The Star Entertainment Group Announces Trading Update For FY19

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In the Annual General Meeting held today, the Star Entertainment Group Limited (ASX: SGR) has provided the trading update for Fiscal 2019.

For the period starting from 1 July 2018 to 21 October 2018, Group’s domestic revenue has gone up by 6.7% on the prior comparable period. The management informed that company’s domestic business is showing good momentum with both Sydney and Queensland growing at similar levels while on international business front, group’s normalized revenue is said to be in line with the prior comparable period. The International VIP Rebate business of the company has witnessed a strong growth on the back of better than theoretical win rate in early FY19.  

The performance of Group’s intermediate Sovereign Room in Sydney has been the highlight on company’s domestic business front. Since the start of Fiscal 2019 the company has been  injecting more funds into the new and expanded product at The Star Gold Coast while the other capital investment programs are reported to be on track.

In Fiscal 2018, the company has achieved a record statutory gross revenue of $2.6 billion, presenting a growth of 6% on pcp. Normalised Gross Revenue was up 15% to a record $2.7 billion and Normalised EBITDA was up 14% to a record $588 million. But on the negative side, the statutory EBITDA of the group fell 19%, primarily due to low actual win rate of 1.16%. In FY17 theoretical rate was 1.35% and the comparable period win rate was 1.59%. Although Normalised NPAT was up 20% in Fiscal 2018, statutory NPAT of $148 million was down 44% on the comparable period, reflecting low actual win rate and one-off costs incurred during the year.

During this financial year 2019, operating expenses of the company are reported to grow well in line with the business volumes whereas in the previous year total operating expenditure surged up 7% due to increased domestic and international gaming volumes, new and upgraded facilities at The Star Gold Coast and higher wage rates.

Group’s earnings growth is reportedly on the top priority of the company for FY19. Meanwhile the other major priorities of the group include the enhancement in customer service and efficiency, delivering the next stage of company’s capital plans and expanding business opportunities with new partners, Chow Tai Fook and Far East Consortium.

In today’s trade the stock of The Star Entertainment was spotted in green. The share price of SGR has gone up by 1.688% to close at $4.820 on 1 November 2018. PE was 27.090 x with market capitalization of $4.35 billion. But in the past one year the stock price has fallen by 17.57%.


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