ANNUAL REPORT 2018
THE STAR
ENTERTAINMENT
GROUP
THE 2018 FINANCIAL YEAR SAW SEVERAL
LANDMARK MILESTONES ACHIEVED, PROVIDING
TANGIBLE ILLUSTRATIONS OF PROGRESS AS THE
STAR ENTERTAINMENT GROUP CONTINUES TO
FOCUS ON EXECUTING OUR STRATEGIC AGENDA,
IN PURSUIT OF OUR VISION TO BE AUSTRALIA’S
LEADING INTEGRATED RESORT COMPANY.
02
02 OUR VISION
03 EVOLUTION THROUGH TRANSFORMATION
04 OUR HIGHLIGHTS
06
06 MESSAGES
06 CHAIRMAN
08 CEO
10
10 BOARD AND EXECUTIVE
10 BOARD OF DIRECTORS
12 EXECUTIVE TEAM
14
14 GROUP PERFORMANCE
16
16 KEY PROJECTS
16 QUEEN’S WHARF BRISBANE
18 THE STAR GOLD COAST
20 THE STAR SYDNEY
22
22 SUSTAINABILITY
22 SUSTAINABILITY STRATEGY
23 SUSTAINABILITY HIGHLIGHTS
24 DELIVERING WORLD CLASS PROPERTIES
32 LEADING COMPANY
40 GUEST WELLBEING
42 TALENTED TEAMS
46
46 DIRECTORS', REMUNERATION AND FINANCIAL REPORT
47 DIRECTORS' REPORT
62 REMUNERATION REPORT
83 FINANCIAL REPORT
141
141 SHAREHOLDER INFORMATION
144 CORPORATE GOVERNANCE STATEMENT DETAILS
144 ANNUAL GENERAL MEETING DETAILS
145 COMPANY DIRECTORY
145 KEY DATES
Cover: The Star Gold Coast with artist impression of completed Dorsett hotel and
apartments tower. ©Destination Gold Coast Consortium. All rights reserved.
THE STAR ENTERTAINMENT GROUP This page: The Star Gold Coast following the opening of The Darling hotel.
ANNUAL REPORT 2018 02
OUR
VISION
TO BE AUSTRALIA’S LEADING INTEGRATED RESORT COMPANY BY FULLY
HARNESSING OUR UNIQUE OPPORTUNITIES IN EACH PROPERTY,
TO PROVIDE THE MOST THRILLING GUEST EXPERIENCES IN WAYS
THAT TRULY REFLECT THE UNIQUE CHARACTER OF OUR CITIES.
© Destination Gold Coast Consortium. All rights reserved. Artist impression only. Subject to planning approvals.
PILLARS
THRILLING
EXPERIENCES
PRIORITIES
VALUES
SHAREHOLDER VALUE
OWNERSHIP
SERVICE
COMMITMENTS
ACCESSIBLE LUXURY
WORLD CLASS
PROPERTIES
LOCAL SPIRIT
LEADERSHIP IN LOYALTY
TRUE TEAMWORK
WELCOMING
CITY PRIDE
EXCELLENCE IN
GUEST SERVICE
TALENTED TEAMS
EXCELLENCE IN GUEST SERVICES
LIVE IT
Be Human
BRING IT
Be Your Best Self
OWN IT
Be a Star Player
DELIVER IT
Be the Perfect Host
THE STAR ENTERTAINMENT GROUP OUR VISION
03
WORLD CLASS PROPERTIES
EVOLUTION THROUGH
TRANSFORMATION
THROUGHOUT THE 2018 FINANCIAL YEAR, THE STAR ENTERTAINMENT GROUP CONTINUED TO TAKE
STRIDES TOWARDS ACHIEVING ITS VISION.
• The Star Gold Coast proudly opened a luxury suite hotel ‘The Darling’ prior to the commencement of the Gold Coast 2018 Commonwealth Games
• Approvals were received for a 53-storey tower housing the Dorsett hotel and The Star Residences
• The Queen’s Wharf Brisbane development moved into the excavation phase, with the riverfront space expected to open to the public in calendar year 2019
• Development application lodged for proposed hotel and residences tower at The Star Sydney including The Ritz-Carlton brand.
PROPERTY INVESTMENTS PIPELINE*
$3.6BN
REDEVELOPMENT OF
QUEEN’S WHARF BRISBANE
~$1BN
INVESTMENT IN THE STAR
GOLD COAST (WITH POTENTIAL FOR
ADDITIONAL TOURISM INVESTMENT)
NOW
UP
TO$1BN
POTENTIAL INVESTMENT
AT THE STAR SYDNEY
(SUBJECT TO ALL APPROVALS)
7
HOTELS
Including 1,600 rooms across Sydney,
Brisbane and Gold Coast
~60
RESTAURANTS & BARS
Including award winning and hatted restaurants
in Sydney, Gold Coast and Brisbane
HOTEL
BRANDS
Including The Darling,
The Star Grand, Sheraton Grand Mirage,
Treasury Brisbane
FUTURE
~12
HOTELS
Including more than 3,200 rooms across Sydney,
Brisbane and the Gold Coast
*Investments include contributions from joint venture partners
~130
RESTAURANTS & BARS
Featuring additional signature venues
and celebrity chefs
HOTEL
BRANDS
Including Rosewood, Dorsett, The Ritz‑Carlton,
The Darling, The Star Grand,
Sheraton Grand Mirage
ANNUAL REPORT 2018 04
THE STAR ENTERTAINMENT GROUP
OUR
HIGHLIGHTS
AWARDS
Destination Gold Coast Consortium. All rights reserved. Artist impression only of proposed masterplan towers. Subject to planning approvals.
WINNER
THE STAR SYDNEY
AHA National Awards for
Excellence 2017
Best Environmental and
Energy Efficiency Practice
5 STAR RATING
The Darling Sydney is the city's
only luxury hotel to receive the
prestigious Forbes Five‑Star rating.
The Darling has been awarded it two
years in a row (2017, 2018)
GOLD AWARD WINNER
The Darling Sydney
NSW Tourism Awards 2017
Luxury Accommodation
FINALIST
THE STAR
ENTERTAINMENT
GROUP
2018 Australian HR Awards
Employer of Choice
(>1,000 employees),
Best workplace diversity &
inclusion program
WINNER
THE STAR GRAND
Queensland Hotels Association 2017
Awards for Excellence
Best Deluxe Accommodation
AWARDED
RobecoSAM Sustainability Award
Gold Class 2018
(Dow Jones Sustainability Award)
05
81%
OF PRE-TAX PROFITS PAID TO
ALL LEVELS OF GOVERNMENT
$832M
ESTIMATED SPEND ON 4,300+
SUPPLIERS AUSTRALIA WIDE
#1
“GLOBAL LEADER”
CASINO AND GAMING
INDUSTRY (DOW JONES
SUSTAINABILITY INDEX)
$12M+
CONTRIBUTION TO CHARITIES,
COMMUNITY GROUPS AND
PARTNERSHIPS
$2,580M
STATUTORY
GROSS REVENUE
($M)
20.5¢
FULL YEAR DIVIDEND
PER SHARE
(CENTS)
$258M
NORMALISED NPAT
($M)
$588M
NORMALISED EBITDA
($M)
2,432
2,580
2,358
16.0
13.0
20.5
241
258
588
556
515
214
FY16
FY17
FY18
FY16
FY17
FY18
FY16
FY17
FY18
FY16
FY17
FY18
TRUE TEAMWORK
BRONZE EMPLOYER
‘Pride in Diversity’
Australian Workplace Equality
Index for LGBTI Inclusion
MEMBER 2018-2019
MEMBER
Green Building Council
of Australia
The Star Entertainment Group
became a GBCA member in FY2018
and achieved a 5 Star Green Star
Interiors rating for its new Sydney
corporate office fitout
MEMBER
Dow Jones Sustainability Index 2018
CONSTITUENT
The Star Entertainment Group
remains a constituent of the
FTSE4Good Index
ANNUAL REPORT 2018 06
THE STAR ENTERTAINMENT GROUP
CHAIRMAN’S
MESSAGE
I AM PLEASED TO REPORT TO SHAREHOLDERS THAT FY2018 SAW THE STAR ENTERTAINMENT GROUP
COMPLETE A FURTHER YEAR DELIVERING ON OUR GROWTH STRATEGY, DELIVERING STRONG
FINANCIAL RESULTS AND DELIVERING AS A TRUSTED COMMUNITY PARTNER IN OUR ATTRACTIVE
LOCAL DESTINATIONS OF SYDNEY, THE GOLD COAST AND BRISBANE.
Our portfolio of tourism, entertainment and
gaming assets continues to expand at scale and
to a level of quality that positions us favourably
with any global competitor. This ensures we are
well placed to capitalise on opportunities within
the domestic market, and from the sustained
growth in international tourism.
In FY2018, the Destination Brisbane Consortium
continued to deliver project works to schedule
and, importantly, secured planning approvals that
support an enhanced Queen’s Wharf Brisbane
Integrated Resort with an approximately 25%
increase in scope, which is expected to support a
favourable capital return.
This growth strategy is supported by the
development of The Star’s strategic alliance
with our Hong Kong‑based partners, Chow Tai
Fook Enterprises (CTF) and Far East Consortium
(FEC) as announced in March 2018. The expanded
partnership with CTF and FEC not only further
underpins the company’s growth strategy, but
also enhances the long‑term value of The Star for
all shareholders.
The strategic alliance agreement provides for
further potential investment in the Group’s
business and a marketing alliance, which leverages
our partners’ customer networks. It also provided
for welcoming CTF and FEC as shareholders via
an equity placement, which aligns our collective
interests. We are pleased to have developed
such depth in the relationship with our partners
in the short period since forming the successful
joint venture ‑ Destination Brisbane Consortium,
bidding for the Queen’s Wharf Brisbane
development in 2014.
Also amongst the achievements in delivering
against the Group’s strategic priorities was the
unveiling of the new luxury suite hotel tower at The
Star Gold Coast – The Darling which, along with
the reinvigorated existing complex, was open for
the Gold Coast 2018 Commonwealth Games. The
Star was very proud to be the First Official Partner
of the Games, contributing to renewed positioning
of the Gold Coast on the global stage. We are
now looking forward to underlining The Star Gold
Coast’s standing as a global tourism destination
with construction commencing on the first hotel
and residential apartment tower on Broadbeach
Island with our joint venture partners.
The proposed investment by The Star and its
partners, CTF and FEC, across the Queen’s
Wharf Brisbane development and the first joint
venture tower at The Star Gold Coast totals
approximately $4 billion. As announced, the joint
venture is also proposing to invest approximately
$500 million to deliver The Ritz‑Carlton hotel and
residential tower development at The Star Sydney,
subject to approvals being procured.
Ongoing stable leadership from Managing Director
and Chief Executive Officer, Matt Bekier, and the
executive management team enabled delivery of
strong financial results for FY2018 ‑ record gross
revenues, record normalised earnings and record
normalised net profit after tax (NPAT) for the
Group. This was a high‑quality result with broad‑
based growth across the domestic business,
market share gains in key gaming segments and
improving momentum in earnings over the year.
Statutory NPAT for the Group was $148 million,
down 44% on the prior year. Statutory earnings
before interest, tax, depreciation and amortisation
(EBITDA) decreased 19.2% on last financial year to
$484 million. Statutory results were impacted by
a low actual win rate of 1.16% in the International
VIP Rebate business (as compared with 1.59%
in FY2017) and significant items, primarily from
the restructure of the US Private Placement
debt announced in FY2017 and Gold Coast
pre‑opening and launch expenses, which were in
line with previous disclosures.
CHAIRMAN’S MESSAGE
ANNUAL REPORT 2018
07
In normalised terms, at a win rate of 1.35%, the full
year normalised NPAT result was $258 million, up
20.3% on FY2017 and normalised EBITDA was up
14.2% to $588 million.
As a reflection of the positive earnings
momentum, and in line with the increased dividend
payout policy, the Board declared a final dividend
of 13 cents per share (fully franked), taking total
dividends for the year to a record 20.5 cents per
share (fully franked). This total dividend amount is
up 28% on FY2017 and reflects a payout ratio of
122% of statutory NPAT and 70% of normalised
NPAT. This record total dividend continues growth
in dividends returned to shareholders in the last
previous five years.
As in FY2017, the Group’s results were achieved
as transformational projects continued to be
carried out and effectively delivered across
the properties. The earnings momentum in our
existing business, continued operating efficiency
and efficient commercialising of investments
combined with long‑term tourism forecasts and
our drive to achieve the Group’s vision provide
confidence in the Group’s strategic priorities and
transformative projects underway.
© Destination Brisbane Consortium. All rights reserved. Artist impression only. Subject to planning approvals.
On behalf of the Board, I congratulate and thank
Matt Bekier and the management team on their
continued efforts and dedication to making The
Star Entertainment Group Australia’s leading
integrated resort company and returning value
to shareholders. Also, I would like to thank my
fellow directors for their ongoing commitment,
including Zlatko Todorcevski and Ben Heap who
were appointed during FY2018 and joined the
Board in May, bringing additional, complementary
experience and skills to the Board.
I look forward to welcoming shareholders to the
2018 Annual General Meeting at The Star, Gold
Coast, where construction work for our newest
hotel and residential apartment tower will be
well underway.
Thank you for your ongoing support for The
Star Entertainment Group and our vision to be
Australia’s leading integrated resort company.
RECORD
NORMALISED NPAT –
UP 20.3% TO
$258M
RECORD FULL
YEAR DIVIDEND –
UP 28% TO
20.5¢
John O’Neill AO
Chairman
08
CEO’S
MESSAGE
IN THE 2018 FINANCIAL YEAR, THE STAR ENTERTAINMENT GROUP DELIVERED
IMPORTANT MILESTONES IN ITS CONTINUED GROWTH AND EVOLUTION. ALIGNED
TO OUR VISION OF BECOMING AUSTRALIA’S LEADING INTEGRATED RESORT COMPANY,
WE CONTINUED EXECUTING ON TRANSFORMATION PROJECTS IN EACH ONE OF OUR
LOCATIONS. THIS WAS HIGHLIGHTED BY THE OPENING OF THE DARLING, OUR LUXURY
SUITE HOTEL AT THE GOLD COAST, WHICH WE DELIVERED ON TIME AND ON BUDGET.
The growth strategy we are executing allowed
us to deliver record statutory and normalised
gross revenue in FY2018 and further establishes
The Star as the leading International VIP Rebate
operator across Australia and New Zealand.
Gold Coast was a focus on several fronts
during FY2018. The Darling opened ahead of
the Gold Coast 2018 Commonwealth Games,
along with its rooftop restaurant and lounge,
Nineteen at The Star. Approvals were also
received to commence construction on a new
700‑key tower at The Star Gold Coast, which will
house Australia’s first Dorsett hotel and The Star
Residences. The project is a joint venture with
valued Hong Kong‑based partners Chow Tai
Fook Enterprises (CTF) and Far East Consortium
(FEC). Work commenced with a ground‑breaking
ceremony early in FY2019.
The project that heralded the formation of our
partnership with CTF and FEC – the $3.6 billion
Queen’s Wharf Brisbane development – also
continued to make progress, moving to excavation
stage. Further works started on riverside
enhancements that will open to the public during
calendar year 2019.
In Sydney, a development application for
The Ritz‑Carlton hotel tower and apartments
was lodged with the Department of Planning and
Environment. Other important enhancements to
our business strategy included developments in
our loyalty program capabilities, building talented
teams across all functions, and embedding a
culture of guest service excellence.
These qualities will maximise shareholder
value by ensuring The Star Entertainment
Group is elevated as a primary consideration
for an increased number of domestic and
international visitors.
OPERATING PERFORMANCE
The 2018 financial year returned strong financial
results and continued good progress in the
performance of our core business. It was a
high‑quality result achieved on the back of
broad‑based growth domestically, the solid
performance of new investments and impressive
International VIP Rebate numbers.
The highlights on the domestic front were slots,
Queensland tables and non‑gaming.
We achieved increased share in key gaming
segments including the International VIP Rebate
business where turnover was up 54% at more than
$61 billion. Normalised International VIP Rebate
gross revenue increased 52% to $827 million.
Statutory International VIP Rebate revenue
was up 11% despite a low actual win rate of
1.16% compared to the high win rate of 1.59% in
FY2017. Complementing this volume growth was
the outstanding performance of the credit risk
management and approval team.
The International VIP Rebate result reflects
the success of the diversification strategy we
embarked on more than two years ago, with
continued growth in non‑North Asian source
markets; market normalisation; the attraction of
new facilities; and investments in guest service.
This year’s Group financial results were also
achieved despite capex peaking during FY2018.
For the full year, normalised gross revenue across
the Group grew 15.3% to $2,695 million, with The
Star Sydney growing by 17.5% to $1,875 million
and the Queensland properties increasing 10.5%
to $820 million. Actual gross revenue increased
6.1% to $2,580 million, with The Star Sydney up
3.0% and the Queensland properties up 12.9%.
Domestic gaming revenues grew 2.4% to $1,582
million across the Group in the 2018 financial year.
Non‑gaming cash revenue of $287 million was up
15.5% for the year.
Operating expenses for FY2018 were up 6.9% due
to domestic and International VIP Rebate volume
growth, increased non‑gaming activity, new
and upgraded facilities at The Star Gold Coast
and higher wage rates, offset by continued cost
management. Statutory gaming taxes, levies and
commissions were up 22.7%, reflecting substantial
growth in International VIP Rebate volumes.
AWARDS
The Star Entertainment Group and its
properties continues to win acknowledgement
and recognition for the quality of our tourism
and workplace offerings, plus an enduring
commitment to service excellence.
The Darling Sydney received for the second
successive year a Forbes Five‑Star Rating.
The Darling is the only luxury hotel in NSW to be
accorded the ultimate Five‑Star accolade by
Forbes Travel Guide.
The Star Grand at the Gold Coast was also
awarded Best Deluxe Accommodation at the
Queensland Hotels Association awards. Other
achievements included The Star Entertainment
Group being a finalist in the Australian HR Awards
in the Employer of Choice and Best Workplace
Diversity and Inclusion Program categories;
and receiving Bronze Employer status from
the Australian Workplace Equality Index for its
LGBTI inclusion.
Pleasingly, The Star Entertainment Group also
retained its global leadership position for the
Casino and Gaming industry on the Dow Jones
Sustainability Index (DJSI) for the second
consecutive year.
THE STAR ENTERTAINMENT GROUP CEO’S MESSAGE
09
FJMT’s proposed design for The Ritz-Carlton hotel and residences tower at The Star Sydney (Concept image only, subject to all approvals).
RECORD
NORMALISED
GROSS REVENUE –
UP 15.3% TO
$2,695M
INTERNATIONAL
VIP REBATE
TURNOVER –
UP 54.3% TO
$61.2BN
TEAM AND COMMUNITY
The Star Entertainment Group is likely to
significantly grow its workforce due to the
transformation projects that are reimagining our
properties across Queensland and Sydney and
embedding them as genuine global destinations
for the finest tourism and entertainment offerings.
While we are growing, we remain focussed on
improving guest service excellence, training
and development for existing team members
and working with educational institutions to
ensure a pipeline of suitably qualified hospitality
employees as tourism accelerates. The Star
is proud to partner with TAFE NSW, TAFE
Queensland and the Macquarie Graduate School
of Management to deliver on these goals.
In FY2018, the value of contributions to
community groups, charitable organisations and
partnerships by The Star Entertainment Group’s
properties exceeded $12 million.
