Star Entertainment Group Warns of $30M Redevelopment Costs in 2023 – IAG

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Australia’s Star Entertainment Group expects to cost between A$35 million and $45 million ($23 million to $30 million) in FY23 as part of its redevelopment efforts in New South Wales and Queensland.

The details were part of a trading update provided to shareholders during the company’s annual meeting on Tuesday, where newly appointed managing director and CEO Robert Cooke addressed investors for the first time.

Cooke took over the role last month following the departure of his predecessor Matt Bekier amid regulatory investigations into Star’s operations. Star was later found unfit to retain his NSW and Queensland licenses, with The Star Sydney currently operating under the supervision of a Special Manager.

According to Cooke, Star’s work to restore fitness will cost between A$35m and A$45m in FY23, plus recurring costs which add up to around 50% of that amount each year.

However, he revealed that the group’s domestic core revenues for the period July 1 to November 15, 2022 were 1% higher than the corresponding period before COVID. This included a 32% rise in The Star Gold Coast and a 9% rise in Treasury Brisbane – partially offset by an 11% decline in The Star Sydney.

“Our Queensland casinos are performing strongly, while Sydney has been impacted by post-Bell Review compliance changes and some competitive impacts,” Cooke said.

He also vowed to focus his efforts on Star’s recovery efforts.

“We will change our culture, be more transparent, have more robust governance, have more accountability, be open and honest with our regulators and act quickly when problems arise,” he said. “We need to win back the trust of all our stakeholders.

“From an operational perspective, I would like to assure you that the entire team understands and recognizes the need for change. Cultural change is part of it.

“So does our focus on ensuring that all areas of our business operate with the highest level of integrity. As CEO, I want our regulators and the governments we work with to see us as operators of the highest standing.”

At Tuesday’s AGM, shareholders approved the appointment of new board members Michael Issenberg and Anne Ward, but delivered a first blow at the directors’ remuneration scheme, with more than 25% voting against the proposal. A second strike next year could result in the new-look panel being spilled.

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