Brokers are assessing Star Entertainment Group’s future earnings prospects and see two wildly divergent extremes.
They include: competition with cross-harbour rival Crown Sydney and any regulatory changes; the cost of hiring governance teams and slashing business units to bring the company within the law; and the opening of Queen’s wharf Brisbane, replacing Treasury Brisbane.Star’s stock is wallowing around $1.44 a share, with the latest slump from the $1.73 level on February 10 driven by Star flagging a $1.26 billion loss ahead of its interim results. Before that, the stock was de-rated from its $2.
Last week, Star elevated David Foster to chairman, completing a clean out of the board a year after the damning Bell Review into Star’s sprawling Sydney casino kicked off. The company’s chief executive, Robbie Cooke, said that was due to competition from Crown Sydney, excluding gamblers at risk of money laundering, and not providing complimentary alcohol in private gaming rooms.“We continue to see The Star Sydney earnings re-basing with effectively only four months impact from regulatory change and Crown Sydney competition within the 1H FY23 result,” Macquarie says.
In addition to the AUSTRAC fines, Star also faces a compensation bill if the Victorian Supreme Court sides with sour shareholders, who have lobbed four separate class actions alleging Star misled the market about its compliance with anti-money laundering and counter-terrorism financing obligations.