Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. Investors will soon learn what the casino company has decided to do once it announces its plan in the next few days. It seems there is a lot of work operationally and financially to do for the company to continue operating. Despite today's boost, the Star Excalibur Hotel Casino live betting site share price is still down a painful 76% from this time last year. 3 of those analysts submitted the estimates of revenue or earnings used as inputs to our report.
But the collapse in revenue suggests the casino operator’s business model was inherently reliant on money-laundering. Strip that out, and what remains is a business that will likely not survive without a white knight. Its shares rallied (13.6%) after the casino operator confirmed it had received bids to buy out its stake in Brisbane's Queen's Wharf development, as it warned of "material uncertainty" about its future prospects. The collapse in earnings since fiscal 2024 has indicated Star might not have sufficient liquidity to stay afloat amidst near-term earnings headwinds, the AUSTRAC fine and equity contributions to redevelopment.
Morningstar analyst Angus Hewitt considers a 50% chance that the company falls into administration and lowers his valuation by 60% to $0.20 whilst our going concern valuation is $0.40 per share. Unfortunately, the inquiry is not off to a great start for Star shareholders, putting pressure on Star Shares. The Star Entertainment share price is now down 24.64% over four trading sessions, as depicted in the chart below. Shares in Star have rallied, however, after the Australian casino handbook operator confirmed it had received bids to buy out its stake in Brisbane's Queen's Wharf development, as it warned of "material uncertainty" about its future prospects.
Buying time ahead of an expected equity raise in fiscal 2025, the company raised $200 million in emergency debt facilities at a sharp 13.5% per year. Star’s balance sheet is in precarious condition after their 8th Jan update. Elevated remediation costs in fiscal 2023, poor performance and JeetCity jackpot slots fines increased led to two dilutive capital raises in 2023 at $1.20 and $0.60 per share. In our view, the NSW government’s issue of the second QLD casino high payout slots license in Sydney stemmed from underinvestment and underperformance in The Star Sydney, depriving the state of taxation revenue. Star spent ~$500 million improving its Sydney facilities ahead of Crown Sydney’s opening however it was too little too late. We estimate that 30% of table revenue will be conceded to Crown Sydney within three years of the competitor’s operation. Fears circulate for Star after recent spending suggests the operator would be lucky to survive till their interim results expected late February.
The distressed Star Entertainment will pay up to $10 million to a US hedge fund for a debt facility that was never used, or signed-off on. It notes that the top high limit online casino Australia end of this range is based on the implementation of NSW casino duty rate increases as proposed by the NSW Government, whereas the low end of the range assumes no change in NSW casino duty rates. In light of this, Star expects to report underlying EBITDA of $195 million to $205 million during the first half. Though, it is worth noting that this excludes provisions for fines and one-off legal costs which will be treated as significant items. But with declining financials, it is becoming difficult for Bellagio hotel cost breakdown Star to meet the conditions to unlock any of these potential funds. According to separate reporting from The Aus, Star also needs to secure another $1.6 billion to refinance its Queen's Wharf facility in Brisbane.
Investors digest news of insider selling at the ASX 200 defence company. Most importantly, the regulator will decide whether Star is suitable to hold a casino license in NSW at the end of the hearing. The academic services and utilities sectors have been in solid demand, while Ansell's strong result has led healthcare higher. "(I want) an A3-(sized) piece of paper of 'Who's Who In The Zoo', what committee they had, reporting lines with senior management … where people fit in and what responsibilities you say they have." A 2% miss on the market's consensus call on Car Group's first half profit has been punished by investors.