VIPs in bad run a boost for Star

A REMARKABLE run of bad luck for international VIPs at The Star’s Queensland casinos boosted the group’s earnings in an otherwise disappointing year.

The Star Entertainment Group’s full-year profit fell 8.4 per cent to $223.7 million after a solid domestic performance was offset by an overall drop in international VIP spending.

The group said although it drew more VIPs through the doors, those who came did not stay as long or spend as much as in previous years.

VIP turnover crumbled from $61.2 billion in 2017-18 to $42.4 billion in 2018-19, thanks to the Sydney casino taking $20.8 billion less than the previous year.

The losses were offset slightly by a $2.04 billion increase in turnover at The Star’s Gold Coast and Brisbane casinos, which enjoyed a sharply higher house win rate than its NSW counterpart.

While the casino group’s winnings saw it retain 1.15 per cent of its $31.6 billion Sydney VIP turnover – well below the 1.35 per cent average house win rate – the house was far more likely to win in the Sunshine State, where it enjoyed a win rate of 2.06 per cent on the $10.73 billion turnover.

Revenue increased yearon-year across all measures at The Star’s Queensland properties, apart from hotel revenue, with occupancy dropping from 83 per cent in FY18 to 81 per cent in FY19, a reduction of $1 million.

Normalised earnings fell two per cent to $557 million, within the $560-600 million guidance range that prompted a 16 per cent share price fall when it was issued in June.

THE LOSSES WERE OFFSET SLIGHTLY BY A $2.04 BILLION INCREASE IN TURNOVER AT THE STAR’S GOLD COAST AND BRISBANE CASINOS

Overall, normalised revenue, which excludes the VIP win rate and other one-off items, fell 0.9 per cent to $2.16 billion.

Star cut its final dividend from 13 cents a year ago to 10 cents, fully franked.

The results revealed it had paid out $18.4 million in redundancy and restructuring costs following its June announcement it would cut up to 20 per cent of its salaried staff.

It revealed the cuts had saved about $40 million on an annualised basis, with a further $5 million in savings expected by the end of the current financial year.