A highlight in FY2018 was our status as Official
Partner of the Gold Coast 2018 Commonwealth
Games. More broadly in Queensland, we provided
ongoing support to Surf Lifesaving Queensland
– an unbroken partnership since 1994 – Cancer
Council Queensland, Gold Coast Hospital, the
Currumbin Wildlife Hospital Foundation and
Ronald McDonald House South East Queensland.
The Star Sydney committed collective funding
of $1.5 million to Barnardos Australia, Taronga
Conservation Society Australia and Chris O’Brien
Lighthouse. The Star also provided seed funding
to assist City West Housing and other community
groups organise local events, while helping the
Chamber of Commerce re‑establish the Pyrmont
Growers Market.
CAPITAL EXPENDITURE
AND PRIORITIES
The Star Entertainment Group incurred capital
expenditure of $477 million, up $57 million on the
previous financial year. This growth was largely
related to the construction of The Darling suite
tower and the Main Gaming Floor expansion at
The Star Gold Coast property, and preparatory
works for the Sovereign Resorts expansion at
The Star Sydney. Group capital expenditure will
decline from FY2018 levels through FY2019‑21.
The Star Entertainment Group has the following
objectives for the 2019 financial year.
• Improve earnings across the Group through
ongoing operating efficiency, continued
diversification of the International VIP Rebate
business and monetising capital investments
• Deliver the next stage of capital plans
• Commercialise the expanded strategic
partnership with Chow Tai Fook and Far East
Consortium by progressing joint venture
developments and a Marketing Alliance.
I would like to extend my gratitude to the
Board and management for their support and
commitment during FY2018. Sincere thanks also
to the wonderful team members across the Group
whose commitment, enthusiasm and hard work
has contributed so significantly to our ongoing
growth and evolution.
As we strive to become Australia’s leading
integrated resort company, The Star is similarly
indebted to the millions of guests who visited us
and experienced the transformational changes
already delivered. I’m proud to say there is
more to come.
Matt Bekier
Managing Director and Chief Executive Officer
ANNUAL REPORT 2018 10
BOARD OF DIRECTORS
JOHN O’NEILL AO
CHAIRMAN AND
NON- EXECUTIVE
DIRECTOR
MATT BEKIER
MANAGING DIRECTOR
AND CHIEF EXECUTIVE
OFFICER
GERARD BRADLEY
NON-EXECUTIVE
DIRECTOR
BEN HEAP
NON-EXECUTIVE
DIRECTOR
Diploma of Law; Foundation Fellow of the Australian Institute of Company Directors;
Officer of the Order of Australia; French decoration of Chevalier de la Légion d’Honneur
John O’Neill was formerly Managing Director and Chief Executive Officer of Australian Rugby Union
Limited, Chief Executive Officer of Football Federation Australia, Managing Director and Chief
Executive Officer of the State Bank of New South Wales, and Chairman of the Australian Wool
Exchange Limited. Mr O’Neill was also formerly a Director of Tabcorp Holdings Limited and Rugby
World Cup Limited.
Mr O’Neill was also the inaugural Chairman of Events New South Wales, which flowed from the
independent reviews he conducted into events strategy, convention and exhibition space, and tourism
on behalf of the New South Wales Government.
Mr O’Neill is currently a member of the Advisory Council of China Matters.
Master of Economics and Commerce; PhD in Finance
Matt Bekier is a member of the Board of the Australasian Gaming Council.
Mr Bekier was previously Chief Financial Officer and Executive Director of the Company and also
previously Chief Financial Officer of Tabcorp Holdings Limited from late 2005 and until the demerger
of the Company and its controlled entities in June 2011.
Prior to his role at Tabcorp, Mr Bekier previously held various roles with McKinsey & Company.
Bachelor of Commerce; Diploma of Advanced Accounting; Fellow of the Institute of Chartered
Accountants; Fellow of CPA Australia; Fellow of the Australian Institute of Company Directors; Fellow of
the Institute of Managers and Leaders
Gerard Bradley is the Chairman of Queensland Treasury Corporation and related companies, having
served for 14 years as Under Treasurer and Under Secretary of the Queensland Treasury Department.
He has extensive experience in public sector finance in both the Queensland and South Australian
Treasury Departments.
Mr Bradley has previously served as Chairman of the Board of Trustees at QSuper. His previous
non‑executive board memberships also include Funds SA, Queensland Investment Corporation,
Suncorp (Insurance & Finance), Queensland Water Infrastructure Pty Ltd, and South Bank Corporation.
Mr Bradley is currently a Non‑Executive Director of Pinnacle Investment Management Group Limited
and a Director of the Winston Churchill Memorial Trust.
Bachelor of Commerce (Finance); Bachelor of Science (Mathematics)
Ben Heap has wide‑ranging experience and expertise in asset and capital management as well as
financial technology and digital businesses.
Mr Heap is a Founding Partner of H2 Ventures, a financial technology, data and artificial intelligence
focused venture capital investment firm and a Non‑Executive Director of several high growth
companies. He is also a member of the Australian Commonwealth Government’s Fintech
Advisory Group.
Mr Heap was previously Managing Director and the Head of Australasia for UBS Global Asset
Management and prior to this, Head of Infrastructure for UBS Global Asset Management in the
Americas. He also held a number of directorships associated with these roles and was a Non‑Executive
Director of the Financial Services Council from 2011 to 2013. Earlier in his career, Mr Heap was Group
Executive, E‑Commerce & Corporate Development for TAB Limited.
THE STAR ENTERTAINMENT GROUP BOARD OF DIRECTORS
11
KATIE LAHEY AM
NON-EXECUTIVE
DIRECTOR
SALLY PITKIN
NON-EXECUTIVE
DIRECTOR
Bachelor of Arts (First Class Honours), Master of Business Administration;
Member of the Order of Australia
Katie Lahey has extensive experience in the retail, tourism and entertainment sectors and previously
held chief executive roles in the public and private sectors.
Ms Lahey is currently the Chair of Tourism & Transport Forum and Executive Chairman Australasia
for Korn Ferry International.
Ms Lahey was previously the Chair of Carnival Australia and also a member of the boards of David
Jones Limited, Australia Council Major Performing Arts, Hills Motorway Limited, Australia Post and
Garvan Research Foundation.
Doctor of Philosophy (Governance); Master of Laws; Bachelor of Laws; Fellow of the Australian Institute
of Company Directors
Sally Pitkin is a company director and lawyer with extensive corporate experience and over 20 years’
experience as a Non‑Executive Director and board member across a wide range of industries in the
private and public sectors.
Dr Pitkin is currently the Chair of Super Retail Group Limited and a Non‑Executive Director of Link
Administration Holdings Limited. She is also a member of the National Board of the Australian Institute
of Company Directors and chairs its Corporate Governance Committee
RICHARD SHEPPARD
NON-EXECUTIVE
DIRECTOR
Bachelor of Economics (First Class Honours), Fellow of the Australian Institute of Company Directors
Richard Sheppard has had an extensive executive career in the banking and finance sector including
an executive career with Macquarie Group Limited spanning more than 30 years.
Mr Sheppard was previously the Managing Director and Chief Executive Officer of Macquarie Bank
Limited and chaired the boards of a number of Macquarie’s listed entities. He has also served as
Chairman of the Commonwealth Government’s Financial Sector Advisory Council.
Mr Sheppard is currently the Chairman and a Non‑Executive Director of Dexus Property Group and a
Non‑Executive Director of Snowy Hydro Limited. He is also a Director of the Bradman Foundation.
ZLATKO TODORCEVSKI
NON-EXECUTIVE
DIRECTOR
Bachelor of Commerce (Accounting); Masters of Business Administration; Fellow of CPA Australia;
Fellow of Governance Institute of Australia
Zlatko Todorcevski is an experienced executive with over 30 years’ experience in the oil and gas,
logistics and manufacturing sectors. He has a strong background in corporate strategy and planning,
mergers and acquisitions, and strategic procurement. He also has deep finance expertise across capital
markets, investor relations, accounting and tax.
Mr Todorcevski was previously the Chief Financial Officer of Brambles Limited. Prior to that, he was
Chief Financial Officer of Oil Search Limited and the Chief Financial Officer for Energy at BHP.
Mr Todorcevski is currently Chairman of Adelaide Brighton Limited and a member of the Council
of the University of Wollongong. Mr Todorcevski is also a proposed Non‑Executive Director of the
Coles Board, subject to shareholder and other approvals of the demerger from Wesfarmers Limited
in November 2018.
ANNUAL REPORT 2018 12
EXECUTIVE TEAM
THE STAR ENTERTAINMENT GROUP’S EXPERIENCED
EXECUTIVE TEAM LEADS THE COMPANY TO DELIVER
WORLD-CLASS INTEGRATED RESORT ASSETS, DEVELOP
ITS PEOPLE AND CREATE SHAREHOLDER VALUE.
FROM LEFT TO RIGHT
PAULA
MARTIN
GEOFF
PARMENTER
GROUP GENERAL
COUNSEL & COMPANY
SECRETARY
GROUP EXECUTIVE
BRAND & CORPORATE
AFFAIRS
PAUL
MCWILLIAMS
CHIEF RISK OFFICER
GEORGE
HUGHES
GEOFF
HOGG
CHIEF MARKETING
OFFICER
MANAGING DIRECTOR
QUEENSLAND
THE STAR ENTERTAINMENT GROUP EXECUTIVE TEAM
13
MATT
BEKIER
CHAD
BARTON
JOHN
DE ANGELIS
GREG
HAWKINS
KIM
LEE
MANAGING DIRECTOR
& CHIEF EXECUTIVE
OFFICER
GROUP CHIEF
FINANCIAL OFFICER
CHIEF INFORMATION
OFFICER
MANAGING DIRECTOR
THE STAR SYDNEY
CHIEF HUMAN
RESOURCES OFFICER
ANNUAL REPORT 2018 14
GROUP
PERFORMANCE
THREE YEAR STATUTORY FINANCIAL RESULTS SUMMARY*
REPORTED RESULTS
FY2016
FY2017
FY2018
Gross Revenue
Revenue***
EBITDA
EBIT
NPAT
Significant Items (after tax)
NPAT before Significant Items
Earnings Per Share
Full Year Dividend
$m
2,357.7
2,268.1
488.8
325.0
194.4
0
194.4
$m
2,432.2
2,344.0
586.2
421.7
264.4
8.9
273.3
23.6 cents
13.0 cents
32.0 cents
16.0 cents
vs pcp (%)**
$m
vs pcp (%)**
↑ 3.2
↑ 3.3
↑ 19.9
↑ 29.8
↑ 36.0
↑ 100.0
↑ 40.6
↑ 36.0
↑ 23.1
2,579.5
2,472.0
474.8
287.6
148.1
36.7
184.8
17.5
20.5
↑ 6.1
↑ 5.5
↓ 19.0
↓ 31.8
↓ 44.0
↑ 312.4
↓ 32.4
↓ 45.3
↑ 28.1
*For further information please refer to the financial report contained in the Annual Report for the relevant financial year.
**Prior comparable period
***Nett of player rebates and promotional allowance
FY2018 GROUP PERFORMANCE HIGHLIGHTS
STRONG FINANCIAL RESULTS
Gross Revenue
EBITDA
NPAT
$m
2,695
588
258
NORMALISED
STATUTORY
vs pcp (%)
↑ 15.3
↑ 14.2
↑ 20.3
$m
2,580
484
148
vs pcp (%)
↑ 6.1
↓ 19.2
↓ 44.0
• Record normalised and statutory Gross Revenue, record normalised EBITDA
• High quality result – broad‑based growth, investments performing, 105% cash conversion
• Earnings momentum improved – 1H FY2018 normalised EBITDA up 11.8% vs pcp, 2H FY2018 up 16.4%.
BROAD-BASED DRIVERS AND MARKET
SHARE GAINS
• Broad‑based domestic growth – Slots,
Queensland Tables, Non Gaming
EFFECTIVE PROJECT DELIVERY
• The Darling Gold Coast and enlarged main
CAPEX REDUCING
• Group capital expenditure peaked in
gaming floor opened on time and on budget in
3Q FY2018
• Share gains in key gaming segments – Slots
• Construction of the first joint venture tower
(Sydney, Gold Coast), VIP
• VIP turnover up 54% – #1 Australia/New
Zealand market share, record low bad debts as
% of revenue.
RECORD DIVIDEND
• 13.0 cents per share fully franked final
dividend up 53% on pcp (20.5 cents per share
total dividend)
• Reflects business performance and enhanced
dividend payout policy – minimum 70% of
normalised NPAT from 2H FY2018.
commenced, fixed price contract below
the quantity surveyor’s estimates and
previous guidance.
EXPANDED PARTNERSHIPS
• Expanded strategic partnership announced
with Chow Tai Fook and Far East Consortium
• Marketing alliance with near term deliverables
• Equity placement aligns interests to benefit
all shareholders
• Developments identified.
FY2018 – substantially lower over FY2019‑21
• Joint venture capital expenditure guidance
for FY2019‑21 lowered on positive contracting
outcomes for first Gold Coast joint
venture tower
• Gearing of 1.4x Net Debt/Statutory FY2018
EBITDA supports investment plans.
THE STAR ENTERTAINMENT GROUP GROUP PERFORMANCE
15
The Star Sydney.
FY2018 PROPERTY PERFORMANCE HIGHLIGHTS
SYDNEY:
Outstanding Underlying Growth
Gross Revenue
EBITDA
NORMALISED
STATUTORY
$m
1,875
410
vs pcp (%)
↑ 17.5
↑ 27.9
$m
1,737
286
vs pcp (%)
↑ 3.0
↓ 28.7
• Record normalised and statutory Gross Revenue, record normalised EBITDA
• Normalised EBITDA margin growth from effective cost management
• Statutory results impacted by low actual International VIP Rebate win rate
• Visitation drives domestic growth – property visitation up 11.4% on pcp, record slots market share, Non‑Gaming revenue up 15.0% on pcp
• $52.5 billion International VIP Rebate turnover, Sydney #1 VIP resort by turnover in Australia/New Zealand.
QUEENSLAND:
Gold Coast Momentum, Brisbane Stabilisation
Gross Revenue
EBITDA
NORMALISED
STATUTORY
$m
820
178
vs pcp (%)
↑ 10.5
↓ 8.4
$m
843
199
vs pcp (%)
↑ 12.9
–
• Revenue growth across all segments, momentum improved as year progressed
• Successful relaunch of repositioned The Star Gold Coast – hosted Gold Coast 2018 Commonwealth Games celebrations and the
2018 TV WEEK Logie Awards
• Broad‑based domestic growth – domestic revenue up 7.4% on pcp
• $8.7 billion International VIP Rebate turnover (up 40.9% on pcp, 2H FY2018 up 78.3% vs pcp).
DELIVERING ON OUR STRATEGY
OUR STRATEGY
INVESTMENTS
• Signature gaming
• Premium hotel rooms
• Food & Beverage
• Retail (on site and proximate).
OUR DELIVERY
VISITATION
• Locals – high frequency,
high recommendation
• Visitors/ International VIP Rebate
business – low frequency, high spend.
EARNINGS
• Enhanced return on assets and
shareholder returns
• Supports further investment.
Evidence of investment
delivering above system growth
Track record of on time,
on budget delivery
Partnership to support long-
term growth opportunities
Improving returns to
shareholders
• Broad‑based growth
• Gold Coast investments
• Enhanced strategic partnership
• Strategic positioning
• Share gains in Slots
(Sydney, Gold Coast), VIP
• Effective cost management.
delivered on time, on budget
• Queen’s Wharf Brisbane –
• Earnings growth
• Effective contracting reduces
and reinforces capex guidance.
larger resort, increased revenue
diversity and growth
• Increased dividends – minimum
70% of normalised NPAT.
• Gold Coast masterplan with
multi‑year growth, positive
regulatory outcome
(no additional slots).
ANNUAL REPORT 2018 16
THE STAR ENTERTAINMENT GROUP
KEY PROJECTS
© Destination Brisbane Consortium. All rights reserved. Artist impression only. Subject to planning approvals.
QUEEN’S WHARF BRISBANE
THE STAR ENTERTAINMENT GROUP – TOGETHER WITH DESTINATION BRISBANE CONSORTIUM
PARTNERS CHOW TAI FOOK ENTERPRISES LIMITED AND FAR EAST CONSORTIUM INTERNATIONAL
LIMITED – HAS COMMENCED CONSTRUCTION ON QUEEN’S WHARF BRISBANE, WHICH WILL
TRANSFORM BRISBANE INTO A GLOBALLY RECOGNISED DESTINATION BY 2022.
The 2018 financial year saw some significant
milestones in relation to the Queen’s Wharf
Brisbane development. These included:
• The completion of demolition works across the
site, including the demolition of three former
government non‑heritage buildings in the
precinct, as well as the Margaret Street overpass
• The awarding of the coveted 6 Star Green Star
Communities rating, seeing Queen’s Wharf
Brisbane become the first development awarded
this rating in Brisbane
• The awarding of Queensland’s biggest ever
central business district excavation contract in
relation to the project
• The formal commencement of excavation and
shoring works at the site
• The announcement that the new and upgraded
public areas located along the riverfront
between the Goodwill Bridge and 1 William
Street will open in calendar year 2019, seeing
the pedestrian Mangrove Walk, upgrading of
the existing Bicentennial Bikeway, and new
recreational space at Waterline Park.
Main construction works on the site are expected
to begin in calendar year 2019, once excavation of
the foundations, basements and underground car
park is complete.
The Star Entertainment Group will continue
to operate Treasury Brisbane until the new
integrated resort opens and the transition to a
new casino occurs, at which point the two existing
heritage buildings will be subsequently repurposed
into a hotel operated by The Ritz‑Carlton and a
premium retail precinct.
• Restored and repurposed heritage buildings
• The equivalent of 12 football fields in size of
public space
• A public Sky Deck more than 100 metres
above William Street
• World‑class gaming facilities (to replace
Brisbane’s existing Treasury casino)
which will comprise less than 5% of the
development footprint
• 2,000 apartments
The Queen’s Wharf Brisbane integrated
resort development includes a range of
tourism, infrastructure and residential
developments, including:
• 50 new bars and restaurants
• Four new hotels, including the world renowned
The Ritz‑Carlton and the 6‑star Rosewood,
which will provide more than 1,000 premium
hotel rooms
• New retail space
• A new pedestrian bridge to South Bank.
The Queen’s Wharf Brisbane integrated resort
development is the largest private sector project
in Queensland, and will employ more than 2,000
workers during peak construction and create
more than 8,000 jobs in Queensland when
fully operational.
KEY PROJECTS
17
Left to right: Geoff Hogg, The Star Entertainment Group Managing Director Queensland; Hon Cameron Dick MP, Minister for State Development, Manufacturing, Infrastructure and Planning; Hon Kate Jones MP
Minister for Innovation and Tourism Industry Development and Minister for the Commonwealth Games; Hon Annastacia Palaszczuk, Queensland Premier; Hon Grace Grace MP, Minister for Education and
Minister for Industrial Relations and Member for McConnel; John O’Neill AO, The Star Entertainment Group Chairman; Simon Crooks, Destination Brisbane Consortium Project Director.
PROJECT TIMELINE*
2018
COMMENCED
EXCAVATION
WORKS TO
REMOVE AROUND
600,000M 3
OF SPOIL
2019
COMPLETION OF
QUEEN’S WHARF
BRISBANE STAGE
1 INCLUDING
WATER’S EDGE
PARKLAND AND
WALKWAY
2021
INTERNAL FIT-OUT
OF BUILDINGS IN
THE DEVELOPMENT
2022
COMMENCE
OPENING OF THE
CORE INTEGRATED
RESORT
DEVELOPMENT
2024
OPENING OF THE
REPURPOSED
TREASURY
BUILDING
*Timeline is indicative only. References to years are to calendar years.
