The Star Entertainment Group Ltd (ASX: SGR) share price rose by 5% to $1 per share in early trading on Tuesday after the company released its FY23 full-year results.
The Star Entertainment share price opened at 98 cents, up 3.2% on yesterday's close.
The stock is currently trading for 97 cents, up 2.65%.
ASX investors appear relatively pleased with the numbers despite the company revealing a statutory net loss of $2.44 billion.
FY23 was a dreadful year for Star amid findings of seriously flawed governance and illegal activity at its venues.
Let's dig into the details of its FY23 report.
Star Entertainment share price goes green on mixed report
Here are the highlights of the report:
- Normalised gross revenue of 1,868 million, up 23% on the prior corresponding period (pcp) of FY22
- Normalised net profit after tax (NPAT) of $41 million, up 224% pcp
- Normalised earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $317 million, up 35% pcp
- Statutory net loss of $2.44 billion, down 1,103% pcp
- No final dividend
The normalised EBITDA was slightly above Star Entertainment's previously announced guidance range of $280 million to $310 million.
The statutory net loss included significant items totalling $2.48 billion net of tax.
Star Entertainment said demand at its venues began softening in 2H FY23 due to weaker consumer discretionary spending.
What else happened in FY23?
The Star Entertainment share price fell 55% over FY23 as the company was mired in controversy.
Multiple government enquiries into money laundering at Star's venues, along with many other operational issues, led to Star copping significant fines and being deemed unfit to hold a casino licence in both NSW and Queensland.
Following independent reviews in both states, the company is embarking on a major remediation program to regain suitability status as a licence holder.
Remediation is set to cost between $35 million to $45 million in FY24. This is in line with FY23 and will remain an annual cost at this same level until a foreshadowed halving in expenditure in FY26.
In February, the company announced an $800 million capital raise to repay or cancel debt.
At the end of FY23, Star announced the sale of the Sheraton Grand Mirage Resort on the Gold Coast to the Karedis and Laundy families for $192 million.
What did Star Entertainment management say?
CEO and managing director Robbie Cooke said FY23 was a "challenging year":
The consequences flowing from the damage to our social licence are felt daily by team members on multiple levels, reinforcing the critical need to understand the privilege and responsibility that comes with holding a casino licence.
As a team we are determined to earn back the trust and confidence of our community including our regulators, governments, shareholders, employees and guests.
We … are committed to transforming our leadership and culture. This journey has started and we know there is still a lot to be done.
What's next for Star Entertainment?
Cooke said remediation was the company's "number one priority" in FY24.
In terms of major projects, Star hopes to complete construction and commence the phased opening of its Queen's Wharf Brisbane venue, while construction of Tower 2 on the Gold Coast continues.
It also intends to start a formal market process for the sale of its Treasury Brisbane assets.
There was considerable new controversy recently when the NSW Government agreed to an exclusive deal to reduce proposed casino duties for The Star Casino to protect thousands of jobs.
Before the March NSW state election, the former Coalition government announced proposed increases in NSW casino duty rates that Star claimed "would significantly challenge the economic viability of The Star's Sydney business putting the jobs of thousands of NSW team members in jeopardy".
Following the new deal announced this month, Star Entertainment said:
Whilst resulting in an uplift in duty payable (FY24 estimated ~$10m), the arrangements help create a sustainable path forward compared to the original proposal.
Star Entertainment share price snapshot
In 2023 to date, the Star Entertainment share price has plummeted 42%.
By comparison, the S&P/ASX 200 Index (ASX: XJO) has risen 3.5%.
