Perpetual Limited reduces stake in The Star Entertainment Group

Perpetual Limited has sold AU$26m (US$17.17m) worth of shares in the casino operator.

Australia.- The Star Entertainment Group has announced through a company filing that Perpetual Limited and its related bodies corporate have ceased to be a substantial shareholder of the company. The Motley Fool has reported that the equity manager sold AU$26m (US$17.17m) worth of shares.

The Star Entertainment Group shares fell further on Monday after the news. Shares are down nearly 60 per cent year-to-date.

The news comes after the New South Wales Independent Casino Commission (NICC) decided to extend the suspension of the Star’s casino licence in the state. It has also fined the casino operator AU$15m (US$10m). Meanwhile, Nicholas Weeks will remain in place as the NICC-appointed manager until at least March 31, 2025, when the regulator will reassess The Star’s suitability to regain its casino licence.

The NICC has also required the company to submit additional financial and operational reports between now and March 2025. It also proposed more prescriptive requirements on the constitution of the board of directors and key management personnel. 

The casino operator posted revenue of AU$351m (US$230.85m) for the first quarter of its financial year, down 18 per cent year-on-year and 11 per cent sequentially. Earnings before interest, taxes, depreciation and amortisation (EBITDA) was negative AU$18m (US$11.84m) compared to positive AU$23m (US$15.1m) in the previous quarter.

The company cited a “challenging operating environment and the continued implementation of mandatory carded play and cash limits.”

The Star Sydney revenue was AU$186m (US$122.23m), down 11 per cent sequentially and 16 per cent in year-on-year terms. EBITDA was negative AU$21m (US$13.8m) compared to positive AU$22m (US$14.47m) in the first quarter of the last financial year. The casino operator was affected by a AU$4.4m (US$2.9m) impact from system outages in July.

In the 50 days before the introduction of mandatory carded play and cash limits on August 19, revenue was down 11 per cent compared to the prior-year average. Since August 19, revenue declined a further 12 per cent. Electronic gaming machines have faced pressure from competitors.

The Star Gold Coast revenue was AU$108m (US$71m), down 9 per cent year-on-year but up 6 per cent compared to the previous quarter. EBITDA was positive at AU$7m (US$4.6m) but down 33 per cent from the previous quarter and down 70 per cent yearly.

Treasury Brisbane posted a revenue of AU$53m (US$38.86m), with EBITDA of AU$2m (US$1.32m). The venue closed on August 25. The Star Brisbane, which commenced operations on August 29, brought in AU$4m (US$2.63m), but EBITDA was negative AU$7m (US$4.6m).

The Star reported its available cash as of September 30 as AU$149m (US$98m), boosted by net proceeds of AU$60.4m (US$39.72m) from the sale of the Treasury Brisbane Casino building.

Perpetual Limited has sold AU$26m (US$17.17m) worth of shares in the casino operator. Australia.- The Star Entertainment Group has announced through a company filing that Perpetual Limited and its related…