ANNUAL REPORT 2018 18
© Destination Gold Coast Consortium. All rights reserved. Artist impression only.
Subject to planning approvals.
THE STAR GOLD COAST
THE STAR GOLD COAST’S ON-GOING TRANSFORMATION,
WORTH UP TO $850 MILLION IN COMBINED INVESTMENTS,
HAS POSITIONED THE PROPERTY AS A WORLD-CLASS
INTEGRATED RESORT, AND THE REGION’S PREMIER
ENTERTAINMENT AND TOURISM DESTINATION.
Development works continued during the 2018
financial year at The Star Gold Coast, with the
following projects across the property delivered
to date:
• Re‑energised main gaming floor experience
and private gaming area, Sovereign Resorts,
connecting the existing building through to the
luxury suite hotel
• The Darling, the 57 all‑suite luxury hotel forming
• A luxurious poolside experience and numerous
the centrepiece of The Star Gold Coast’s
transformation
• The full refurbishment of all 596 hotel rooms
at The Star Grand, including a refreshed and
redesigned hotel lobby
• Eleven new food and beverage offerings,
including the one‑hatted Japanese restaurant
Kiyomi and The Star Gold Coast’s latest
offering, Nineteen at The Star
• Canal front parkland upgrade in partnership with
City of Gold Coast Council
• A refreshed property arrival experience
• The exterior refresh of the existing hotel and a
rejuvenated events lawn and one of Australia’s
largest permanent outdoor projection systems
other property upgrades.
With these projects fully delivered, the next phase
of the redevelopment and expansion is advancing
with the following works program:
• Upgrade of the Harvest Buffet seeing a new
level of dining experience on the property
• New private gaming area, Oasis,
being progressed
• The commencement of construction of
the Dorsett hotel and apartments tower by
Destination Gold Coast Consortium on the site.
The new hotel and apartment tower is a project of
the joint venture vehicle – Destination Gold Coast
Consortium – including The Star Entertainment
Group and its partners Chow Tai Fook Enterprises
Limited and Far East Consortium
International Limited.
Having achieved successful apartment
pre‑sales, Destination Gold Coast
Consortium will commence construction
of the 700+ key hotel and apartment tower,
with early works having already commenced.
The tower is expected to be completed in the 2022
financial year.
The development is the first phase of a broader
master plan concept that includes the potential
for up to five hotel and/or residential towers,
a world class recreational deck with
water features, tropical gardens,
pools and spa facilities, and new
entertainment offerings.
THE STAR ENTERTAINMENT GROUP KEY PROJECTS
19
Queensland Premier Hon Annastacia Palaszczuk joined The Star Entertainment Group Chairman John O’Neill AO to break ground for The Dorsett hotel and apartment tower.
PROJECT TIMELINE*
2018
COMPLETION OF
THE DARLING SUITE
HOTEL PRIOR TO
GOLD COAST 2018
COMMONWEALTH
GAMES IN APRIL
COMPLETION OF
THE SPORTS BAR
AND THE NEW
SOVEREIGN ROOM
WORKS
COMMENCED
ON THE NEW
DORSETT HOTEL
AND APARTMENTS
TOWER
*Timeline is indicative only. References to years are to financial years.
2019
HARVEST BUFFET
COMPLETION,
ADDITIONAL
GAMING AREAS
TO OPEN
2022
COMPLETION
OF THE NEW
DORSETT HOTEL
AND APARTMENTS
TOWER
ANNUAL REPORT 2018 20
THE STAR SYDNEY
THE STAR SYDNEY, ONE OF THE CITY’S MOST LUXURIOUS AND AWARDED
ENTERTAINMENT AND TOURISM DESTINATIONS, HAS UP TO $1 BILLION
IN CAPITAL WORKS PROJECTS COMPLETED, IN PROGRESS OR IN PLANNING.
The 2018 financial year saw the delivery,
as well as commencement of a range of key
projects, including:
• The completion of the new Hotel Club Lounge
located in the Astral Tower
• The commencement of the Astral lobby and
Porte Cochere upgrade and refresh
• The commencement of the upgraded and
expanded Sovereign Resorts, expected to be
completed in the 2020 financial year
• The commencement of works in relation to the
main entry foyer upgrade.
The Star Entertainment Group is continuing to
progress the additional proposed development
works with its joint venture partners, Chow Tai
Fook Enterprises Limited and Far East Consortium
International Limited. Designed by internationally
acclaimed architects FJMT, the proposed
development works at The Star Sydney include:
• A new hotel and residential tower proposed
to be operated by the world renowned The
Ritz‑Carlton
• Additional food and beverage, retail, function
and event space, as well as other resort facilities
and attractions.
THE STAR ENTERTAINMENT GROUP KEY PROJECTS
21
FJMT’s proposed design for The Ritz-Carlton hotel and residences tower at The Star Sydney (Concept image only, subject to all approvals).
2019
EXPANDED FOOD
AND BEVERAGE
OFFERINGS
2020
COMPLETION OF
NEW SOVEREIGN
RESORT
PROJECT TIMELINE*
2018
ASTRAL
HOTEL TOWER
REFURBISHMENT,
COMPLETED
OPENING OF
NEW EXECUTIVE
LOUNGE
COMMENCED
UPGRADES ON
ASTRAL LOBBY
AND PORT
COCHERE
DEVELOPMENT
APPLICATION
LODGED FOR THE
RITZ-CARLTON
TOWER
*Timeline is indicative only. References to years are to financial years.
ANNUAL REPORT 2018 22
SUSTAINABILITY
SUSTAINABILITY STRATEGY
THE STAR ENTERTAINMENT GROUP’S VIEW OF SUSTAINABILITY IS BROAD
AND FOCUSES UPON CREATING LONG TERM VALUE IN THE MANAGEMENT OF
ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISKS AND OPPORTUNITIES.
In the 2018 financial year, the Group’s
Sustainability Strategy ‘Our Bright Future’
continued into its second year. The Group
progressed through key objective areas including:
• delivering advancements in supply
chain management
• developing indigenous relationships
• growing the energy and water efficiency
project pipeline
• building on existing relationships within our local
communities while nurturing new partnerships
• developing talented teams.
The Group’s Sustainability Strategy continues
to combine key priorities and objectives in a
four‑pillar framework that supports The Star
Entertainment Group’s business plan.
Our four sustainability strategic objectives are:
• we strive to be Australia’s leading integrated
resort company
• we build and operate world class properties
• we actively support guest wellbeing
• we attract, develop and retain talented teams.
In line with best practice, the Strategy is
supported by an annual Materiality Assessment
that identifies the Group’s key emerging and
operational environmental, social and governance
(ESG) issues and seeks to respond to these as
part of the Strategy’s key priorities.
THE STAR ENTERTAINMENT GROUP SUSTAINABILITY
23
OUR SUSTAINABILITY HIGHLIGHTS
FJMT’s proposed design for The Ritz-Carlton hotel and residences tower
at The Star Sydney (Concept image only, subject to all approvals).
WINNER
BEST ENVIRONMENTAL &
ENERGY EFFICIENCY PRACTICE
Australian Hotels Association National
Winner The Star Sydney
$1.2M
TOTAL COST BENEFIT DELIVERED
from the completion of 11 projects within
the Energy and Water Project Pipeline
$12M+
CONTRIBUTION
to charities, community groups and partnerships
#1
‘GLOBAL LEADER’ CASINO &
GAMING INDUSTRY
The Star Entertainment Group retained
its leadership position in the Dow Jones
Sustainability Index (DJSI)
JOINED
THE GREEN BUILDING COUNCIL
OF AUSTRALIA
$520K
DONATED
The Star Entertainment Group is proud to support
its neighbours and the communities in the cities
in which we operate
ACHIEVED
THE GROUP 'S FIRST 5 STAR
GREEN STAR INTERIORS RATING
for the Sydney corporate office
1,200+
INDOOR PLANTS INSTALLED
throughout the Sydney corporate office
$19.2M
CONTRIBUTED
to Responsible Gambling Fund (NSW)
EQUIVALENT OF
41,787
meals donated to OzHarvest
500+
REGIONAL BUSINESSES
and community members engaged during
a tourism roadshow in partnership with
Brisbane Airport Corporation
FINALIST
2017 AUSTRALIAN HOTELS ASSOCIATION
NATIONAL AWARDS FOR EXCELLENCE
Excellence in Training
OVER
26,310
BARS OF SOAP
made from recycling hotel soaps through Soap
Aid from our three properties
134
YEAR OLD
Edison Tubes retrieved, preserved and sent to
museums in Australia, the UK and USA
80+
APPRENTICE CHEFS
enrolled at The Star Culinary Institute in FY2018
18M+
VISITORS
The approximate number of guests who visited
The Star Sydney, The Star Gold Coast and
Treasury Brisbane in FY2018
LEARNING & DEVELOPMENT
TEAM AWARDED
TEAM OF THE YEAR
by Institute of Learning Professionals at the 2017
Australian Learning Impact Awards
TARGET
50%
FEMALE REPRESENTATION
in leadership levels 1‑4 by 2020
ANNUAL REPORT 2018 24
A newly refurbished room at The Astral Tower.
DELIVERING WORLD CLASS PROPERTIES
THE STAR ENTERTAINMENT GROUP DEVELOPS AND OPERATES WORLD CLASS,
ENVIRONMENTALLY SUSTAINABLE AND RESILIENT INTEGRATED RESORTS AND PRECINCTS.
TRANSITION TOWARDS
A MORE SUSTAINABLE
PORTFOLIO
The Star Entertainment Group continues to
support its strategic commitment to developing
and operating world class, environmentally
sustainable and resilient integrated resorts by
committing to future Green Star development and
operational ratings.
During the 2018 financial year, The Star Sydney
registered for its first Green Star Performance
Rating to assess and benchmark the integrated
resort’s baseline operational performance.
As part of the Group’s new office refurbishment
project, The Star Entertainment Group’s corporate
office located at 60 Union Street, Pyrmont,
New South Wales achieved a 5 Star Green Star
Interiors rating, the first Green Star Interiors rating
for the Group.
Destination Gold Coast Consortium (on behalf of
its joint venture partners) registered a new project,
committing the Dorsett hotel and apartments
tower (to be constructed on Broadbeach Island,
Broadbeach, Queensland) to achieve a 5 Star
Green Star Design & As Built v1.1 rating.
In the 2017 financial year, Destination Brisbane
Consortium (on behalf of The Star Entertainment
Group and its joint venture partners) was awarded
a 6 Star Green Star Communities Rating v1 rating
for the Queen’s Wharf Brisbane development.
The consortium is continuing towards its
commitments to achieving 6 Star Green Star
Design & As Built ratings for all new
non‑residential buildings, and Australian
best practice sustainability outcomes on the
repurposing of existing heritage buildings.
DOW JONES
SUSTAINABILITY INDEX
The Star Entertainment Group is proud to have led
the Dow Jones Sustainability Index (DJSI) for the
‘Casinos and Gaming’ Industry for the second year
running in the 2018 financial year.
The Group achieved the industry best result in
the Social Dimension, and received industry best
scores for the Human Capital Development,
Anti‑crime Policy and Measures and Promoting
Responsible Gaming aspects.
Compared to the previous year, the Group
improved its performance in relation to a
number of indicators, with particularly strong
improvements noted for our environmental
and social reporting, as well as Labour Practice
Indicators and Stakeholder Engagement.
The Group remains committed to measuring
our sustainability performance and reporting
transparently to our stakeholders, and uses
the results of the DJSI to identify areas for
improvement. In particular, over the past year we
have sought to enhance our approach to Human
Rights and sustainable supply chain management,
as well as continuing to deliver best practice
projects with leading aspects in relation to energy
and environmental eco‑efficiency.
THE STAR ENTERTAINMENT GROUP SUSTAINABILITY
25
THE STAR ENTERTAINMENT GROUP IS A MEMBER OF THE GREEN BUILDING COUNCIL OF AUSTRALIA,
AND COMMITTED TO THE FOLLOWING GREEN STAR DEVELOPMENT AND OPERATIONAL RATINGS.
Concept image only. Subject to all approvals.
Rooftop infinity-edge pool at The Darling Gold Coast.
Custom outdoor pool at The Darling Sydney.
QUEEN’S WHARF BRISBANE
INTEGRATED RESORT DEVELOPMENT
THE STAR
GOLD COAST
THE STAR
SYDNEY
COMMITTED
to achieving a 5 Star Green Star Design
& As Built v1.1 rating at the Dorsett hotel
and apartments tower, Broadbeach Island,
Broadbeach Qld
ACHIEVED
a 5 Star Green Star Interiors rating
COMMITTED
to achieving a 5 Star Green Star Design &
As Built v1.1 rating at the proposed
The Ritz‑Carlton hotel and residential tower
COMMITTED
to achieving a Green Star Performance rating
at 80 Pyrmont Street, Pyrmont NSW
ACHIEVED
a 6 Star Green Star Communities rating
COMMITTED
to achieving a 6 Star Green Star Design
& As‑built v1.1 rating for non–residential
new buildings
COMMITTED
to achieving Industry Best Practice
Design & As‑built v1.1 ratings for existing
heritage buildings
COMMITTED
to achieving Green Star Performance ratings
for each non‑residential building
ANNUAL REPORT 2018 26
Newly renovated corporate offices at 60 Union Street, Pyrmont, NSW.
DELIVERING WORLD CLASS PROPERTIES
TARGETING AUSTRALIAN
EXCELLENCE IN
OFFICE DESIGN
60 UNION STREET, PYRMONT, NSW
CORPORATE OFFICE
The Star Entertainment Group’s Sydney
corporate office at 60 Union Street, Pyrmont
underwent an extensive refurbishment
and relocation of floors during the 2018
financial year.
To ensure the new office design achieved our
sustainability goals in line with our Sustainable
Design and Operational Standards, and
delivered targeted health and wellbeing
benefits, the Group committed to achieving a
5 Star Green Star Interiors rating.
The 5 Star Green Star rating represents
Australian excellence and will assist us in our
journey to futureproof, tenant, own and
operate efficient buildings, and ensure that the
TARGETING ENERGY AND
CARBON REDUCTIONS
ENERGY AND CARBON EMISSIONS –
PROGRESS TOWARDS TARGETS
In the 2017 financial year, the Group set targets
to reduce carbon emissions by 30% from base
year FY2013 by the 2023 financial year on an
intensity basis. Reporting towards this target
has seen the Group expand reporting metrics to
include performance intensity per square meter
of conditioned space in addition to measuring
resource performance per visitor.
In the 2018 financial year, the Group’s total
emissions in carbon dioxide equivalents (CO2‑e)
from gas and electricity were 105,569 tonnes
(Scope 1 emissions from purchased natural gas
equal 10,321 tCO2‑e and Scope 2 emissions
from purchased electricity equal 95,248 tCO2‑e).
This footprint equates to an increase of 4.3% in
absolute emissions from 2017, however a decrease
of 2.8% from base year FY2013.
business is well placed to attract and grow our
talented teams.
By surveying our teams before and after
occupation the Group aims to deliver tangible
wellbeing benefits and to create a more
sustainability focused culture at our workplace,
and as an employer of choice.
• Blinds for external glare control and to control
visual comfort
• Low Volatile Organic Compound (VOC)
paint, carpet, sealants and adhesives, and
low formaldehyde engineered wood to limit
material off gassing
• Over 1,200 indoor plants.
The new office fit out on levels 1 to 3 at 60
Union Street, Pyrmont has delivered the
following features and benefits:
A major focus of the fit out was to improve
team member health, collaboration and
productivity by:
• Highly efficient energy systems and an air
• Introducing an internal staircase to encourage
conditioning system delivering a high level of
thermal comfort
team members to walk between floors
• Providing all team members with electronic
• Sustainably sourced timber and PVC products
‘sit‑to‑stand’ desks
• Low pollution equipment (minimising the
• Creating collaboration and breakout spaces
pollution within the fit out)
to encourage cohesive working
• High quality acoustic design, with high
• Installing large kitchen areas to facilitate team
performance acoustic separations
members’ relationship building.
• Full LED lighting system, flicker free and
consistent illumination
Measuring carbon emissions intensity by square
meter, the Group’s carbon emissions decreased by
8.4% from 0.38 tonnes CO2‑e per square meter
in FY2017 to 0.35 tonnes CO2‑e per square meter
in FY2018. The Group achieved a 16.7% reduction
in emissions intensity from base year FY2013
which is in line with the Group’s FY2023 carbon
reduction targets.
Carbon emissions also decreased 15.7% on a
visitor intensity basis from 6.65 kg CO2‑e/visitor
in base year FY2013 to 5.61kg CO2‑e/visitor
in FY2018.
The Group’s total energy consumption from
gas and electricity for the 2018 financial year
was 624,729 gigajoules (GJ), which was a 4.4%
increase from the 2017 financial year, and a 2.8%
increase in absolute consumption from base year
FY2013. Increases in total energy were expected in
line with the opening of the new The Darling hotel
at The Star Gold Coast.
However, energy consumption per visitor
decreased from 33.74 MJ/visitor in FY2017 to 33.18
MJ/visitor in FY2018, and delivered a reduction of
10.9% against base year FY2013 intensity.
Energy consumption per square meter also
decreased from 2.24 GJ per square meter in
FY2017 to 2.06 GJ per square meter in FY2018.
Energy intensity has decreased by 11.9% from the
FY2013 baseline year.
DELIVERING RESOURCE
EFFICIENCY PROJECTS
The Star Entertainment Group continues to
target sustainable reductions in resource use
through capital and operational energy and
water improvement projects. To date, the Group
has implemented over 37 projects delivering
environmental savings, and over $2.7 million
in cost savings in the last four financial years
against a business as usual model.
To ensure the Group continues to prioritise energy
efficiency in an expanding portfolio when energy
prices are expected to continue to rise, an energy
and water project pipeline was established in
FY2015 to ensure projects are implemented each
year that deliver cost savings and carbon benefits
towards our reduction targets.
THE STAR ENTERTAINMENT GROUP SUSTAINABILITY
ANNUAL REPORT 2018
27
The Group set long term carbon and water
targets in the 2017 financial year to achieve a
30% reduction in carbon and water intensity by
FY2023 against the FY2013 baseline on a square
meter basis. From the 2018 financial year, resource
intensity reporting has moved from a visitation
intensity metric to also include a consumption per
square meter metric to align with our targets.
As the portfolio is expected to grow substantially
through new developments and new loads coming
on line (notably The Darling at The Star Gold
Coast in FY2018), resource use is expected to
increase in absolute terms. However, consumption
per square meter is expected to decrease as
energy and water retrofit projects occur and new,
more efficient floor space opens over time.
The Star Entertainment Group has set out its
expectations for more sustainable developments
in the Group’s Sustainable Design and Operational
Standards (located on our website), that specify
mandatory and voluntary requirements for
build projects aligned to Green Star and the
National Australian Built Environment Rating
System (NABERS).
The Group’s Sustainable Design and Operational
Standards encourage project teams to implement
best practice sustainable opportunities through
requirements for energy and water efficiency,
waste management, standards for materials
selection, requirements to consider charity
partners within the project planning phase to
account for furniture, fixtures and equipment, and
to deliver against targets.
