Troubled Star flags concerns with weak cash-flow update as NSW refuses any support

Star Entertainment has revealed plunging revenue amid doubts over its ability to stay afloat, after NSW Premier Chris Minns doubled down on his vow to not provide any more help.

Troubled casino group Star Entertainment has warned there is “material uncertainty” it can continue operating as it continues to haemorrhage cash.

Star told the ASX on Monday morning that revenue had plunged in the December quarter, exacerbating its cash crunch amid rising costs at its new $3.9bn Queen’s Wharf precinct in Brisbane, fines from regulators and tighter gambling controls.

Its available cash at the end of December was $78m. Star revealed earlier this month that it had burnt through more than $100m of its dwindling cash reserves in just three months.

Star said that given the reduction in the group’s available cash at the end of December and its “ongoing financial and liquidity challenges,” the board was continuing to seek external advice in respect of their duties, including safe harbour provisions.

“While discussions continue with respect to a range of different solutions, there is no certainty that any of these negotiations will … increase the group’s liquidity position,” the company said.

“In the absence of one or more of those arrangements, there remains material uncertainty as to the group’s ability to continue as a going concern.”

Revenue fell 15 per cent to $299m in the December quarter even as it narrowed its losses to $8m from $18m.

“The results for the period reflect continued weakness in the operating performance of the group due to the ongoing challenging consumer environment, the impact of mandatory carded play and cash limits in NSW, and costs associated with ongoing remediation activities,” the company says.

Operating expenses fell 18 per cent to $52m due to lower corporate costs, reduced activity and the closure of the Treasury Brisbane casino.

Star said it was working towards fulfilment of conditions needed before it could access the second $100m in a $200m financial package announced last year.

“A number of these conditions remain challenging to meet given the group’s current circumstances,” Star said.

In particular the group’s capacity to raise $150 million of subordinated debt was limited in the short term in the absence of additional liquidity solutions.

NSW Premier Chris Minns says he ‘doesn't have money for casinos’. Picture: NewsWire / John Appleyard

Revenue at Star Sydney declined by 6 per cent compared to the previous quarter, impacted by the implementation of mandatory carded play and cash limits which took effect across the broader casino on October 19. Since that date revenue declined a further 16 per cent compared to the 4 weeks daily average prior to August 19.

Revenue generated at its 50 per cent-owned Queen’s Wharf precinct was $121m with profit of $14m. This excluded certain centralised corporate costs at the precinct, which is jointly owned with Hong Kong-based Far East Consortium and Chow Tai Fook Enterprises.

Star’s warning comes as NSW Premier Chris Minns has doubled down on his vow not to provide any more help to beleaguered Star Entertainment but his counterpart in Queensland will consider all proposals. Star shares fell 6 per cent to 13 cents on Monday morning.

In a last-ditch plea on Friday, Star CEO Steve McCann called on the NSW and Queensland governments to throw the company a financial lifeline. He wants a temporary pause on the payment of gaming taxes to help protect jobs and tourism across the two states.

“We need time to reset the business,” he said on Friday.

Asked about Star’s latest request, Mr Minns on Sunday was adamant that there would be no eleventh-hour government-led rescue plan.

“I’ve said all I’m going to say about it,” he told reporters.

“We don’t have any (more assistance). We did sit down with Star over a year ago and work out a rescue package.

“As I said, we’ve got funding requests right across NSW, from roads to psychiatrists to nurses to the railways. I mean, I don’t have money for casinos, I’m sorry.”.

In Queensland, Premier David Crisafulli was leaving the door open.

“We will consider any requests that comes forward but I will reiterate what I said – we only have one focus and that is the jobs and the continuity of jobs regardless of who runs that facility (Queen’s Wharf),” he told reporters on ­Sunday.

“My support is for the workers and making sure that casino continues to operate. I am confident we can find a way to make that occur that represents a good deal for all Queenslanders.”

Qld Premier David Crisafulli says people care about the jobs at stake but not the future of the company. Picture: Lachie Millard

Mr Crisafulli said Star needed to go to its shareholders and work out a way to keep operating.

“Failing that it needs to talk to administrators, he said.

“I want Queenslanders to know we are not tipping money into the company. It is not our issue.

“I don’t reckon there are many Queenslanders that care about Star or its CEO or board but there are bucketloads that would care about the facility and people who work there.”

It comes as Star prepares to reveal more detail on its dwindling financial resources amid growing concern the troubled casino group faces imminent collapse.

That follows a disclosure to the market earlier this month that it was burning through cash at an unsustainable rate and may run out of money within months.

The quarterly report will detail revenue and earnings at its casinos in Brisbane, Gold Coast and Sydney as well as operating expenses.

Investment platform Moomoo chief commercial officer Michael McCarthy said the market would not be much interested in the figures, but rather any indication from management about the future direction of the company.

“People were shocked last time at how much cash they were burning thorough,” said Mr McCarthy. “It is becoming increasingly likely that it is not going to survive in its current form and radical surgery will be needed. It is surprising you can lose money running a casino in Australia.”

Star shares slumped to as low as 10c earlier this month after it warned that it had spent more than $100m of its cash reserves in just three months. The stock closed on Friday at 14c, down 26 per cent so far this year after analysts said the company now had an even chance of falling into ­administration.

Brokers have slapped “sell’ recommendations on the stock.

“We view the risk-reward payoff as unfavourable due to Star’s lack of near-term funding options, limited support from state bodies and the risk of further dilutive equity raises,” said Sean Conlan from Leyland Private Asset Management.

Mr McCann said he saw “a way forward” for the company but only with the assistance of stakeholders and government.

Star Entertainment Group chief executive Steve McCann has asked for more support and time to secure the company’s future.

“For Star to be able to complete the job – and when I say that I mean the job of the remediation and turning around the business – we need more time,” Mr McCann told The Australian on Friday. “It is achievable, but not without that time.

“We have been engaging with our key stakeholders and explained to our lenders what we think we need and to governments what we think we need.”

Moomoo’s Michael McCarthy said that despite Star’s dire finances, some big-name investors were still lifting their stakes in the company.

“They are betting that they will have some sort of seat at the table whatever happens, and let’s face it at 10c, you are not taking a huge risk,” he said.

“If someone comes in and offers 25c they are more than doubling their money.”

Macau-based businessman Wang Xingchun last week lifted his stake in Star to 6.52 per cent after buying 28 million shares on Monday for just over 11c each. He has spent more than $30m amassing more than 186.3 million shares since September 2024, making him the second-biggest shareholder behind pub billionaire Bruce Mathieson, who holds under 10 per cent.

Far East Consortium International and Chow Tai Fook Enterprises, the Hong Kong-based partners in its Queen’s Wharf precinct, both have 6.33 per cent.