Uncertainty weighs on Star Entertainment shares
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More news: Shares in Star Entertainment Group are down 3.6% to 13.5 cents after the embattled casino operator reported a 15% drop in quarterly revenue.
Over the past 12 months its shares have plummeted more than 73%.
The company also warned that "material uncertainty" remains over the group’s ability to continue as a going concern, as it struggles to find new sources of funding.
Star Entertainment posts 15% revenue drop, continues to explore liquidity solutions
The news: Embattled casino operator Star Entertainment has reported a 15% drop in quarterly revenue and flagged that it is continuing to explore liquidity solutions amid ongoing financial challenges.
The numbers: Star posted Q2 revenue of $299 million, down 15% compared to the previous quarter. It also reported a quarterly EBITDA loss of $8 million, an improvement on its EBITDA loss of $18 million in the first quarter.
The context: The casino operator said the result reflected continued weakness in the group's operating performance due to an ongoing challenging consumer environment, the impact of mandatory carded play and cash limits in NSW, and costs associated with ongoing remediation activities.
Group revenue was also impacted by the closure of Star's Treasury Brisbane Casino and continued softness at The Star Sydney following the implementation of mandatory carded play and cash limits. The downturn was partially offset by revenue growth at The Star Gold Coast, the company said.
Star drew down a $100 million tranche of a new loan facility in early December, but says it is struggling to fulfil conditions necessary to draw down a second $100 million tranche. In particular, the group said its capacity to raise $150 million of subordinated debt is "limited in the short term in the absence of additional liquidity solutions".
What they said: "While discussions continue with respect to a range of different solutions, there is no certainty that any of these negotiations will result in one or more definitive arrangements that might materially increase the group's liquidity position," the company said.
"In the absence of one or more of those arrangements, there remains material uncertainty as to the group's ability to continue as a going concern."
The source: ASX announcement