The following energy and carbon saving projects
were delivered in the 2018 financial year:
• The Star Gold Coast has implemented multiple
energy efficiency projects, including the
installation of run around heating coils in the air
handling units of The Darling hotel development,
estimated to save over $1 million and 2,332 MWh
per annum
• The Star Gold Coast’s new chilled and hot water
plant and controls upgrade, as part of a site wide
infrastructure project is expected to deliver over
$400,000 in resource savings. The adoption
of a building optimisation and fault detection
analytics platform is providing real‑time
performance data of plant and equipment to
maximise energy efficiency
• The Star Sydney continues to action lighting
replacement programs to LEDs across the
property, including lighting upgrades to
The Darling hotel guest rooms, corridors and
carpark, and back of house corridors, fire stairs
and egress lighting
• Treasury Brisbane continued with LED lighting
replacements and improving controls. In
addition, the Treasury buildings and the
corporate offices at 159 William Street,
Brisbane, are realising the benefits this year
from installing power factor correction.
CARBON EMISSIONS
6.65
108,595
5.96
5.69
5.78
5.70
5.61
104,953
105,099
104,829
101,170
105,569
0.42
0.40
0.40
0.40
0.38
0.35
FY13
FY14
FY15
FY16
FY17
FY18
Carbon Emissions
(tonnes CO2-e)
Emissions Intensity
(kg CO2-e/visitor)
Emissions Intensity
(tonnes CO2-e/SQM)
ENERGY CONSUMPTION
37.22
607,476
33.21
32.47
33.79
33.74
33.18
612,878
624,729
599,553
598,576
584,445
2.34
2.25
2.27
2.32
2.24
2.06
FY13
FY14
FY15
FY16
FY17
FY18
Energy Consumption
(GJ)
Energy Intensity
(MJ/visitor)
Emissions Intensity
(GJ/SQM)
The Group’s total carbon emissions, as reported, equate to emissions from purchased gas and electricity only, which aligns
with the Group’s targets that cover our material sources of carbon emissions. Additional sources of Scope 1 emissions include
refrigerant gases, and fuel consumption, both of which comprise less than 1% of total emissions for the year. Additionally, 1%
of FY2018 utility invoices were unbilled at the time of reporting, based on cost. The missing usage has been estimated as 0.1%
(82MWh) for electricity, 0.0% (15GJ) for gas.
Square meters, are square meters of conditioned space only, which is defined as space that has been mechanically heated or
cooled that the Group had operational control over at the close of each financial year.
Visitation numbers have been restated for The Star Sydney in FY2016 impacting the FY2016 intensity per visitor metric.
28
The Star Sydney.
DELIVERING WORLD CLASS PROPERTIES
REDUCING POTABLE
WATER USE
WATER PERFORMANCE – PROGRESS
TOWARDS TARGETS
The Group’s total potable water consumption was
805,570 kilolitres (kL) in the 2018 financial year,
a 1.4% decrease from FY2017, however an overall
increase of 17.0% from base year FY2013.
On a visitor intensity basis, The Star
Entertainment Group’s water consumption
decreased from 46.06 litres per visitor in FY2017
to 42.78 litres per visitor in FY2018, which is a
year on year decrease of 7.1% however an overall
increase of 1.4% from base year FY2013.
Measuring water intensity by square meter,
consumption has decreased from 3.06 kilolitres
per square meter in FY2017 to 2.65 kilolitres
per square meter in FY2018 which represents a
reduction of 13.4% year on year. Water intensity
per square meter has remained the same at
2.65 kilolitres per square meter in FY2018 against
the baseline year FY2013.
WATER SAVING PROJECTS
During the 2018 financial year, The Star
Entertainment Group undertook significant
capital building works which saw the temporary
shutdown of The Star Gold Coast’s reverse
osmosis plant for upsizing purposes. This impeded
our ability to utilize recycled water and therefore
significantly increased our use of potable water
on site and in the construction of The Darling.
WATER CONSUMPTION
42.19
38.87
42.04
46.64
46.06
42.78
845,861
817,121
805,570
776,229
688,440
683,898
2.65
2.63
2.94
3.20
3.06
2.65
FY13
FY14
FY15
FY16
FY17
FY18
Water Consumption
(kL)
Water Intensity
(L/visitor)
Emissions Intensity
(kL/SQM)
1% of FY2018 utility invoices were unbilled at the time of reporting based on cost. The missing usage has been estimated as
4.2% (34ML) for water.
Square meters, are square meters of conditioned space only, which is defined as space that has been mechanically heated or
cooled that the Group had operational control over at the close of each financial year.
Visitation numbers have been restated for The Star Sydney in FY2016 impacting the FY2016 intensity per visitor metric.
THE STAR ENTERTAINMENT GROUP SUSTAINABILITY
29
Chef at Harvest Buffet at The Star Sydney operating the knee levered ‘waterless’ woks.
To mitigate expected water usage increases
in building works, the Group focused on
operational water use reduction. Water audits
were undertaken across the back of house
areas, kitchen and food preparation spaces,
team member amenities and support areas
at The Star Sydney, The Star Gold Coast and
Treasury Brisbane.
Several opportunities were identified, including
leak rectification, flow restrictors, waterless
wok installations, levered taps and changes to
employee behaviour. The recommendations
formed part of the Operational Resource
Reduction Plans for each property and were
consistently implemented across the properties.
The Sustainability Team continues to work with
each of the Property Operations teams and Food
and Beverage teams to champion better use
of water towards achieving our FY2023 water
reduction target.
High impact water saving projects implemented in
the 2018 financial year include:
• The Star Gold Coast upgrading the reverse
osmosis unit with a new system, doubling its
maximum capacity to generate 20kL of water
per hour. This recycled water is being utilised for
cooling towers and boilers across the property
and in toilet flushing at The Darling hotel
• Treasury Brisbane is focussing on reducing
water use across operations, that has saved an
expected 2,800 kL through active leak detection
and rectification.
WATERLESS WOKS
All properties focus on water efficiency
in kitchens without compromising on
productivity or guest experience.
Aligned to this plan, The Star Entertainment
Group has a target to reduce potable water
consumption by 30% on an intensity basis by
2023 against base year FY2013.
A water audit conducted across The Star
Sydney’s back of house kitchens and
restaurants identified that two of the
property’s busiest kitchens operated older
model, water‑cooled woks rather than more
efficient ‘waterless’, or air‑cooled options.
Food Quarter and Soverign Resorts at The
Star Sydney are both high volume kitchens,
operating between 17 and 24 hours per day,
delivering on average more than 2,000
covers per day.
Water‑cooled woks require significant
amounts of water when in operation. Water
flows continuously across the deck of the wok
burners to moderate the enormous amount
of heat generated whilst cooking. Additional
water is used to clean the woks after
each meal is prepared. These applications
combined require water‑cooled woks to use
between 5,000L and 7,000L of water per day,
depending on time of use.
The introduction of knee levers to operate the
wok cleaning tap, or ‘laundry arm’, eliminates
the constant water flow usually associated
with this function.
Following the water audit, The Star Sydney
subsequently replaced the remaining
five water‑cooled woks with knee levered
‘waterless’ woks, and retrofitted existing
waterless woks with knee levers. These
combined efficiency improvements are
estimated to deliver:
• 12,658kL of water savings per annum*
• annual cost savings of approximately
$37,000.
The Star Entertainment Group’s sustainability
targets are supported by our Executive Chef
and Director of Culinary, by encouraging
kitchens and restaurants to save on water
consumption while continuing to provide an
excellent guest service experience.
The Star Gold Coast has installed waterless
woks gradually since January 2016,
completing installations across the entire
property in January 2018 with the new
Sovereign Resorts kitchen.
*Based on average 15 hours per day runtime per wok.
ANNUAL REPORT 2018 30
THE STAR ENTERTAINMENT GROUP
Team members at The Star Gold Coast celebrating the launch of our engagement sustainability program.
DELIVERING WORLD CLASS PROPERTIES
INCREASING RECYCLING
ACROSS OUR PROPERTIES
In line with its waste targets, the Group continues
to take a holistic approach to improving landfill
diversion across all operations at each property.
The Waste Strategy has been further developed
in 2018 to include education forums, training, spot
audits and direct team member engagement
roadshows to increase recycling streams in
offices, bars, restaurants, hotel rooms and back of
house operations.
The Group has been tracking recycling
performance against base year FY2013 to ensure
that improvements are measurable, continue to
divert increased waste volumes from landfill and
promote behavior change across the organisation.
Across the Group, total recycling rates have
increased from 10% diversion in FY2013 to 38%
diversion across all operations in FY2018. The Star
Sydney reached the highest diversion rate to date,
achieving a rate of 54% within the financial year.
On an intensity basis, recycling per square
meter and recycling per visitor has increased as
the Group’s recycling performance increased.
During the 2018 financial year a number of
initiatives were introduced to achieve continuous
improvement in recycling, including:
• Working in partnership with OzHarvest,
The Star Gold Coast and The Star Sydney
have redistributed 13,929 kilograms of food,
contributing to the charity’s school program
and providing the equivalent of 41,787 meals to
vulnerable communities
• The Star Sydney continues to support charities
through the redistribution of obsolete furniture,
equipment and hotel linen, donating over 8,500
kilograms of linen, towels and bathrobes to local
women’s refuges and clothing charities
• At The Star Sydney, multiple site audits across
the hotels, retail and bars have been undertaken.
Specialised training has been conducted for
housekeeping teams to maximise in‑room
recycling in Astral Hotel and Astral Residences
guest rooms. Sign‑in sheets have been
RECYCLING RATES
0.16
36%
0.16
38%
0.15
33%
0.14
31%
0.09
0.03
20%
10%
0.002
0.006
0.009
0.010
0.011
0.010
FY13
FY14
FY15
FY16
FY17
FY18
Recycling Rate
(%)
Recycling rate Intensity
(kg/visitor)
Recycling Intensity
(tonnes/SQM)
The FY2013 baseline for waste has been recalculated. ‘Recycling intensity’ kg/visitor has been used in FY2018 and FY2017, not
‘waste to landfill intensity kg/visitor’ as used in FY2016, which better reflects recycling performance.
Square meters, are square meters of conditioned space only, which is defined as space that has been mechanically heated or
cooled that the Group had operational control over at the close of each financial year.
Visitation numbers have been restated for The Star Sydney in FY2016 impacting the FY2016 intensity per visitor metric.
introduced to monitor team members trained
over the year and to promote accountability
• The Soap Aid used soap recycling program
has been expanded to The Darling at The Star
Sydney collecting over 2,631 kilograms of used
soaps since the program began
• All hotels across the Group are participating
in Nespresso’s capsule recycling program,
while The Star Gold Coast has recycled more
than 12,000 capsules from hotel rooms and
team members
• A sustainability roadshow for team members
was launched to increase awareness of the
Group’s sustainability targets, with reusable
coffee cups and water bottles as giveaways for
team members who made sustainability pledges.
The celebration of National Recycling Week and
Earth Hour provided opportunities to promote
recycling and provide face to face support and
education to team members.
SUSTAINABILITY
ANNUAL REPORT 2018
31
DEVELOPING A MORE SUSTAINABLE
SUPPLY CHAIN
The Star Entertainment Group is committed
to continuous improvement in supply chain
management and takes a long‑term view to
managing and maintaining relationships with
suppliers and contractors.
As part of our Sustainability Strategy, and
supported by our materiality assessment
process, the Group is working towards improving
sustainability outcomes in its sourcing and
procurement activities and reducing risk from our
largest spend areas.
In the 2018 financial year, the Group completed
a sustainable supply chain assessment and gap
analysis, and released a publicly available Supplier
Code of Conduct. The Code of Conduct sets
out our expectations of suppliers and seeks to
align the Group’s commitments with that of our
suppliers, leveraging global frameworks.
Results from the gap analysis determined that
the largest risks and opportunities lie within
the sourcing of food and within our capital
developments. To support these key risk areas,
The Star Entertainment Group undertook
supplier segmentation analysis and then
introduced a Supplier Risk Assessment focused
on the areas of environment, workforce, ethical
business practices, community and supply chain
management to ensure the Group works towards
the highest ethical, environmental and social
standards. The Group continues to challenge
suppliers to innovate and look for opportunities to
continuously improve their business and reduce
the sustainability impacts of their products and
services offering.
SUSTAINABILITY SOURCING IN
OPERATIONS
Managing close relationships with our suppliers
leads to identifying and implementing operational
improvements in the sustainability of our sourcing
and property management activities.
Across the business we have been working with
our suppliers on innovative and sustainable
product and process solutions which include the
following initiatives:
• Installing wine taps in high volume bar areas
including the new Harvest Buffet and Oasis at
The Star Gold Coast to reduce single use glass,
plastics and packaging
properties, so that they are available upon
request only, with a view to phase out their use
over time
• Implementing self‑serve still and sparkling water
fountains for guest use, to reduce single‑use
water bottles
• Nineteen at The Star bar, Pool Bar and the
Theatre at the Gold Coast, and Fat Noodle,
Harvest Buffet and Marquee at The Star Sydney
are using polycarb and melamine reusable
products for beverages as well as reusable
canape and dessert vessels
• Plastic takeaway containers are being phased
out in favour of recyclable cardboard across
casual dining offerings
• Napkins procured across our properties continue
to be made with Forest Stewardship Council
(FSC) certified pulp, and are carbon neutral
• Biodegradable cups and packaging continue to
be purchased to reduce plastics going to landfill.
Through the Group’s purchasing arrangements
with Biopak, 356 tonnes of carbon emissions
have been offset
• To reduce plastic straws being sent to landfill,
straws have been removed from bench tops
on the main gaming floor bars across all our
• Paper cups have been removed from The Star
Gold Coast cafeteria, saving more than 365,000
cups per year and over $30,000.
ENGAGING OUR TEAM IN
SUSTAINABILITY
In March 2018, The Star Entertainment Group
launched a top down engagement sustainability
program to encourage all team members to
become environmental advocates in their
professional and personal lives. Having evolved
from the 'Echo Friendly' program which was
launched in 2014, the program directly leverages
‘Our Bright Future’ sustainability strategy.
The Sustainability team, supported by the
executive management team, held roadshows
at each property to focus on the Group’s
carbon and water waste reduction targets
which include:
• 30% reduction in carbon emission intensity
by FY2023, based on the FY2013 baseline year
(on a per square meter basis)
• 30% reduction in potable water consumption
intensity by FY2023, based on the FY2013
baseline year (on a per square meter basis).
Roadshows held across The Star’s properties in
Sydney, Gold Coast and Brisbane encouraged
all team members to be involved in a range of
activities to drive behavioural changes, with the
environment being top of mind. To support the
roadshow, ‘pledge trees’ were installed at each
property, sustainably sourced food was made
available at our staff cafeterias and a limited
number of The Star‑branded KeepCups were
given to those making pledges.
Through the engagement series, over 10%
of our team members have made pledges,
promising to reduce their environmental
footprints in both their professional and
personal lives.
The sustainability program improves awareness
across properties, and amongst team members
of what our goals are, as well as how their
individual and team’s actions will have a
cumulative effect and positive impact on those
desired outcomes. The impacts range from
small to large and include:
• Improving guest experiences as team
members increase their understanding of
The Star’s sustainability commitments
• Promotion of our ‘Green Building’
commitments and benchmarks such as Green
Star, which assesses the sustainable design,
construction and operation of buildings,
fitouts and communities
• Food plate waste reduction initiatives
• Reduction in water consumption, particularly
across our operations
• Increased recycling activities
• Reduction in the use of disposable coffee
cups and straws.
Through multiple internal communication
channels, we will continue to encourage team
members to make more sustainable choices,
and become change agents. We are also
committed to following up on the pledges
already made, supporting team members in
their promises and assisting them in widening
their circles of influence in reducing their impact
on the environment.
32
THE STAR ENTERTAINMENT GROUP
The Star Gold Coast donated a new inflatable rescue boat to Surf Life Saving Queensland.
LEADING COMPANY
TRUSTED COMMUNITY
PARTNERS
Our vision is for The Star Entertainment Group
to be Australia’s leading integrated resort
company. We aim to achieve this by delivering
thrilling experiences to our local and international
guests and by fostering and maintaining close
connections with the community. For this
reason, our charitable partnerships reflect the
relationships that our properties have with each of
the cities in which they operate.
In the 2018 financial year, The Star Entertainment
Group was proud to have contributed more than
$12 million to a variety of community groups,
events, charities and sporting organisations. Our
support manifests in a variety of ways – from
corporate philanthropy programs through to team
members volunteering their time and expertise.
Each property is proud to also provide in‑kind use
of our world‑class venues, including the provision
of event management and food and beverage
supplies, for community and charity events.
THE STAR
ENTERTAINMENT
GROUP CONTINUED
ITS UNBROKEN
The Star Entertainment Group continued
its long‑term support and involvement with
Queensland‑based community organisations and
charities, including Surf Life Saving Queensland
and Choice, Passion, Life (formerly Cerebral Palsy
League). More broadly, The Star also assisted,
developed and revitalised important community
initiatives that demonstrated natural affinity
with our properties in Sydney, Brisbane and the
Gold Coast.
24YEAR
PARTNERSHIP WITH
SURF LIFE SAVING
QUEENSLAND
Guests celebrating the Gold Coast 2018 Commonwealth Games at The Star Gold Coast.
SUSTAINABILITY
33
Team members at The Star Sydney participating in the 2018 Sydney Gay & Lesbian Mardi Gras.
Leaders and team members from across The Star Entertainment Group participated in the ‘Walk and Talk for Women’s Leadership’ in
conjunction with International Women’s Day 2018.
The Star continues to support Australia’s creative
industries, holding long‑term partnerships with the
ARIA Awards and AACTA Awards.
The Star is also the Founding Partner of Women
in Gaming Australasia, dedicated to empowering
women working in the gaming industry.
The support group was launched at The Star
Sydney in May 2017.
THE STAR SYDNEY
In the 2018 financial year, The Star Sydney
committed collective financial funding
of $1.5 million to Barnardos Australia,
Taronga Conservation Society Australia and
Chris O’Brien Lifehouse.
The Star Sydney also provided seed funding
to assist City West Housing and other local
community groups to organise the annual
Ultimo‑Pyrmont ‘Uptown Festival’, held in October
2017. The Star was a major sponsor of other local
community events including the ‘Pyrmont Food
and Wine Festival’ and ‘Christmas in Pyrmont’.
The Star also assisted the local Chamber
of Commerce to re‑establish the Pyrmont
Growers Market.
The Star Sydney is proud to support its neighbours
in the city of Sydney and, through its Grants
Program, supported several local community
groups and charities. Groups assisted included
Glebe TreeHouse Before and After School Care,
Beehive Industries, Kookaburra Kids Foundation
and Freedom Hub.
In addition to our local commitments, The Star
Sydney was proud to continue its support and
involvement in a variety of local event and
sporting partnerships. In October 2017,
The Star Sydney announced a two‑year
partnership with Hyundai A‑League team Sydney
FC, including a front‑of‑jersey sponsorship.
In May 2018, alongside partners NSW Rugby
League, The Star Sydney announced the
introduction of BLUiE, a bionic ‘Blatchy Blue’ who
delivered exclusive behind the scenes content
to NSW Blues fans around the world. These
were in addition to the continuation of other
partnerships with:
• Sydney Swans
• The Australian Turf Club’s key race meets
including The Star Doncaster Mile, The Everest
and The Star Chinese Festival of Racing
• OzHarvest’s ‘Think. Eat. Save.’ Campaign
• Sydney Gay & Lesbian Mardi Gras
• City of Sydney Chinese New Year Festival.
Guests celebrating the Gold Coast 2018 Commonwealth Games at The Star Gold Coast.
