Stars align for casino group as revenue surges ahead

STAR Entertainment has told investors revenue has risen in the second half on the back of growth in Queensland and its international high-roller business.

At an investor day presentation yesterday, the company said its normalised gross revenue was up 16.4 per cent for the period January 1 to May 23, compared with the same period a year earlier.

Investors did not respond positively to the news, sending Star stock down 3 per cent to close at $5.14.

It comes after the company, which runs casinos in Brisbane, Sydney and on the Gold Coast, booked a 77 per cent fall in first-half net profit to $33 million in February.

That result was impacted by an abnormally low win rate in its international VIP business of 1.06 per cent and one-off items related to a debt restructuring. The return of Chinese high rollers had helped volumes, the company said at the time.

In the trading update yesterday, Star said its international VIP rebate business, which offers luxury hospitality and cash rebates to high rollers, “continues to show strong growth”. Turnover had lifted 63.7 per cent to date compared with the same period a year ago, with the actual win rate below the theoretical win rate of 1.35 per cent.

The company said total domestic revenue was up 2.6 per cent for the second half to date. In March, Star Entertainment said it would pay a higher dividend as it announced two Hong Kong companies planned to take an equity stake in the company.

Chow Tai Fook Enterprises and Far East Consortium International would each invest $245 million each into the company.