid until gearing is below 2.5 times.”

COVID-19 continues playing havoc with Star’s properties, which will affect the 2022 full-year results. Queensland properties shut for four days from June 30, and again on July 31 for eight days. In addition, Star Sydney closed on June 25 and is yet to reopen due to local restrictions and guidelines.

Star CEO Thanks Guests and Staff While Counting $3 Million Salary

Managing Director and Chief Executive Officer, Matt Bekier, used part of his full-year results section to thank Star’s guests and staff.

“The experience last year demonstrated how resilient our business is and how quickly customers return when our properties are allowed to open. This gives us great confidence as vaccination levels increase and a return to normality approaches.

“We would like to thank all of our guests and staff who stayed with us through the difficult times last year and we look forward to welcoming them back soon.”

Bekier collected a $1,988,464 salary for the full-year of 2021, up from $1,330,226 in 2020. However, his total pay package was down slightly, yet he still pulled in $3,064,197 with performance-related payments included. Amazingly, one of Bekier’s performance-related bonus tasks was to “reopen properties safely and profitably” something entirely out of his control yet he, of course, received the weighting for this indicator.

Between Bekier, CFO Harry Theodore, CCO Greg Hawkins, and CCO (Qld) Geoff Hogg, Star’s executive directors, they pulled $6,712,971 between them. They did this despite Star temporarily laying off 90% of its workforce and taking advantage of government handouts.