Members of The Star Sydney’s Dragon Boat team participating
in the 2018 Chinese New Year Festival Dragon Boat Race.
ANNUAL REPORT 2018 34
Team members at The Star Gold Coast participating in
the 2017 Gold Coast Marathon.
LEADING COMPANY
THE STAR GOLD COAST
The Star Gold Coast maintains several
long‑term relationships with key charity partners
in Queensland, and continues to actively
encourage team members to contribute to the
community in which they live, work and play.
The Star Gold Coast continued its unbroken
support of Surf Life Saving Queensland (a
partnership launched in 1994) through its
rebranded fundraising initiative ‘Save Our
Savers Week’.
Surf lifesavers at Surfers Paradise received a
much‑needed and timely boost ahead of the
peak summer months, through the donation of a
new inflatable rescue boat to the club which was
part of over $31,000 of equipment donated by
The Star Gold Coast. Three rescue boards were
donated to Bilinga, Coolangatta, Broadbeach Surf
Life Saving Clubs and approximately 100 water
safety rash vests were purchased to cover as
many clubs as possible on the Gold Coast.
Continuing with its ongoing commitment of more
than 20 years to Cancer Council Queensland,
The Star Gold Coast helped raise much‑
needed awareness for cancer patients and
their families through the unveiling of a moving
daffodil projection on the property’s iconic façade.
The Gold Coast property further bolstered its
commitment to Cancer Council Queensland
as a Major Event Partner of the Gold Coast
‘Relay for Life’ for two years, combined with a
$23,000 donation.
The Star Gold Coast also continued its
partnership with the Gold Coast Hospital
Foundation to assist their mission to provide the
very best in health care facilities, health education
and medical treatment for the people of the Gold
Coast and visitors to the city, and the Currumbin
Wildlife Hospital Foundation which delivers vital
care for sick, injured and orphaned wildlife.
Team members nominated and supported local
organisations and charities through our ‘Open
Your Hearts’ program and other in‑kind donations,
collectively totalling close to $14,000.
The Star Gold Coast is also involved in various
event and sporting partnerships on the
Gold Coast, including:
• First Official Partner of the Gold Coast
2018 Commonwealth Games, providing live
entertainment, nightly themed events, fireworks,
and giant outdoor screens as part of The Star
Gold Coast’s highly successful 12‑day schedule
of events
• Official Partner of the Queensland Rugby
League (QRL) and Home of the Queensland
Maroons team, in conjunction with
Treasury Brisbane
• Naming rights sponsor of The Star Gold Coast
5.7km Challenge, and Accommodation Partner
of the Gold Coast Airport Marathon which
attracts 25,000 participants of all ages and
abilities from over 50 countries
• Official Partner of ‘Blues on Broadbeach’,
an iconic Australian blues music festival that
nurtures Australian talent and provides a stage
for international acts.
Team members alongside former Olympian Brooke Hanson
OAM (centre) celebrating the Gold Coast 2018
Commonwealth Games.
THE STAR ENTERTAINMENT GROUP SUSTAINABILITY
ANNUAL REPORT 2018
35
Kelvin Dodt, Treasury Brisbane Chief Operating Officer, with chefs, team members and families celebrating Christmas at Ronald McDonald House South Brisbane.
TREASURY BRISBANE
Treasury Brisbane has proudly supported
numerous community‑focused organisations
across the sporting, charity and cultural sectors
for more than two decades. During the 2018
financial year, Treasury Brisbane returned as
Presenting Partner of Brisbane Festival for the
fourth consecutive year. As one of Australia’s
major international arts and cultural events,
Brisbane Festival complements our strategic
community focus on city pride and local spirit and
positions our city as a global player.
In conjunction with its sister property, The Star
Gold Coast, Treasury Brisbane continued its
support of Ronald McDonald House South
East Queensland (RMHSEQ). Since December
2014, $3 million has been donated to RMHSEQ.
In addition to raising vital funds and awareness,
the team at Treasury Brisbane took pride in giving
seriously ill children and their families a temporary
break from their challenging circumstances via our
‘Make‑a‑Meal’ events. During the 2018 financial
year, Treasury team members committed their
time at two such events that included serving a
buffet smorgasbord and visits from Santa and the
Easter Bunny.
also proud to be involved in other events and
partnerships, including:
• Participating in the National Trust of
Queensland’s ‘Brisbane Open House’ event
by opening Treasury to the public and
conducting tours
Treasury Brisbane’s long‑standing support for
Choice, Passion, Life (formerly the Cerebral Palsy
League) entered its 16th consecutive year, with
$50,000 being donated to the charity partner
in addition to over $10,000 raised for the annual
‘We’ll Make a Change’ fundraising event.
As a proud corporate citizen, Treasury Brisbane
supported several multicultural events, including
the Festitalia Italian Festival and the Vietnamese
Lunar Festival, and was the Presenting Partner of
the Asia Pacific Screen Awards and the Brisbane
Asia Pacific Film Festival.Treasury Brisbane was
• Being a Partner of the Brisbane Racing Club
with naming rights for Treasury Brisbane Ladies
Oaks Day
• Participating in the annual ‘Vinnies CEO
Sleepout’ to raise awareness for those
experiencing homelessness.
Building on previous years, our ‘Open Your Hearts’
program engaged team members, enabling them
to nominate worthy recipients for charitable
causes. More than $20,000 was also donated
to other community organisations through
direct contributions.
36
Left to Right: Mixed team triathlon winners Ashleigh Gentle, Matthew Hauser
Gillian Backhouse and Jacob Birtwhistle celebrate at The Celebration Lawn.
LEADING COMPANY
GOLD COAST 2018
COMMONWEALTH GAMES
THE STAR GOLD COAST – THE
FIRST OFFICIAL PARTNER OF
THE COMMONWEALTH GAMES
AND A PROUD SPONSOR OF
COMMONWEALTH GAMES
AUSTRALIA TEAM – PROVED TO
BE THE BEST PLACE OUTSIDE
OF THE STADIUMS TO CHEER ON
OUR AUSTRALIAN ATHLETES,
AND WATCH ALL THE ACTION
BROADCAST LIVE ON THE LAWN
AND IN THE NEWLY UNVEILED
SPORTS BAR.
COMMUNITY FOCUSED
The Star Gold Coast underwent a significant
transformation in the lead up to the Gold Coast
2018 Commonwealth Games, providing guests
with 11 new food and beverage offerings including
a newly unveiled Sports Bar, 596 refurbished hotel
rooms at The Star Grand and a premium poolside
experience, as well as new luxury suite hotel,
The Darling, and rooftop destination, Nineteen at
The Star.
ENTERTAINMENT
Across 12 unforgettable days, The Star Gold
Coast’s entertainment program celebrated
the multicultural diversity of the Games taking
guests on a journey through the Best of British,
Caribbean Celebration, Party Pasifika and
The Great Aussie BBQ.
Approximately 180 entertainers and music
artists including The Potbelleez, Havana Brown,
Bobby Alu, Midnight Juggernauts, and Triple J
favourites KLP and Alex Dyson, performed on the
Celebration Lawn over the 12‑day period, while in
the Theatre, homegrown international superstar
Dami Im graced the stage with a special one‑off
show and Australian favourite Jimmy Barnes
performed ‘Working Class Man: An Evening of
Stories and Songs’ to a sold‑out crowd.
ATHLETES
More than 75 current athletes, including
Australian medallists Tia‑Clair Toomey, Rebecca
Wiasak, Jordan Kerby, Stephanie Morton, Kaarle
McCulloch, Melissa Wu, Dane Bird‑Smith,
Jemima Montag, Ken Hanson, Damien Schumann,
Christopher McHugh and Daniel Repacholi,
delighted fans with their visits to the Celebration
Lawn, providing first‑hand accounts of their
phenomenal successes throughout the Games.
THE CELEBRATION LAWN
The Star Gold Coast was also a celebrity hot‑
spot as Channel Seven – the Official Australian
Broadcaster of the Commonwealth Games
whose custom‑built lifeguard tower formed the
centrepiece of the celebrations on the lawn –
social media platform Facebook, and radio
stations Nova and Hot Tomato, broadcasted live
daily from the Celebration Lawn. Olympic and
Commonwealth Games legends were in
abundance as Ian Thorpe, Susie O’Neill, Brooke
Hanson, Nat Cooke, Matthew Mitcham and
Anna Meares all shared their support for the next
generation of athletes competing on home soil.
THE STAR ENTERTAINMENT GROUP SUSTAINABILITY
ANNUAL REPORT 2018
37
20km walk Gold Medal Winner Jemima Montag.
AROUND 6,500
ROOMS FILLED
OVER 115,000
FOOD ITEMS &
360,000 DRINKS
SERVED
2,000KG OF
FIREWORKS LIT
UP GOLD COAST
AND DELIGHTED
GUESTS
180 ENTERTAINERS
AND MUSIC ARTISTS
WOWED VISITORS
ACROSS THE
PROPERTY
2,000
CUSTOM-DESIGNED
CHOCOLATE GC2018
SURFBOARDS
DELIVERED TO
HOTEL GUESTS
Cyclists Rebecca Wiasak (silver) and Jordan Kerby (gold).
38
Guests and visitors at The Celebration Lawn during the
Gold Coast 2018 Commonwealth Games.
LEADING COMPANY
RESPONSIBLE GAMBLING
The Star Entertainment Group provides a variety
of engaging entertainment experiences at
its properties.
Most of our guests enjoy gambling as part of their
leisure and entertainment experience and do so
within their financial means. Unfortunately, some
of our guests find it more difficult than others to
control their gambling habits.
The Group’s responsible gambling program seeks
to identify, at an early stage, those guests who
may be exhibiting signs of problem gambling.
The objective of the responsible gambling
program is to minimise the potential harm that
may be caused by gambling (such as financial
hardship, emotional distress and relationship
breakdown), and to provide guests with the means
to make informed decisions about managing their
gambling behaviours. Each property operates
under a ‘Responsible Gambling Code of Practice’
which sets the standards and requirements to be
followed for the responsible delivery of gambling
products and services.
Key operational elements of our responsible
gambling program are:
• We provide guests with readily accessible
information about problem gambling, including
symptoms and treatment options
• We work with external support agencies to
provide assistance to problem gamblers
• We offer sensitive and confidential support
to guests seeking to exclude themselves from
attending one or more of our casinos (we have in
place agreements with selected Gambling Help
Services in Queensland and New South Wales
to allow individuals to self‑exclude from a casino
without having to attend the casino in person)
• We assist guests who have self‑excluded from
our casinos to also self‑exclude from other
gambling venues
• We monitor the amount of time a guest spends
on property and encourage regular breaks
in play
• We prevent intoxicated guests from
participating in gambling activities
• We prohibit the cashing of cheques to fund
gambling activities (other than by prior
arrangement)
• We do not allow betting on credit terms
• We conduct advertising and marketing
campaigns in compliance with applicable
regulations and industry codes of practice
• Our security and surveillance staff are trained
to prevent minors and excluded persons from
gaining access to gaming areas.
Board oversight of our responsible gambling
program is provided by the People, Culture and
Social Responsibility Committee.
At each of our casinos, a Patron Liaison Manager
supports the business in giving effect to the
responsible gambling program. Each of the
Patron Liaison Managers is a member of the
National Association for Gambling Studies Inc.,
which is a non‑profit organisation that aims to
promote discussion and research into all areas of
gambling activity. The Patron Liaison Managers
report directly to the Group’s General Manager
Compliance & Responsible Gambling.
In Queensland, a Patron Liaison Manager attends
Responsible Gambling Network meetings on
the Gold Coast, in Brisbane and on the Sunshine
Coast. The meetings are conducted by
the Gambling Help service in Queensland
and are attended by industry participants
and the Queensland Office of Liquor and Gaming
Regulation. The Responsible Gambling Network
provides a forum to exchange information and
views about approaches to responsible gambling
and finding solutions to improve the management
of problem gambling.
A percentage of gaming taxes paid by the Group
is directed to the Gambling Community Benefit
Fund in Queensland (previously the Jupiters
Casino Benefit fund). Since 1987 more than $100
million has been contributed to the Gambling
Community Benefit Fund for grants to community
groups across southern Queensland.
In the 2018 financial year, the Group contributed
$19.2 million to the Responsible Gambling Fund
(NSW). Funds are allocated, through the New
South Wales government, to support various
projects and services that aim to reduce and
prevent the potential harms associated with
problem gambling.
In New South Wales, we engage BetCare, a
dedicated independent counselling service,
to provide assistance for distressed guests,
including 24/7 crisis intervention. BetCare also
assists with gambling assessments for guests
seeking revocation of self‑exclusion agreements
and provides specialised responsible gambling
training to our Responsible Gambling Liaison
Officers. We are putting in place arrangements to
provide similar gambling support services for our
Queensland casinos.
THE STAR ENTERTAINMENT GROUP SUSTAINABILITY
39
In New South Wales, we are constructing a
dedicated space adjacent to our main gaming
area to offer guests safe and discrete access to
specialist gambling support counselling services.
We have plans to construct similar spaces at our
Queensland casinos during FY2019.
RESPONSIBLE SERVICE OF
ALCOHOL
Excessive consumption of alcohol can have
serious adverse health, social and economic
consequences for individuals, their family and
friends, and for the broader community.
The Group’s responsible service of alcohol (RSA)
practices comply with relevant state‑based
legislation, regulations and liquor licences.
At each property, all team members who are
directly involved in the service or supply of alcohol,
including those supervising or managing these
processes, must have a current RSA training
course certificate. All other employees are also
required to complete in‑house RSA training upon
commencement of employment, even though they
are not directly involved in the service or
supply of alcohol.
In addition to strict refusal of entry policies, each
property has in place processes for:
• Monitoring that guests on the premises are
not unduly affected by excess consumption
of alcohol
• Empowering food and beverage managers
to identify high‑risk periods and manage
consumption by limiting the amount of drinks
that can be purchased at any one time
• Mandatory reporting of all serious RSA
related incidents (to be documented within
the approved incident reporting databases
and records).
The Group’s properties have also taken the
following measures to support responsible service
of alcohol:
• The use of toughened or tempered glass for
many of the beverages served in the public
areas of the Gold Coast and Brisbane casino
properties (excluding restaurants)
• The use of toughened or tempered glass in the
main gaming floor venues and the use of plastic
drinking vessels at Sky Terrace, the Sports Bar
and Marquee Nightclub during restricted periods
at The Star Sydney.
Team members at the Gold Coast 2018 Commonwealth Games.
SECURITY AND
SURVEILLANCE
The Star Entertainment Group’s properties
maintain leading security and surveillance
operations. All properties are supported by 24
hours‑a‑day seven‑days‑a‑week security and
surveillance operations.
More than 400 team members ensure continued
security, surveillance and guest safety across our
three properties.
Standard operating procedures are in place at
each property to assess, respond to and manage
any suspected undesirable conduct.
An incidents register is maintained at each
property and the internal compliance team
reviews all requirements, and conducts regular
audits to support compliance with relevant
legislation and policies.
A bar manager at Sokyo Lounge at The Star Sydney.
ANNUAL REPORT 2018 40
Richard Francis-Jones, Design Director of FMJT presenting
at The Ritz-Carlton public exhibition engagement.
GUEST WELLBEING
ATTRACTING AROUND 18 MILLION GUESTS EACH YEAR, THE STAR ENTERTAINMENT GROUP’S
PROPERTIES ACROSS SYDNEY, BRISBANE AND THE GOLD COAST ARE WORLD-CLASS TOURIST
DESTINATIONS THAT OFFER VISITORS A DIVERSE SELECTION OF RESTAURANTS, BARS AND CAFES,
ACCOMMODATION, THEATRE, LIVE ENTERTAINMENT AND GAMING OPTIONS.
We are committed to providing a safe, secure and
comfortable experience to every guest at each
of our properties. With a high level of oversight
from regulatory bodies, we also maintain close
relationships with police and community groups
so that local and international visitors remain safe
at our properties.
The Group upholds a zero‑tolerance approach to
anti‑social behaviour to also ensure the amenity
of our valued community neighbours.
NEIGHBOURHOOD
ENGAGEMENT
The Star Entertainment Group continued to work
with local community and neighbourhood groups
across our properties to ensure they are informed
and updated on operations.
The Star Sydney’s ‘Neighbourhood Advisory
Panel’, and dedicated community newsletter
provides residents and local stakeholders with
regular consultation opportunities and up‑to‑
date information.
Throughout its redevelopment, The Star Gold
Coast updated neighbourhood stakeholders via
its website, while also working with Broadbeach
Alliance to directly reach and inform that precinct.
To inform surrounding neighbours and the local
community about the development of our future
world‑class Queen’s Wharf Brisbane integrated
resort, The Star Entertainment Group and its
consortium partners rolled out a variety of
engagement initiatives in the 2018 financial year.
These included:
• Developing and distributing a six‑page
community newsletter to all households within a
10‑kilometre radius of the city centre
• Running a community information session
for residents of the McConnel electorate in
October 2017
• Hosting a three‑day community activation
in Queen Street Mall, Brisbane in December
2017. The activation provided information and
answered questions from the community and
included running a competition to encourage
people to sign up to receive the Queen’s Wharf
Brisbane newsletter and construction notices
• Maintaining and regularly updating online
platforms including the Queen’s Wharf Brisbane
website and Facebook page. For example, a
regular and popular update is a short time‑
lapse camera video showcasing the last
month of progress on the construction site.
When construction activities have an impact on
the wider community, social media campaigns
are run in conjunction with radio advertising for
maximum coverage
THE STAR ENTERTAINMENT GROUP SUSTAINABILITY
41
• Working with archaeologists to retrieve and
preserve the Edison Tubes – 134 year old
electrical cabling – from underneath Brisbane’s
William Street, which have been sent to
museums across Australia, the United Kingdom,
and the USA for global audiences to enjoy.
In partnership with Brisbane Airport Corporation,
The Star Entertainment Group visited eight
surrounding regional communities between
October 2017 and July 2018 to showcase its
current and future South East Queensland
tourism infrastructure assets, and discuss
potential opportunities relating to jobs, training,
and procurement. These communities were
the Lockyer Valley, Moreton Bay, the Redlands,
Ipswich, Scenic Rim, Sunshine Coast, Logan,
and Toowoomba.
Preserved sections of the Edison tubes.
The Ritz-Carlton public exhibition engagement.
ANNUAL REPORT 2018 42
The Star Gold Coast celebrated the Gold Coast 2018 Commonwealth Games
with 2,000kg of fireworks.
Momofuku Seiōbo Head Chef Paul Carmichael with apprentices at The Star Gold Coast.
TALENTED TEAMS
LEARNING AND
DEVELOPMENT
To achieve The Star Entertainment Group’s
vision of being Australia’s leading integrated
resort company, there is a continued focus on
developing talented teams to deliver excellence
in guest service and, in turn, creating shareholder
value. Through its work, The Star’s Learning
and Development Team won the Team of the
Year award in the 2017 Australian Learning
Impact Awards conducted by the Institute for
Learning Professionals.
THE STAR ACADEMY
In March 2018, the Group launched
The Star Academy, a one‑stop shop for career
development opportunities across The Star’s
properties. The Star Academy combines
existing programs and provides access to
new initiatives designed to provide ongoing
investment in the development of its employees
for greater capability and career options.
The Star Academy is structured in three sections:
The Foundations Centre, the Skills Centre and the
Leadership Centre.
FOUNDATIONS CENTRE
The Foundations Centre covers the broad range
of development opportunities to assist our
employees in becoming ‘thrill creators’, including
orientation, guest service training, online
compliance training and career development.
