Australia-listed Star Entertainment Group says strong earnings growth continued in its full year 2016, with good revenue growth across all lines of business.
In a filing to the Australian Stock Exchange on Friday, the casino operator reported normalized net profit after tax of A$241.3 million ($183.9 million), up 23.4 percent, and normalized EBITDA of A$556 million, up 14.1 percent.
The operator’s Sydney and Queensland casino revenues were the key drivers of the full year 2016, with group domestic revenues up 5.8 percent year-on-year. International VIP rebate business volume also went up by 7 percent year-on-year, along with an improved win rate in fiscal year 16H2 of 1.5 percent.
Star Entertainment managing director and CEO Matt Bekier said: “The continued improvement in The Star Sydney’s results validates the Group’s strategy of investing in its properties, with continuing focus on our brand, loyalty program, guest satisfaction and staff engagement delivering a differentiated value proposition to our 11 million customers.”
The results were hampered slightly by an increase in operating expenses, up 7.4 percent to A$619 million as a result of increased domestic volumes and investments in loyalty and marketing.
A final dividend of 7.5 cents per share will be paid, taking full year dividends to 13.0 cents per share, up 18 percent on FY2015.
Bekier said priorities for the 2017 fiscal year will be focused on enhancing long-term growth and shareholder value. These include a new 1,000 room hotel and residential tower at The Star Sydney with the hotel set to be operated by The Ritz-Carlton, and 1,400 rooms at a new hotel and residential tower at the Gold Coast, taking proposed current and planned investment up to $845 million, with potential for further long term growth through a precinct master plan.
The operator also says detailed planning is progressing at its Queen’s Wharf Brisbane development, with an expected budget of A$3 billion. The development will include 1,100 premium hotel rooms, over 50 food and beverage offerings and signature gaming facilities.
Trading levels in early FY2017 are exhibiting satisfactory growth on the prior period. Gross revenue, excluding International VIP Rebate business is up 4.1 percent from 1 July 2016 to 20 August 2016, in line with management’s expectations.
Capital expenditure for FY2017 is expected to be in the range of $375 million to $425 million, excluding an expected $120 million in equity contributions to DBC in relation to the Queen’s Wharf development. The majority of growth and maintenance activities for FY2017 will relate to the execution of expansion plans at The Star Sydney and the Gold Coast.