Star Entertainment shares tumbles and receives first strike on pay report
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More news: Shares in Star Entertainment fell on the ASX after the casino operator warned of a continued downturn in revenue and inflated transformation costs.
Star shares were down 3.6% to 20.3 cents by 3pm, having initially jumped around 6% in early trading.
The casino operator also received a first strike on its remuneration report at its annual general meeting today as 56.94% of shareholders voted in favour of the resolution.
Star Entertainment flags deterioration in performance, negative cashflow
The news: Embattled casino operator Star Entertainment Group said, ahead of its annual general meeting today, that the company remains in an extremely challenging position as it incurs losses at the group earnings level.
The numbers: New chief executive Steve McCann said revenue has continued to decline significantly while costs of its transformation have continued at inflated levels. The group has seen continued deterioration in performance with losses incurred at group earnings level, he told shareholders.
Currently, the group is experiencing negative cashflow on a monthly basis, he added.
Star shares, which have lost more than 50% of their value over the past 12 months, were trading 5.95% higher at 22 cents each.
The context: Star last month reported a slide in first-quarter earnings, with revenue down 18% and an EBITDA loss of $18 million amid implementation of mandatory carded play and cash limits at its casinos.
It comes after a months-long inquiry found it breached compliance rules between September 2022 and July 2024, resulting in the suspension of the licence to independently operate its flagship Sydney casino and a $15 million pecuniary penalty.
What they said: “We need time to deliver the reset remediation plan and to develop our strategy before we can return the business to profitability — and for that we are asking for your ongoing support and for that of our lenders and other stakeholders,” McCann said.
The sources: ASX announcement, ASX announcement