In addition to developing our current employees,
the Group has also made significant investment in
developing future members of the industry. In the
2018 financial year, our school work experience
program had approximately 100 students spend a
week at one of The Star’s properties to learn about
a career in hospitality and tourism from behind the
scenes. In addition, over 550 school students were
taken on tours of our properties.
SKILLS CENTRE
The Skills Centre provides technical skills to our
employees including table games, chefs, food and
beverage, hotels and support functions.
In August 2017, the Group launched the Sydney
School of Hospitality Excellence (SSHE) in
conjunction with TAFE NSW at Parliament House
in Sydney. Following on from a similar partnership
with TAFE Queensland in 2015, SSHE aims to
meet the growing demands of international
visitors to Sydney and is overseen by an industry
panel comprised of many of the state’s leading
hospitality brands.
The Star Entertainment Group continues to lead
the way with its culinary arts apprenticeships
program (offered through The Star Culinary
Institute) having 80 apprentice chefs
registered in its program, making it one of
the largest private programs in Australia. The
Group was recognised as one of three national
finalists for the Australian Training Awards in the
Australian Apprenticeships – Employer Award
held in Canberra in November 2017.
LEADERSHIP CENTRE
The Leadership Centre provides numerous
development opportunities to grow as a leader
at The Star Entertainment Group. These
opportunities are based on our Leadership
Competencies (launched in 2017) which set
an expectation for our leaders to think and act
like owners by creating impact, inspiring and
energising others, and leading change.
The Group develops its leaders through a mixture
of internal and external programs and resources,
ranging from its role as a founding partner of the
‘Women in MBA’ program with the Macquarie
Graduate School of Management (MGSM) to
coaching and mentoring opportunities, to online
resources focused on delivering just‑in‑time
learning, as well as other programs conducted
internally. The Group recognises that its leaders
must be highly skilled and empowered to develop
talented teams.
THE STAR ENTERTAINMENT GROUP SUSTAINABILITY
43
DIVERSITY AND INCLUSION TARGETS
50%
FEMALE
REPRESENTATION
IN LEADERSHIP
LEVELS 1-4
BY 2020
20%
ASIAN
REPRESENTATION
IN LEADERSHIP
LEVELS 1-3
BY 2020
5%
YEAR-ON-YEAR
INCREASE
IN AUSTRALIAN
WORKPLACE
EQUALITY INDEX
SCORE
A WELCOMING
CULTURE
FOR OUR MATURE
AGED TEAM
MEMBERS
DIVERSITY AND INCLUSION
The Star Entertainment Group recognises the
important contributions each team member
makes to the organisation, and strives to ensure
their workplace provides an environment that
fosters and encourages them to strive to be the
best they can be. Our policies, practices and
behaviours all contribute to creating a safe,
welcoming and inclusive workplace and support
equitable and collaborative relationships and
talented teams. This is underpinned by our
Diversity and Inclusion Policy and is supported by
our Diversity and Inclusion Strategy.
Our internal Diversity and Inclusion Steering
Committee continues to oversee the diversity
and inclusion initiatives across the Group, with
support and input from Diversity Working Groups
that focus on four key areas: gender, multicultural,
lesbian, gay, bisexual, transgender and intersex
(LGBTI) and age.
Each of these focus areas have measurable
targets, with progress towards these goals
reported back to the Board of Directors on a
regular basis throughout the year.
To support our targets, and broaden the positive
impact of our diversity and inclusion strategy
across the organisation, our team members have
participated in a wide range of initiatives and local
and global events.
GENDER
The Group promotes gender equality in
several ways.
Alongside Aristocrat Leisure Limited, the Group
was a founding partner of Women in Gaming
Australasia (WGA), with the organisation
expanding across several Australian cities
throughout the last financial year. WGA is
dedicated to supporting the development
and success of women who work in the
gaming industry.
Education, awareness and training form a key part
of The Star Entertainment Group’s Diversity and
Inclusion Strategy. On‑site training programs in
cultural awareness are offered to our employees,
and LGBTQI‑specific training for employees
continues to be provided by our partner in LGBTQI
inclusion, ‘Pride in Diversity’.
The Group promotes women in leadership through
its continuing commitment to the Women in MBA
program, in conjunction with MGSM.
In celebration of International Women’s Day,
The Star Entertainment Group once again held
its annual Walk and Talk for Women in Leadership
events across each of our properties. These
events provided a platform for female employees
to connect with leaders in the business.
MULTICULTURAL
When asked about their ethnic background, two‑
thirds of the respondents in the 2018 employee
engagement survey identified as non‑Caucasian.
In recognition of this rich diversity in our workforce,
we celebrate Lunar New Year, Mid‑Autumn
Festival and Harmony Day across our properties.
We also showcase this cultural diversity internally
by profiling the career journeys and experiences
of various multicultural team members, and we
partner with external organisations to provide
development opportunities to people of diverse
cultural backgrounds.
LGBTQI
The Star Sydney has been a proud partner of the
Sydney Gay and Lesbian Mardi Gras for three
consecutive years. Our sponsorship includes team
members taking part in the Mardi Gras parade
and supporting Queer Screen (a not‑for‑profit
arts organisation that showcases LGBTI screen
content at the Mardi Gras Film Festival and the
Queer Screen Film Festival).
The Star ambassador, Erin Holland celebrating the
2018 Sydney Gay & Lesbian Mardi Gras.
In addition, The Star Entertainment Group also
partners with the following LGBTQI organisations
and events:
• Australian LGBTI Awards
• Sydney Swans Pride Round
• Gold Coast Glitter Festival
• Pride House Gold Coast for the 2018
Commonwealth Games.
We promote the following events internally to raise
awareness amongst our team members:
• International Day Against Homophobia,
Transphobia and Biphobia (IDAHOTB)
• Wear it Purple Day (to support LGBTI youth)
• World AIDS Day (raising awareness about the
issues surrounding HIV and AIDS).
We have also produced and distributed our
own guide to supporting gender‑transitioning
team members.
MATURE AGE
To drive greater inclusion of mature age workers,
we provide a range of policies and practices that
allow mature age workers to optimise their late
careers, including transition to retirement and
flexible working options. We also offer a seminar
program that supports mature age team members
in planning for the later stages of their careers.
RECOGNITION AND AWARDS
• Australian Workplace Equality Index (AWEI) –
Bronze Award
• Australian HR Awards Finalist
– Best Workplace Diversity &
Inclusion Program
– Employer of Choice (>1,000 employees).
Leaders and team members from across The Star Entertainment Group participated in the 'Walk and Talk for
Women’s Leadership' in conjunction with 2018 International Women’s Day .
ANNUAL REPORT 2018 44
TALENTED TEAMS
OUR SAFETY VISION
TO ELIMINATE WORK RELATED INJURIES, ILLNESSES, UNSAFE WORK
PRACTICES AND PROMOTE THE HEALTH, SAFETY AND WELFARE OF
OUR TEAM MEMBERS AND GUESTS.
SAFETY
CULTURE
RISK
MANAGEMENT
SAFETY
MANAGEMENT
SYSTEMS
HUMAN
FACTORS
Another aspect of the Safety Management
System that was reviewed was health and safety
consultation and team member representation.
This review resulted in an increase in the number
of team member representatives elected by
their workgroups. Training was provided to newly
elected health and safety representatives to
support them in their role. This has seen an
increase in participation at health and safety
committee meetings and has provided an avenue
to effective health and safety consultation
occurs across the Group whenever there is a
change affecting the health and safety of our
team members.
HUMAN FACTORS
Across all properties workgroups were formed
to assess risks related to slips, trips and falls
affecting team members, contractors and
guests. Several physical changes were made
to existing floor surfaces (such as improved
cleaning methods and installation of slip resistant
surfaces) and an awareness campaign was
rolled out. As a result, there has been a decrease in
the number of slip, trip and fall incidents.
SAFETY ASSURANCE AND
INVESTIGATION
A focus during the year has been on gaining
deeper insights from safety related incident
investigations including root cause and impacts
of organisational decision making on outcomes.
Learnings have included a need for greater
training, clearer understanding of roles and
responsibilities throughout the business and
ownership of actions to successfully create
positive change.
HEALTH AND SAFETY
The 2018 financial year was a year of further
consolidation of processes and practices to
pursue The Star Entertainment Group’s goal of
zero fatalities and serious injuries. Our focus has
not only been on prevention using a risk based
approach but also on continuous improvement
in relation to injury management. Although
improvement towards our target is fundamental,
our performance and key metrics are testament
to the initiatives put in place to meet our
safety goals.
SAFETY CULTURE
Several initiatives and improvements were
made during the year: 'Play it Safe' rebrand;
the introduction of 'Safety Shares' being
presented and discussed at team meetings; the
establishment of the Senior Leadership Health &
Safety Committee and an extension of the Senior
Leadership Safety Walks to include a greater
number of managers. There was also a greater
focus on the co‑creation of work area specific
safety procedures and training between the
Health & Safety team and departmental teams.
RISK MANAGEMENT
The Group’s top health and safety risks were
reviewed and it was validated that we have
adequate critical risk controls in place.
SAFETY MANAGEMENT SYSTEMS
The Safety Management System was
independently audited for our Queensland
Self‑Insurance licence and achieved a positive
pass result.
During the 2018 financial year, The Group
developed a new Safety Management System
aimed at reducing administrative burden and
making safety part of operational business as
usual. This new approach to safety will continue to
be implemented across the business throughout
the 2019 financial year.
SAFETY
ASSURANCE AND
INVESTIGATION
HEALTH AND
WELLBEING
KEY PERFORMANCE INDICATORS
The Group continues to use several lead and
outcome based safety indicators for team
members, including:
• Total Recordable Injury Frequency Rate (TRIFR)
• Lost Time Injury Frequency Rate (LTIFR)
• % of incidents reported within 24 hours
• % of investigations commenced within 24 hours.
Our TRIFR reduced by a further 33% from the
2017 financial year, achieving the assigned annual
target set by the Board.
TOTAL RECORDABLE INJURY FREQUENCY
RATE (TRIFR)
FY14 - 31.3
FY15 - 31.1
FY16 - 24.4
FY17 - 23.2
FY18 - 14.6
THE STAR ENTERTAINMENT GROUP SUSTAINABILITY
45
REWARD AND RECOGNITION
TO BUILD A GUEST-CENTRIC AND SERVICE FOCUSED CULTURE,
THE STAR ENTERTAINMENT GROUP RECOGNISES THE IMPORTANCE
OF CELEBRATING AND SHARING THE STORIES OF OUR TEAM
MEMBERS AND LEADERS, WHO SET THE BENCHMARK FOR GUEST
SERVICE EXCELLENCE AND DELIVER A CONSISTENTLY HIGH
‘Star Awards’ is one way The Star Entertainment
Group recognises and rewards top performers.
Annual awards are given to team members
who are delivering thrilling guest experiences
by demonstrating qualifying behaviours called
‘Star Qualities’, and to leaders who are living our
‘Values’ of City Pride, Ownership, Welcoming and
True Teamwork.
STANDARD OF PERFORMANCE.
LOIZALYN SANTIAGO
ATTENDANT AT M&G CAFÉ AND BAR, THE STAR GOLD COAST
Loizalyn has been a core team member of M&G Café and Bar as well as the entire Gold Coast property. Her bubbly
personality and outstanding customer service is a true delight, having an incredible influence on everyone she
encounters, both guests and fellow team members alike. She remembers individual guest orders, which is one way
Loizalyn adds that special personal touch.
Loizalyn has provided a number of suggestions to the management team in streamlining procedures to offer our
guests quicker and more efficient service. Loizalyn is one of our standout trainers for our team as she understands
that everyone has different strengths. She is patient and encouraging when teaching new skills, and shows great
pride in her work and in developing the team around her.
Due to her outstanding work ethic and dedication, Loizalyn has since been transferred to Sovereign (the premium
private gaming room at The Star Gold Coast), where she continues to provide exceptional service to our VIP guests.
MARIE ANN BREIDI
GAMING MANAGER, THE STAR SYDNEY
Marie Ann is an excellent example of a true leader. She demonstrates high service commitments every day by juggling
the multiple demands of her role whilst ensuring her team are engaged and heard when it comes to their working area
and individual development.
Marie Ann leads the way in resolving difficult situations, always finding a positive outcome, and sets a great example
of impactful leadership to the benefit of her team and the wider organisation. She inspires others through her success
and dedication to her career in gaming, and through her participation in the ‘Women @ The Star’ diversity group.
BERNICE COLCOMB
CHEF DE CUISINE, CULINARY INSTITUTE, THE STAR ENTERTAINMENT GROUP
Bernice won the Employee of the Year award in the corporate team for her extraordinary leadership of the Apprentice
Chef Program at The Star Culinary Institute. Through her leadership, Bernice has lifted the overall performance of her
team by creating strong professional relationships and demonstrating true teamwork.
Under Bernice’s guidance, The Star’s apprentice chefs have achieved top three places in the Les Toques Blanches
competition in Melbourne 2017, second place in the Queensland Apprentice Chef of the Year competition, and
won gold medal at Sydney’s Johnson’s Competition. These accomplishments reflect Bernice’s leadership and
commitment to developing every one of her team members to reach their potential and elevate The Star as a leader
in the culinary and hospitality industries.
RICHARD FIDELJ
VIP SERVICES MANAGER, TREASURY BRISBANE
As a Leader, Richard is known for his dedication to The Star’s values and his ability to influence across the business.
Leading by example, he treats everyone with respect, is highly inclusive and actively supports others to reach their
goals. Richard is not content with ordinary; he seeks challenges and thrives on achieving outcomes that truly thrill
our guests.
Since winning the Leader Award at Treasury Brisbane, Richard has been promoted to Senior Manager VIP Hospitality
overseeing VIP hospitality at The Star Gold Coast. This is further testament to Richard’s exceptional leadership.
ANNUAL REPORT 2018 46
THE STAR ENTERTAINMENT GROUP
DIRECTORS', REMUNERATION
AND FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2018
THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES
CONTENTS
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
REMUNERATION REPORT
FINANCIAL REPORT
Consolidated income statement
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the financial statements
A. Key income statement disclosures
B. Key balance sheet disclosures
C. Commitments, contingencies and subsequent events
D. Group structure
E. Risk management
F. Other disclosures
G. Accounting policies and corporate information
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
47
61
62
83
84
85
86
87
88
89
94
103
104
113
120
129
135
136
47
Directors' Report
for the year ended 30 June 2018
The Directors of The Star Entertainment Group Limited (the Company) submit their report for the consolidated entity
comprising the Company and its controlled entities (collectively referred to as the Group) in respect of the financial
year ended 30 June 2018.
1. Directors
The names and titles of the Company's Directors in office during the financial year ended 30 June 2018 and until the
date of this report are set out below. Directors were in office for this entire period unless otherwise stated.
Directors
John O'Neill AO
Matt Bekier
Gerard Bradley
Ben Heap a
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Zlatko Todorcevski b
Chairman and Non-Executive Director
Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Former
Greg Hayes c
Non-Executive Director
a
b
c
On 18 December 2017, the Company announced the appointment of Ben Heap as a Non-Executive Director, subject to
casino regulatory approvals being obtained. Ben Heap commenced as a Non-Executive Director on 23 May 2018.
On 23 October 2017, the Company announced the appointment of Zlatko Todorcevski as a Non-Executive Director, subject
to casino regulatory approvals being obtained. Zlatko Todorcevski commenced as a Non-Executive Director on 23 May 2018.
Ceased as Non-Executive Director on 26 October 2017 following the 2017 Annual General Meeting.
2. Operating and Financial Review
The Operating and Financial Review for the year ended 30 June 2018 has been designed to provide shareholders with
a clear and concise overview of the Groupʼs operations, financial position, business strategies and prospects. The
review also discusses the impact of key transactions and events that have taken place during the reporting period and
material business risks faced by the Group, to allow shareholders to make an informed assessment of the results and
future prospects of the Company. The review complements the Financial Report and has been prepared in accordance
with the guidance set out in ASICʼs Regulatory Guide 247.
2.1. Principal activities
The principal activities of the Group are the management of integrated resorts with gaming, entertainment and
hospitality services.
The Group operates The Star Sydney (Sydney), The Star Gold Coast (Gold Coast) and Treasury Brisbane
(Brisbane). The Group also manages the Gold Coast Convention and Exhibition Centre on behalf of the Queensland
Government and invests in a number of strategic joint ventures.
2.2. Business strategies
The key strategic priorities for the Group, in pursuit of its vision to be Australia's leading integrated resort company, are
to:
• Create world class integrated resorts with local spirit;
• Manage planned capital expenditure programs to deliver value and returns for shareholders;
•
Increase volume of high-value visitation from local, domestic and international markets through continued
emphasis on loyalty and gaming strategies;
• Grow the domestic and International VIP Rebate business;
•
•
Identify, retain, develop and engage a highly talented team of employees across properties and the Group; and
Improve customer experience, including providing customers with tailored product and service offerings.
The Group has continued to make good progress on all these key strategic priorities during the year, with:
• Continuation of broad-based growth across all properties, reflecting operational improvements and investments;
• Balance sheet strengthened through US Private Placement (USPP) refinance and strategic placement share issue;
•
Joint venture capital works progressing to plan, including Queen's Wharf Brisbane and preparing to commence
construction of first Gold Coast joint venture tower;
• Ongoing delivery of a number of capital projects in Sydney and Gold Coast, including The Darling Gold Coast, with
positive responses from customers; and
• Continued focus on international diversification.
1
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 48
Directors' Report
for the year ended 30 June 2018
Looking forward into FY2019, the focus will be on the following key strategic priorities:
• Yield assets through gains in customer engagement, operating efficiency and marketing;
• Continue the drive to differentiate the value proposition at each of the Group's properties, through brand, loyalty,
customer service, food and beverage, and tourism;
• Enhance operational leadership in marketing and gaming;
• Deliver capital programs on time and budget whilst minimising disruption;
• Continue diversification of the Groupʼs international revenue base;
• Efficient commissioning and monetising of investments;
• Deliver on the next stage of the capital development programs at Queenʼs Wharf Brisbane;
• Progress joint venture developments in partnership with Chow Tai Fook Enterprises Limited (CTF) and Far East
Consortium International Limited (FEC). Obtain planning consent for The Ritz-Carlton Hotel in Sydney and
progress construction of the first tower and presales for the second tower of the masterplan on the Gold Coast; and
• Progress marketing alliance by leveraging joint venture partners' networks.
The Directors have excluded from this report any further information on the likely developments in the operations of the
Group and the expected results of those operations in future financial years, as the Directors have reasonable grounds
to believe that to include such information will be likely to result in unreasonable prejudice to the Group.
2.3. Group performance
Gross revenue of $2,579.5 million was up 6.1% on the prior comparable period (pcp), largely due to broad based
growth in domestic gaming, non-gaming and International VIP Rebate business despite lower win rate of 1.16%
(1.59% in the pcp). Normalised1 revenues increased 15.3% for the period to $2,694.7 million, up from $2,337.3 million
in the pcp, as a result of higher International VIP Rebate volumes, up 54.3%.
Operating costs were up 6.9% due to domestic and International VIP Rebate volume growth, increased non-gaming
activity, new and upgraded facilities at The Star Gold Coast and higher wage rates, offset by continued cost
management. Gaming taxes, levies and commissions were up 22.7%, reflecting substantial growth in the International
VIP Rebate volumes. Significant expense items ($52.4 million before tax) relate to Gold Coast pre-opening costs of
$9.5 million for The Darling Gold Coast and USPP refinance costs of $42.9 million.
Earnings before interest, tax, depreciation, amortisation (EBITDA) of $474.8 million was down 19.0% on the pcp.
