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Star Group says it was booming before virus shut its casinos

Business

Star Group’s net profit has dived 147 per cent to a loss of $95 million after its casinos in Brisbane, Sydney and the Gold Coast were shut down during the COVID-19 lock downs.

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But the company showed that before the pandemic hit, its business was thriving with its gross revenue up 7.6 per cent between July and February and its Queensland business was booming with  a 20 per cent growth in gross revenue and a 33 per cent boost to its earnings before interest and tax.

Chairman John O’Neill said the fundamental prospects for Star were unchanged despite the impact of the pandemic.

“Major projects at Queen’s Wharf Brisbane and The Star Gold Coast are proceeding to plan with an upgraded and expanded Sovereign at the Star, Sydney, delivered in time and budget,” O’Neill said.

He said the company produced a record “normalised” and domestic earnings for the pre-COVID months.

“This reflected growth from investments, operational improvement cost management benefits,” O’Neill said.

He said the Queensland operations had been “very strong” before COVID-19 and the  Gold Coast was delivering improved returns on assets with its earnings before interest and tax up 70 per cent before the shutdowns.

In the current financial year, domestic gaming revenues are about 80 per cent of the same time last year.

Managing director Matt Bekier said the Queen’s Wharf project had been derisked with a $1.6 billion debt funding package which was agreed on terms before COVID-19. About 75 per cent of the total project costs were now under lump sum terms.

“Comprehensive actions to mitigate the impact of COVID-19 were implemented, safeguarding staff and customers, securing additional funding and preserving cash,” he said.

“The Star’s business is fundamentally strong, evidenced by the step-up in earnings in growth (in the first half).

“The long-term value uplift from investments in our network of integrated resorts and continuing operational improvements to drive visitation and earnings remain substantial.”

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