Star Entertainment slumps on earnings downgrade
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More news: Shares in Star Entertainment fell nearly 7% to 46 cents each after the beleagured casino operator lowered its expectations for full-year earnings and revenue amid challenging trading conditions and higher remediation costs.
Star said revenue from premium gaming rooms continued to trend downwards in the June quarter despite improved main gaming floor revenue.
Shares in the company are now down more than 50% over the past 12 months.
Star flags lower earnings, revenue
The news: Casino operator Star Entertainment Group has lowered its expectations for full-year earnings and revenue amid challenging trading conditions and higher remediation costs.
The numbers: The company, which previously outlined lower revenue for its first nine months, now expects full-year revenue to be between $1.68 billion and $1.69 billion, while normalised group earnings are likely to be in the range of $165 million to $180 million.
Group revenue for the June quarter is expected to be 4.3% below the previous quarter and 3.3% lower from the year ago period.
The context: Star said the weaker performance reflects the challenging economic environment and cost of living pressures. It said revenue from premium gaming rooms has continued to trend downwards, although main gaming floor revenue has improved but not enough to offset the overall decline.
It also said monthly run-rate operating expenses remained high due to ongoing remediation activities.
The company also said it had appointed its chief financial officer Neale O'Connell as acting CEO as it continued its search for a new CEO. New chair Anne Ward had also assumed additional responsibilities, on an interim basis, since her appointment and would continue until a new CEO was found Both O'Connell and Ward would receive increased fees to reflect the additional duties.
The Star is facing a second inquiry into its suitability to operate casinos in NSW as well as other regulatory challenges in Queensland. It is also in the midst of selling non-core assets.
The source: ASX announcement
