Australia’s Star Entertainment Group has seen its revenue grow 6.1% to AU$2.6 billion for the full year ended 30 June 2018, boosted by a strong recovery in VIP as the segment continues its resurgence nation-wide.
Star’s numbers are even more impressive when normalized, up 15.3%, with statutory figures negatively impacted by a low win rate.
VIP turnover grew 54.3% to AU$61.2 billion with normalized International VIP revenue up 51.8%. Most notably, Star has emerged as Australia’s biggest player in the VIP segment with The Star Sydney now the leading VIP integrated resort in the nation ahead of traditional rival Crown Melbourne, and The Star Gold Coast now sitting comfortably in third.
In Sydney, gross revenue grew 3.0% to AU$1.7 billion, up 17.5% when normalized, with normalized VIP gross revenue up 55% including a 56.7% increase in VIP turnover to AU$56.5 billion.
Normalized EBITDA at The Star Sydney increased 27.9% year-on-year to AU$410 million although real EBITDA declined 28.7%, impacted by the low win rate in FY2018.
In Queensland, revenue increased 12.9% to AU$843 million with normalized revenue up 10.5% to AU$820 million. International VIP turnover grew 40.9% to AU$8.7 billion including a 78.3% increase in the six months to 30 June 2018.
Normalized EBITDA declined 8.4% to AU$178 million.
“The group completed a further year delivering on our growth strategy,” said Chairman John O’Neill.
“Record normalized revenues and earnings for the company in FY2018 reflect ongoing operational improvements across the group and early performance benefits from new and upgraded assets at the Gold Coast and Sydney.
“The group announced an expanded strategic partnership with Chow Tai Fook Enterprises (CTF) and Far East Consortium (FEC) in March 2018, further enhancing the long-term value of The Star for all shareholders. This comprised a Strategic Alliance Agreement to further invest in The Star’s businesses, a Marketing Alliance which leverages CTF and FEC’s customer networks and welcoming CTF and FEC as shareholders via an equity placement that aligns our interests.
“With our partners CTF and FEC, we announced an enhanced Queen’s Wharf Integrated Resort in Brisbane with an approximately 25% increase in scope which is expected to support a favorable capital return. At the Gold Coast, we have made good progress on the first mixed-use joint venture tower and approvals for the masterplan for up to a further four towers across the property.”
Star Entertainment Group’s strong results mirror a similar recovery by Crown Resorts after both companies saw VIP revenue plummet in 2017 following the arrests of 19 Crown employees in mainland China for promotion of gambling in October 2016. Crown’s VIP turnover climbed 54.5% to AU$51.5 billion in FY18.
Star announced a dividend of AU$0.13 per share, a 53% increase on last year.
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