Normalised EBITDA (excluding significant items) of $588.1 million was up 14.2% on the pcp.
Depreciation and amortisation expense of $187.2 million was up 13.8% on the pcp as new investments are
commissioned. Finance costs, excluding significant items, of $34.3 million were down 17.7% on the pcp.
Net profit after tax (NPAT) was $148.1 million, down 44.0% on the pcp. Normalised NPAT, excluding significant items,
was $258.1 million, up 20.3% on the pcp.
Basic and Diluted Earnings per Share were both 17.5 cents (32.0 cents Basic and 31.9 cents Diluted in the pcp). A
final dividend of 13.0 cents fully franked was declared, totalling 20.5 cents per share for the year, up 28.1% on the pcp.
This reflects the Board's confidence in the business and new dividend policy announced on 29 March 2018, with a
minimum dividend of 70% of normalised NPAT. This amounts to 122% of statutory NPAT (70% of normalised NPAT)
for the year ended 30 June 2018.
2.4. Group financial position
The Groupʼs net assets increased by 15.4% compared with the previous year, due to increased capital expenditure
and a reduction in debt as a result of the USPP refinance and the placement share issue.
Receivables remain well managed, with receivables not impaired less than one year comprising over 95% of the total.
Net receivables past due, not impaired, greater than 30 days of $28.2 million, were down 15.3% on the pcp, reflecting
strong collections during the period.
Net debt2 was $678.0 million (30 June 2017: $787.5 million) with $580.0 million in undrawn facilities and an average
drawn debt maturity of 5.95 years. Gearing levels remain conservative at 1.4 times FY2018 net debt to statutory
EBITDA, positioning the Group well to continue executing on its growth projects. Operating cash flow before interest
and tax was $496.7 million (30 June 2017: $567.9 million) with an EBITDA to cash conversion ratio of 105% (30 June
2017: 97%).
Trade and other payables of $365.8 million were up 12.7%, predominately relating to players' funds deposited at 30
June 2018, which increased in line with the International VIP Rebate volume.
1 Normalised results reflect the underlying performance of the business as they remove the inherent win rate volatility of the
International VIP Rebate business. Normalised results are adjusted using an average win rate of 1.35% of actual turnover.
2 Net debt is shown as interest bearing liabilities, less cash and cash equivalents, less net position of derivative financial instruments.
Derivative financial instruments reflect the position of currency swaps and interest rate hedges entered into for the Group's debt.
2
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 49
Directors' Report
for the year ended 30 June 2018
2.5. Segment operations
The Group comprises the following three operating segments:
• Sydney;
• Gold Coast; and
• Brisbane.
Refer to note A1 for more details of the financial performance of the Companyʼs operating segments. The activities and
drivers of the results for these operations are discussed below.
Sydney
Gross revenue was $1,736.7 million, up 3.0% on the pcp and EBITDA was $285.8 million, down 28.7% on the pcp.
Normalised EBITDA was $410.0 million, up 27.9% on the pcp.
Normalised gross revenue in Sydney was $1,874.7 million, up 17.5% on the pcp. Revenue increased due to higher
International VIP Rebate business volumes (up 56.7% on the pcp) and solid domestic revenue growth. Electronic
gaming machine market share increased in FY2018 with revenue in Q4 up 9.8% on pcp. Non-gaming cash revenue
was up 15.0% with increased hotel capacity following the hotel refurbishment and new food and beverage offerings.
Taxes, levies, rebates and commissions of $811.6 million were up 21.0% on the pcp as a result of higher International
VIP Rebate business volumes. Sydneyʼs average non-rebate tax rate was 32.0%, down from 32.6% in the pcp (top
marginal tax rate of 50.0% in both years). Operating expenditure of $639.3 million (up 4.1% on the pcp) was driven by
domestic and International VIP Rebate business volume growth, strong non-gaming volume growth and higher wage
rates, offset by continued cost management. Normalised EBITDA margin of 21.9% was up from 20.1% on the pcp.
The Sydney property is a Leadership Partner of City of Sydneyʼs Chinese New Year Festival, a proud participant in the
Sydney Gay and Lesbian Mardi Gras, and a Foundation Partner of the Australian Turf Club in addition to participating
in The Everest horse race. The Sydney property is also a sponsor of the Sydney Swans, New South Wales Rugby
League (NSW Blues) and Sydney FC.
The property also contributed to various charities during the period, including Barnardos Australia and Taronga
Conservation Society Australia.
Queensland (Gold Coast and Brisbane)
Gross revenue was $842.8 million up 12.9% on the pcp and EBITDA was $198.6 million, flat on the pcp. Normalised
EBITDA was $178.1 million, down 8.4% on the pcp.
Normalised gross revenue in Queensland was $820.0 million, up 10.5% on the pcp. Revenue increased due to higher
International VIP Rebate volumes, up 40.9% on the pcp. Queensland revenue increased with all business segments
contributing to growth. Non-gaming revenue was up 15.3% on the pcp, with customers responding favourably to
increased hotel capacity following The Star Gold Coast refurbishment, opening of The Darling hotel and new food and
beverage offerings.
Taxes, levies, rebates and commissions were up 28.4% on the pcp, driven by increased International VIP Rebate
business gaming through the period. Operating expenses of $398.9 million across the Queensland properties was up
11.8% on the pcp. This was driven by increased domestic and international volumes, newly commissioned
investments in the Gold Coast (The Darling and enlarged main gaming floor (MGF)) and higher wage rates, offset by
continued cost management. Normalised EBITDA margin of 21.7% was down from 26.2% on the pcp.
The Gold Coast property was the First Official Partner of the Gold Coast 2018 Commonwealth Games. During the year
the Gold Coast property became the official host of the TV Week Logie Awards and the named sponsor for the iconic
Magic Millions Raceday and Carnival.
The Brisbane property was a sponsor of the Brisbane Festival.
The Queensland properties also contribute to various charities and not-for-profit organisations including Surf Life
Saving Queensland and Cerebral Palsy League Queensland.
International VIP Rebate business
The results of the International VIP Rebate business are embedded in the segment performance overviews above. The
International VIP Rebate business turnover was $61.2 billion, up 54.3% on the pcp. The actual win rate of 1.16% was
below both the win rate for the pcp of 1.59% and the normalised rate of 1.35%. Normalised International VIP Rebate
business revenue was $826.7 million, up 51.8% on the pcp, compared to statutory revenue of $711.5 million (up
11.2% on the pcp).
3
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 50
Directors' Report
for the year ended 30 June 2018
2.6. Significant changes in the state of affairs and future developments
Other than those stated within this report, there were no significant changes in the state of affairs of the Group during
the financial year. The section below discusses the impact of key transactions and events that have taken place during
the reporting period.
Sydney
Sydney's casino licence continues until 2093 and includes exclusivity arrangements with the New South Wales
Government that support the operation of a single casino in NSW until November 2019.
The Group has previously disclosed a proposed investment for up to $1 billion (subject to various approvals) which
includes a new tower to be developed with joint venture partners CTF and FEC. The scale of the property is proposed
to be expanded to approximately 1,000 hotel rooms and residences (including The Ritz-Carlton hotel and luxury
residences), with signature gaming experiences including new and refurbished VIP suites and gaming salons, and
over 50 food and beverage offerings. The Groupʼs share of the proposed investment is expected to be approximately
$667 million (prior to the sale of any apartments).
Capital expenditure in the year was approximately $190 million, including the completion of the Astral Residences
refurbishment. The redevelopment of the Astral Lobby and Porte Cochere and the Sovereign Resorts expansion
continues.
Gold Coast
The Group currently holds a perpetual casino licence to operate The Star Gold Coast. The Group owns Broadbeach
Island on which the casino is located. The Group has previously disclosed a major redevelopment of the property of up
to $845 million capital spend, including a new tower with joint venture partners CTF and FEC. The construction cost of
the new tower is expected to be approximately $370 million. The Group officially opened The Darling, Gold Coast, a
new 6 star hotel on 22 March 2018. Construction has commenced on the first joint venture tower. Once developed, the
scale of the property under the masterplan is proposed to be expanded to approximately 1,400 hotel rooms and
residences with signature gaming facilities, over 20 restaurants and bars, and substantial resort facilities and
attractions. The Groupʼs share of the proposed investment is expected to be approximately $578 million (prior to the
sale of any apartments).
Progress on the redevelopment project includes the completion of The Darling, Gold Coast, a 6 star hotel, private
gaming room (Sovereign), VIP salons, level 19 dining, club and pool deck, MGF expansion and sports stadium. Capital
expenditure in the current year was approximately $260 million.
The Group also continues to manage the Gold Coast Convention and Exhibition Centre adjacent to the casino.
Brisbane
In November 2015 contractual close was reached between the Queensland Government and Destination Brisbane
Consortium (DBC) on the Queenʼs Wharf Brisbane development. DBCʼs Integrated Resort ownership structure
requires capital to be contributed 50% by the Group and 25% each by CTF and FEC. The Group will act as the
operator under a long dated casino management agreement.
The Group holds a perpetual casino licence in Queensland that is attached to the lease of the current Treasury site
that expires in 2070. Upon opening of the Integrated Resort, the Groupʼs casino licence will be surrendered and DBC
will hold a casino licence for 99 years including an exclusivity period of 25 years.
CTF and FEC will each contribute 50% of the capital to undertake the residential and related components of the
broader Queenʼs Wharf Brisbane development. The Group is not a party to the residential apartments development
joint venture.
Initial work on the Integrated Resort is on schedule and on budget, with demolition works completed and foundation
excavation work commenced. Approval of the Plan of Development was received during the year with an enlarged
gross floor area, expanding the podium and sky deck. Target total project costs are estimated to be approximately $2.4
billion, excluding Government payments and Treasury Brisbane repurposing costs, with increased capital return
expectations.
4
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 51
Directors' Report
for the year ended 30 June 2018
2.7. Risk management
The Group takes a structured approach to identifying, evaluating and managing those risks which have the potential to
affect achievement of strategic objectives. The commentary relating to Principle 7 in the Companyʼs Corporate
Governance Statement describes the Groupʼs risk management framework which is based on ISO31000, the
international standard on risk management. The Corporate Governance Statement can be viewed on the Companyʼs
website.
Details of the Groupʼs major risks and associated mitigation strategies are set out below. The mitigation strategies are
designed to reduce the likelihood of the risk occurring and/or to minimise the adverse consequences of the risk should
it happen. However, some risks are affected by factors external to, and beyond the control of, the Group.
Risk and description
Mitigation strategy
Competitive Position
The potential effect of increased competition
the Groupʼs key markets of Sydney,
in
Brisbane and the Gold Coast
Realising value from capital projects
The ability to generate adequate returns from
the
in capital
projects.
financial capital
invested
Human capital management
The ability to attract, recruit and retain the
right people
leadership and
operational roles.
key
for
Effective management of key stakeholders
The ability to engage with key stakeholders to
satisfy
interests without
the Groupʼs operations or
compromising
achievement of
strategic
objectives.
their competing
the Groupʼs
Geo-political and regulatory changes
The potential effect of political or regulatory
changes in Australia affecting the operation of
casinos, or the potential effect of changes in
the administration of laws in foreign countries
affecting the ability of foreign nationals to
travel to and/or bring funds to Australia.
the
to protect
Data and systems security and reliability
integrity of
The ability
confidential business or customer data which
is collected, used, stored, and disposed of in
the course of business operations, and the
ability to maintain the security and operating
reliability of key business systems.
The Groupʼs vision is to be Australiaʼs leading integrated resort
company. The Group is making substantial investments in developing
new or improved venue facilities in all key markets, diversifying
revenue sources and in improving the customer service capabilities
of employees.
The Group has implemented a comprehensive project management
framework and employed a number of appropriately skilled and
experienced project managers to reduce the risk of delays in
completion and/or overruns in costs of capital projects. The Group
has also developed plans to market and promote its portfolio of
attractive resort facilities to achieve the level of customer patronage
required to deliver the expected returns on investment.
The Group has in place a variety of avenues to attract, recruit and
develop high performing and high potential employees, including an
in-house talent acquisition team. The Group runs a number of training
and development programs to provide employees with career
development opportunities, and regularly conducts an employee
engagement survey to monitor for emerging issues which might affect
the ability to retain talented employees. The Groupʼs diversity and
inclusion programs are widely recognised as being among the best in
the industry.
The Group has developed strong communication lines with a variety
of stakeholder groups, including State governments in New South
Wales and Queensland, regulators in both States, investors, media
and unions. The Group has also developed partnerships with a
number of local community groups and charitable organisations.
The Group continuously monitors for potential legislative changes or
changes in relevant government policy in the States and countries in
which it conducts business operations. The Group also makes
representations to governments and industry groups to promote
effective, appropriate and consistent regulatory and policy outcomes.
The Group has a dedicated IT security function which continuously
tests and monitors our technology systems to detect and block
viruses and other threats to the security of our data. Employees are
regularly trained on the importance of maintaining effective cyber
security and data privacy processes.
5
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 52
Directors' Report
for the year ended 30 June 2018
Risk and description
Mitigation strategy
Major business disruption events
The ability to anticipate, prevent, respond to
and recover from events which have the
potential to prevent the continued operation of
one of its resort facilities, or which inhibit the
ability of guests being able to visit one of its
resort facilities for a sustained period of time.
People health and safety
The ability to operate the Groupʼs resort
facilities without affecting the safety, security
and wellbeing of its guests and employees.
Financial management
The ability to maintain financial performance
and a strong balance sheet which enables the
Group to fund future growth opportunities on
commercially acceptable terms.
Corporate governance
The ability to maintain a strong and effective
governance structure which supports a culture
of
and
compliance.
accountability,
transparency,
The Groupʼs business continuity
framework enables early
identification of material risks to the continued operation of a resort
facility. The framework is supported by a suite of emergency
response, crisis management, and disaster recovery plans that are
regularly tested and updated.
The Group takes a risk based approach to managing health and
safety. Critical safety risks have been identified with mitigation plans
in place. Dedicated health and safety and injury management
specialists are employed at each resort facility. To assist in
maintaining the safety and security of its guests and employees,
each resort facility employs a substantial number of security and
surveillance personnel to provide support in monitoring existential
threats and managing potential incidents on a real time basis.
The Group annually establishes a financial budget and 5 year plan
which underpin the setting of performance targets incorporated in
management incentive plans. Financial performance is continuously
monitored for any variations from annual financial budgets and
market expectations. The Groupʼs core business produces strong
cashflow, allowing the Group to maintain low to moderate levels of
debt while allowing shareholders to be paid dividends.
The Group has a well-defined governance framework which identifies
the roles and responsibilities of the Board, the Board Committees
and senior management. The Group also has a complementary set of
key policies, compliance with which is monitored on an ongoing
basis. The Group operates an integrated “3 lines of defence” model
to identify and manage key risks and to provide assurance that
critical controls are effective in managing those risks.
2.8. Environmental regulation and performance
The Group is committed to sustainability leadership in the entertainment sector and reducing resource consumption
across its operations.
The Group has in place a five-year Sustainability Strategy, 'Our Bright Future', which is focused on building business
capacity and delivering continuous improvement in the management of environmental, social and governance issues
(ESG). The Sustainability Strategy is aligned to the business strategy and groups ESG objectives and targets into four
key pillars:
• we strive to be Australia's leading integrated resort company;
• we actively support guest wellbeing;
• we attract, develop and retain talented teams; and
• we develop and operate world class properties.
The Sustainability Strategy is underpinned by a structured materiality assessment process that is conducted annually
to ensure ESG issues remain relevant. As part of the Groupʼs commitment to building world class properties, the
Group continues to target sustainable reductions in resource use through capital, and operational energy and water
improvement projects. To support this commitment, the Group has in place carbon and water targets to achieve a
30% reduction in carbon and water intensity by FY2023 against a baseline of FY2013 on a square meter basis. An
active energy and water project pipeline, first established in FY14, continues to monitor and track projects that deliver
cost and environmental benefits.
To ensure energy and water efficiency is achieved in refurbishment and development projects, the Groupʼs
Sustainable Design and Operational Standards have been applied to achieve greener building outcomes by specifying
energy efficient technologies and best practice water and waste management. Implementation of these Standards has
led to the Sydney property committing to obtaining a Green Star Performance Rating. The Companyʼs offices at 60
Union Street, Pyrmont are targeting a 5 Star Green Star Interiors Rating as part of the refurbishment process.
The Group retained the global leadership position of the Casino and Gaming Industry in the Dow Jones Sustainability
Index for the second year running. The Sydney property received the accolade as the winner of the Best
6
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 53
Directors' Report
for the year ended 30 June 2018
Environmental & Energy Efficiency Practice award at the Australian Hotels Association National Awards for
Excellence.
The Company is registered under the National Greenhouse Energy Reporting System (NGERS) and reports all energy
consumption and greenhouse gas emissions to the Federal Government every year. The Companyʼs Environmental
Management Policy, Sustainability Strategy, Materiality Assessment and Sustainable Design and Operational
Standards can be found on the Companyʼs website. Sustainability performance and progress against the Sustainability
Strategy is reported to the People, Culture and Social Responsibility Committee regularly.
3. Earnings per share (EPS)
Basic EPS for the financial year was 17.5 cents (2017: 32.0 cents), 45.3% down on the pcp as a result of the reduction
in net profit after tax attributable to ordinary shareholders and the increase in the number of shares, driven by the
placement share issue completed in April 2018. Diluted EPS was 17.5 cents (2017: 31.9 cents). EPS is disclosed in
note F3 of the Financial Report.
4. Dividends
4.1. Dividend payout
An interim dividend of 7.5 cents per share (fully franked) was paid on 22 March 2018.
A final dividend per share of 13.0 cents (fully franked) was declared, totalling 20.5 cents per share for the year, up
28.1% on the pcp and reflecting a payout ratio of 122% of statutory NPAT (70% of normalised NPAT) for the year
ended 30 June 2018.
4.2. Dividend Reinvestment Plan (DRP)
The Companyʼs DRP is in operation for the final dividend. The last date for receipt of election notices to enable
participation for the final dividend is 31 August 2018. The price at which shares are allocated under the DRP is the
daily volume weighted average market price of the Company's shares sold in the ordinary course of trading on the ASX
over a period of 10 trading days beginning on (and including) the fourth trading day after the Record Date (30 August
2018). Shares allocated under the DRP will rank equally with the Company's existing fully paid ordinary shares.
5. Significant events after the end of the financial year
On 16 August 2018, Destination Gold Coast Consortium (the Groupʼs 33% equal share joint venture with Chow Tai
Fook Enterprises Limited and Far East Consortium International Limited) entered into an agreement to commence
construction in relation to the first residential, hotel and retail tower in the Gold Coast. Destination Gold Coast
Consortiumʼs total commitment for development of the tower is $370 million, 8% lower than initial expectations.
Other than those events that have already been disclosed in this report or elsewhere in the Financial Report, there
have been no other significant events occurring after 30 June 2018 and up to the date of this report that have
materially affected or may materially affect the Groupʼs operations, the results of those operations or the Groupʼs state
of affairs.
7
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 54
Directors' Report
for the year ended 30 June 2018
6. Directors' qualifications, experience and special responsibilities
The details of the Company's Directors in office during the financial year and until the date of this report (except as
otherwise stated) are set out below.
Current Directors
John O'Neill AO
Chairman (from 8 June 2012); Non-Executive Director (from 28 March 2011)
Diploma of Law; Foundation Fellow of the Australian Institute of Company Directors
Experience:
John OʼNeill was formerly Managing Director and Chief Executive Officer of Australian
Rugby Union Limited, Chief Executive Officer of Football Federation Australia, Managing
Director and Chief Executive Officer of the State Bank of New South Wales, and Chairman
of the Australian Wool Exchange Limited.
