SGR Shorts Position dropping, page-5

The Star Entertainment Group (ASX: SGR)

One liner: Revenue miss but normalised profit beat for FY23, underlying performance beginning to stabilise in FY24, statutory losses widen on impairments.

• Revenue of $1.87bn, up 23% but lower than consensus $1.91bn

• Normalised NPAT of $41.3m, up 224% and above consensus $23.5m

• Statutory net loss of $2.44bn vs. $202m loss a year ago

• Significant items of $2.82bn primarily include non-cash impairment of The Star Sydney, The Star Gold Coast and Treasury ($2.17bn), ongoing regulatory and legal costs ($595m), debt restructuring costs ($54m) and redundancy costs ($16m)

Group MD and CEO Robbie Cooke: "Remediation is our number one priority. We have commenced the uplift in our risk management, safer gambling and AML capability ... We are improving our financial crime management and our overall approach to harm minimisation. Our remediation program will track and hold us accountable to the multi-year program we are committed to delivering."

• “In terms of trading performance our statutory EBITDA for FY23 was $317 million, up 34% on the prior year, and slightly above the top end of the previously announced guidance range. Our statutory net loss was $2.4 billion. The resolution of the NSW casino duty proposed increase has removed significant uncertainty in relation to FY24 and beyond for our Sydney operation and has protected the jobs of thousands of NSW team members.”

YTD Trading Update (1 July to 22 August):

• Group: revenue (-20%) on pcp, +3% vs Q4

Outlook:

• FY24 capex $100-120m

• Adjudication claim from Multiplex served on Destination Queensland Consortium lodged by Multiplex with the Queensland Building and Construction Commission under the Building Industry Fairness (Security of Payment) Act 2017 (Qld). Claim is is separate to Supreme Court proceedings