The Star Entertainment Group Ltd (ASX: SGR) share price is up 8.2% in mid-afternoon trading after the casino business announced a change in its leadership.
The company has been through a tumultuous period, and there are plans for another figure to depart. Let's investigate.
Chair replaced
In a statement to the ASX today, Star Entertainment announced that Anne Ward had been appointed as the new chair of the company's board, effective immediately.
For an "interim period", David Foster – who had been the executive chair – will remain on the board of The Star and continue his executive responsibilities.
Foster will also remain as a director of relevant subsidiary company boards until they can be reconstituted by individuals holding necessary regulatory approvals.
The new chair will receive the directors' fees for performing the role, which was disclosed in The Star's most recent remuneration report.
The search for a new permanent group CEO commenced in March.
Recent volatility for the Star Entertainment share price
Less than two weeks ago, the company announced that Jessica Mellor, CEO of The Star Gold Coast, had tendered her resignation. She was, according to Star, "instrumental in developing The Star Gold Coast as an iconic Gold Coast tourism and entertainment precinct, including the development of the $2 billion masterplan" part of a JV consortium. Mellor decided it was time to "move on".
Star Entertainment has been facing public hearings and an inquiry into its casino operations. My colleague James Mickleboro recently noted that investors were "a touch nervous that the company could be found to be unsuitable to retain its NSW licence" as a result of this inquiry.
A recent company trading update was mixed. It reported that in the third quarter of FY24, net revenue was down 4.6% to $419.2 million, and normalised earnings before interest, tax, depreciation and amortisation (EBITDA) had dropped 11.5% to $37.9 million.
All Star properties had experienced lower revenue from premium gaming rooms (PGR), with The Star Sydney PGR revenue down 19.3% year over year.
There were some positives — the main gaming floor (MGF) revenue performance "continues to perform strongly at all properties", with MGF revenue up 5.4% at The Star Sydney, 4.6% higher at The Star Gold Coast and up 6.4% at Treasury Brisbane.
It reported normalised earnings before interest and tax (EBIT) grew from a loss of $6 million to a profit of $9.3 million, while the statutory net loss improved 86.4% to a loss of $6.8 million.
Star Entertainment share price snapshot
As we can see on the chart below, the Star Entertainment share price has fallen 21% this year. Shares are down 64% over the past year and down around 90% in the last five years.