Mr OʼNeill was also formerly a Director of Tabcorp Holdings Limited and Rugby World Cup
Limited.
Mr OʼNeill was also the inaugural Chairman of Events New South Wales, which flowed from
the independent reviews he conducted into events strategy, convention and exhibition
space, and tourism on behalf of the New South Wales Government.
Mr O'Neill is currently a member of the Advisory Council of China Matters.
Special Responsibilities:
Mr OʼNeill is Chairman of the Board and an ex-officio member of all Board committees.
Directorships of other Australian listed companies held during the last 3 years:
Nil
Matt Bekier
Managing Director and Chief Executive Officer (from 11 April 2014)
Executive Director (from 2 March 2011)
Master of Economics and Commerce; PhD in Finance
Experience:
Matt Bekier is a member of the Board of the Australasian Gaming Council.
Mr Bekier was previously Chief Financial Officer and Executive Director of the Company
and also previously Chief Financial Officer of Tabcorp Holdings Limited from late 2005 and
until the demerger of the Company and its controlled entities in June 2011.
Prior to his role at Tabcorp, Mr Bekier held various roles with McKinsey & Company.
Special Responsibilities:
Nil
Directorships of other Australian listed companies held during the last 3 years:
Nil
8
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 55
Directors' Report
for the year ended 30 June 2018
Current Directors
Gerard Bradley
Ben Heap
Non-Executive Director (from 30 May 2013)
Bachelor of Commerce; Diploma of Advanced Accounting; Fellow of the Institute of
Chartered Accountants; Fellow of CPA Australia; Fellow of the Australian Institute of
Company Directors; Fellow of the Australian Institute of Managers and Leaders
Experience:
Gerard Bradley is the Chairman of Queensland Treasury Corporation and related
companies, having served for 14 years as Under Treasurer and Under Secretary of the
Queensland Treasury Department. He has extensive experience in public sector finance in
both the Queensland and South Australian Treasury Departments.
Mr Bradley has previously served as Chairman of the Board of Trustees at QSuper. His
previous non-executive board memberships also
include Funds SA, Queensland
Investment Corporation, Suncorp (Insurance & Finance), Queensland Water Infrastructure
Pty Ltd, and South Bank Corporation.
Mr Bradley is currently a Non-Executive Director of Pinnacle Investment Management
Group Limited and a Director of the Winston Churchill Memorial Trust.
Special Responsibilities:
• Chair of the Risk and Compliance Committee
• Member of the Audit Committee (Acting Chair from 1 November 2017 to 22 May 2018)
• Member of the Investment and Capital Expenditure Review Committee
• Member of the Remuneration Committee (to 1 February 2018)
Directorships of other Australian listed companies held during the last 3 years:
• Pinnacle Investment Management Group Limited (1 September 2016 to present)
Non-Executive Director (from 23 May 2018)
Bachelor of Commerce (Finance); Bachelor of Science (Mathematics)
Experience:
Ben Heap has wide-ranging experience and expertise in asset and capital management as
well as financial technology and digital businesses.
Mr Heap is a Founding Partner of H2 Ventures, a financial technology, data and artificial
intelligence focused venture capital investment firm and a Non-Executive Director of several
high growth companies. He is also a member of the Australian Commonwealth
Government's Fintech Advisory Group.
Mr Heap was previously Managing Director and the Head of Australasia for UBS Global
Asset Management and prior to this, Head of Infrastructure for UBS Global Asset
Management in the Americas. He also held a number of directorships associated with these
roles and was a Non-Executive Director of the Financial Services Council from 2011 to
2013. Earlier in his career, Mr Heap was Group Executive, E-Commerce & Corporate
Development for TAB Limited.
Special Responsibilities:
• Member of the Risk and Compliance Committee
• Member of the Remuneration Committee
• Member of the People, Culture and Social Responsibility Committee
Directorships of other Australian listed companies held during the last 3 years:
Nil
9
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 56
Directors' Report
for the year ended 30 June 2018
Current Directors
Katie Lahey AM
Sally Pitkin
Non-Executive Director (from 1 March 2013)
Bachelor of Arts (First Class Honours); Master of Business Administration
Experience:
Katie Lahey has extensive experience in the retail, tourism and entertainment sectors and
previously held chief executive roles in the public and private sectors.
Ms Lahey is currently the Chair of Tourism & Transport Forum and Executive Chairman
Australasia for Korn Ferry International.
Ms Lahey was previously the Chair of Carnival Australia and also a member of the boards
of David Jones Limited, Australia Council Major Performing Arts, Hills Motorway Limited,
Australia Post and Garvan Research Foundation.
Special Responsibilities:
• Chair of the People, Culture and Social Responsibility Committee
• Member of the Remuneration Committee
• Member of the Risk and Compliance Committee
Directorships of other Australian listed companies held during the last 3 years:
Nil
Non-Executive Director (from 19 December 2014)
Doctor of Philosophy (Governance); Master of Laws; Bachelor of Laws; Fellow of the
Australian Institute of Company Directors
Experience:
Sally Pitkin is a Queensland based company director and lawyer with extensive corporate
experience and over 20 yearsʼ experience as a Non-Executive Director and board member
across a wide range of industries in the private and public sectors.
Dr Pitkin is currently Chairman of Super Retail Group Limited and a Non-Executive Director
of Link Administration Holdings Limited. She is also a member of the National Board of the
Australian Institute of Company Directors.
Special Responsibilities:
• Chair of the Remuneration Committee
• Member of the Audit Committee
• Member of the People, Culture and Social Responsibility Committee
Directorships of other Australian listed companies held during the last 3 years:
• Super Retail Group Limited (1 July 2010 to present)
• Link Administration Holdings Limited (23 September 2015 to present)
• Billabong International Limited (28 February 2012 to 15 August 2016)
• IPH Limited (23 September 2014 to 20 November 2017)
10
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 57
Directors' Report
for the year ended 30 June 2018
Current Directors
Richard Sheppard
Zlatko
Todorcevski
Non-Executive Director (from 1 March 2013)
Bachelor of Economics (First Class Honours); Fellow of the Australian Institute of Company
Directors
Experience:
Richard Sheppard has had an extensive executive career in the banking and finance sector
including an executive career with Macquarie Group Limited spanning more than 30 years.
Mr Sheppard was previously the Managing Director and Chief Executive Officer of
Macquarie Bank Limited and chaired the boards of a number of Macquarieʼs listed entities.
He has also served as Chairman of the Commonwealth Governmentʼs Financial Sector
Advisory Council.
Mr Sheppard is currently the Chairman and a Non-Executive Director of Dexus Property
Group and a Non-Executive Director of Snowy Hydro Limited. He is also a Director of the
Bradman Foundation.
Special Responsibilities:
• Chair of the Investment and Capital Expenditure Review Committee
• Member of the Audit Committee
• Member of the Risk and Compliance Committee
Directorships of other Australian listed companies held during the last 3 years:
• Dexus Property Group (1 January 2012 to present)
Non-Executive Director (from 23 May 2018)
Bachelor of Commerce (Accounting); Masters of Business Administration; Fellow of CPA
Australia; Fellow of Governance Institute of Australia
Experience:
Zlatko Todorcevski is an experienced executive with over 30 years' experience in the oil and
gas, logistics and manufacturing sectors. He has a strong background in corporate strategy
and planning, mergers and acquisitions, and strategic procurement. He also has deep
finance expertise across capital markets, investor relations, accounting and tax.
Mr Todorcevski was previously the Chief Financial Officer of Brambles Limited. Prior to that,
he was Chief Financial Officer of Oil Search Limited and the Chief Financial Officer for
Energy at BHP.
Mr Todorcevski is currently Chairman of Adelaide Brighton Limited and a member of the
Council of the University of Wollongong.
Special Responsibilities:
• Chair of the Audit Committee
• Member of the Risk and Compliance Committee
• Member of the Investment and Capital Expenditure Review Committee
Directorships of other Australian listed companies held during the last 3 years:
• Adelaide Brighton Limited (22 March 2017 to present)
11
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 58
Directors' Report
for the year ended 30 June 2018
Former Director
Greg Hayes
Non-Executive Director (from 24 April 2015 to 26 October 2017)
Master of Applied Finance; Graduate Diploma in Accounting; Bachelor of Arts; Advanced
Management Programme (Harvard Business School, Massachusetts); Member of Institute
of Chartered Accountants
Experience:
Greg Hayes is an experienced executive and director having worked across a range of
industries including energy, infrastructure and logistics. Mr Hayes brings to the Board skills
and experience in the areas of strategy, finance, mergers and acquisitions, and strategic
risk management, in particular in listed companies with global operations. He is currently a
Director of Precision Group, Aurrum Holdings Pty Ltd and Home Investment Consortium
Company Pty Ltd.
Mr Hayes was previously Chief Financial Officer and Executive Director of Brambles
Limited, Chief Executive Officer & Group Managing Director of Tenix Pty Ltd, Chief
Financial Officer and later interim CEO of the Australian Gaslight Company (AGL), Chief
Financial Officer Australia and New Zealand of Westfield Holdings, and Executive General
Manager, Finance of Southcorp Limited.
Special Responsibilities:
• Chair of the Audit Committee
• Member of the Investment and Capital Expenditure Review Committee
• Member of the Risk and Compliance Committee
Directorships of other Australian listed companies held during the last 3 years:
• Incitec Pivot Limited (1 October 2014 to 21 December 2017)
7. Directors' interests in securities
At the date of this report (except as otherwise stated), the Directors had the following relevant interests in the
securities of the Company:
Name
Performance Rights
Ordinary Shares
Current
John O'Neill AO
Matt Bekier
Gerard Bradley
Ben Heap a
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Zlatko Todorcevski a
Former
Greg Hayes b
78,926
748,702
40,000
20,000
36,907
45,900
100,000
50,000
10,000
Nil
1,781,478
Nil
Nil
Nil
Nil
Nil
Nil
Nil
a
b
Appointed as a Non-Executive Director on 23 May 2018.
Ceased as Non-Executive Director on 26 October 2017. The number of The Star Entertainment Group Limited securities
disclosed above was applicable at the time of cessation.
8. Company Secretary
Paula Martin holds the position of Group General Counsel and Company Secretary. She holds a Bachelor of Business
(Int. Bus.) and a Bachelor of Laws and a Graduate Diploma in Applied Corporate Governance. She has extensive
commercial legal experience having worked with King & Wood Mallesons (formerly Mallesons Stephen Jaques) prior to
joining the Company. Ms Martin is a member of the Queensland Law Society, Association of Corporate Counsel
(Australia) and the Governance Institute of Australia.
12
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 59
Directors' Report
for the year ended 30 June 2018
9. Board and Committee meeting attendance
During the financial year ended 30 June 2018, the Company held 9 meetings of the Board of Directors (including one
unscheduled meeting which was attended by all Directors). The numbers of Board and Committee meetings attended
by each of the Directors during the year are set out in the table below.
Investment &
Capital
Expenditure
Review
Committee
A B A B A B A B A B A B
People, Culture
& Social
Responsibility
Committee
Risk and
Compliance
Committee
Remuner-
ation
Committee
Audit
Committee
Board of
Directors
9
9
9
4
9
9
9
4
4
9
9
9
1
9
9
9
1
4
4
-
4
2
-
3
4
3
-
4
-
4
1
-
4
4
1
-
4
-
4
2
4
4
4
3
1
4
-
4
1
4
-
4
1
1
5
-
3
2
5
5
1
2
1
5
-
3
1
5
5
-
-
-
4
-
1
3
4
3
-
2
-
4
-
-
-
4
4
-
-
-
4
-
4
2
3
4
4
3
1
4
-
4
-
-
-
4
1
1
Directors
John O'Neill AO
Matt Bekier c
Gerard Bradley
Ben Heap
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Zlatko Todorcevski
Former
Greg Hayes
A - Number of meetings attended as a Director, Committee member or Observer.
B - Maximum number of meetings available for attendance as a Board or Committee member.
c
The Managing Director and Chief Executive Officer is not a member of any Board Committee but may attend Board
Committee meetings upon invitation. This attendance is not recorded here.
Details of the functions and memberships of the Committees of the Board and the terms of reference for each Board
Committee are available from the Corporate Governance section of the Companyʼs website.
10.
Indemnification and insurance of Directors and Officers
The Directors and Officers of the Company are indemnified against liabilities pursuant to agreements with the
Company. The Company has entered into insurance contracts with third party insurance providers, in accordance with
normal commercial practices. Under the terms of the insurance contracts, the nature of the liabilities insured against
and the amount of premiums paid are confidential.
11.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young during or since the end of the financial year.
12. Non-audit services
Ernst & Young, the external auditor to the Company and the Group, provided non-audit services to the Company
during the financial year ended 30 June 2018. The Directors are satisfied that the provision of non-audit services
during this period was compatible with the general standard of independence for auditors imposed by the Corporations
Act 2001 (Cth). The nature and scope of each type of non-audit service provided did not compromise auditor
independence. These statements are made in accordance with advice provided by the Audit Committee.
The Audit Committee reviews the activities of the independent external auditor and reviews the auditorʼs performance
on an annual basis.
Limited authority is delegated to the Company's Group Chief Financial Officer for the pre-approval of audit and non-
audit services proposed by the external auditor, limited to $50,000 per engagement and capped at 40% of the relevant
year's audit fee. Delegated authority is only exercised in relation to services that are not in conflict with the role of
statutory auditors, where management does not consider the services to impair the independence of the external
auditor and the external auditor has confirmed that the services would not impair their independence. Any other non-
audit related work to be undertaken by the external auditor must be approved by the Chair of the Audit Committee.
Further details relating to the Audit Committee and the engagement of auditors are available in the Corporate
Governance Statement.
13
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 60
Directors' Report
for the year ended 30 June 2018
Ernst & Young, acting as the Companyʼs external auditor, received or is due to receive the following amounts in
relation to the provision of non-audit services to the Company:
Description of services
Other assurance related services in relation to the Company and any other entity in the
consolidated group
Other non-audit services including taxation services
Total of all non-audit and other services
$000
22.0
116.3
138.3
Amounts paid or payable by the Company for audit and non-audit services are disclosed in note F11 of the Financial
Report.
13. Rounding of amounts
The Star Entertainment Group Limited is a company of the kind specified in the Australian Securities and Investments
Commissionʼs ASIC Corporations (Rounding in Financial/Directorsʼ Reports) Instrument 2016/191. In accordance with
that Instrument, amounts in the Financial Report and the Directorsʼ Report have been rounded to the nearest hundred
thousand dollars unless specifically stated to be otherwise.
14. Auditor's independence declaration
Attached is a copy of the auditor's independence declaration provided under section 307C of the Corporations Act
2001 (Cth) in relation to the audit of the Financial Report for the year ended 30 June 2018. The auditor's independence
declaration forms part of this Directorsʼ Report.
This report has been signed in accordance with a resolution of Directors.
John O'Neill AO
Chairman
Sydney
24 August 2018
14
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 61
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditors Independence Declaration to the Directors of The Star
Entertainment Group
As lead auditor for the audit of The Star Entertainment Group for the financial year ended 30 June
2018, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of The Star Entertainment Group and the entities it controlled during the
financial year.
Ernst & Young
Megan Wilson
Partner
24 August 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
15
DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018
62
THE STAR ENTERTAINMENT GROUP
REMUNERATION REPORT
(AUDITED)
FOR THE YEAR ENDED 30 JUNE 2018
THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES
Remuneration Report (audited)
For the year ended 30 June 2018'
Introduction from the Remuneration Committee Chair
Dear Shareholder,
63
'
On behalf of the Board, I am pleased to present the Remuneration Report for the year ended 30 June 2018 (FY18). This
report is prepared on a consistent basis to the previous year for ease of reference.
2017 Annual General Meeting (AGM)
The FY17 Remuneration Report received positive shareholder support at the 2017 AGM, with 98.95% of votes in favour
of the resolution.
At the 2017 AGM, shareholders approved a grant to the Managing Director and Chief Executive Officer of performance
rights under the Long Term Performance Plan (LTPP). His total remuneration for FY18 was unchanged from the prior year.
His at risk remuneration comprises more than 70% of his total target annual reward.
FY18 Performance and Incentive Outcomes
The Group delivered Normalised Net Profit after Tax (NPAT) of $258.1 million, 20.3% above the prior comparable period
(pcp) and 12.2% above the target set by the Board at the beginning of the performance period for the Short Term
Performance Plan (STPP).
Statutory NPAT of $148.1 million was 44.0% below the pcp largely due to the adverse win rate in the International Rebate
Business and significant items of $52.4 million before tax, relating to debt restructuring costs ($42.9 million) and costs
associated with the pre-opening of the new hotel on the Gold Coast ($9.5 million). Total dividends paid to shareholders in
FY18 were 20.5 cents per share, up 28.1% on the pcp.
While the Group achieved both its financial and non-financial targets under the STPP, only 85% of the total target pool was
crystallised for payment following varying levels of performance of the respective divisions and business units. Further
details are provided in section 3.4 of this report.
The FY14 award under the Long Term Performance Plan (LTPP) was tested for vesting during the period and 461,198
performance rights (granted to executives for the financial year ended 30 June 2014), vested in their entirety as both
performance hurdles were met. This was the first LTPP award that comprised 50% Earnings per Share (EPS) and 50%
Relative Total Shareholder Return (TSR) hurdles.
For the FY18 LTPP, the Board approved the introduction of a third performance hurdle, namely Return on Invested Capital
(ROIC), alongside EPS and TSR. ROIC was introduced to create alignment of the long term incentive plan in driving the
execution of the Company’s capital intensive strategy to build new assets and improve existing properties, with the aim of
generating additional revenue and ultimately sustainable value for shareholders.
Future events
The FY15 LTPP is due to be tested for vesting in September 2018. The LTPP award comprises 50% EPS and 50% TSR
hurdles. Details on vesting outcomes will be provided ahead of the 2018 AGM.
We thank you for your support in FY18 and welcome your feedback on our Remuneration Report.
Yours sincerely,
'
Sally Pitkin
Remuneration Committee Chair
'
'
'
'
16
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 64
Remuneration Report (audited)
For the year ended 30 June 2018
Summary for FY18
Remuneration
Reviews
In accordance with the Reward Strategy, the Company annually assesses the remuneration levels
and mix for Executives to identify where adjustments are appropriate based on market benchmarking
against relevant peer groups. The Company considers companies with a market capitalisation within
the range of 70%-160% of The Star Entertainment Groups market capitalisation and appropriate
gaming and entertainment peers. Following the annual remuneration review completed in September
2017, no changes were made to the Managing Director and Chief Executive Officers total annual
reward for FY18. The average total annual reward increases for senior executives was 5%, with the
majority of the increases being to the long term variable pay component of their remuneration to align
more closely with the target benchmarks and shareholder interests.
Further details on Executive employment arrangements are provided in Table 9.
For FY19, the Board has approved an increase of 2% to the Managing Director and Chief Executive
Officers fixed remuneration and short-term incentive. There were no changes to his LTPP award.
The average total annual reward increase for senior executives was 3.3% for FY19.
Short Term
Performance
Plan (STPP)
Payments under the STPP only accrue if the financial performance gateway for Normalised Net Profit
After Tax (NPAT) for the Group is met. As the financial performance for FY18 of $258.1 million was
above the target of $230.1 million, set by the Board at the commencement of performance period,
incentives accrued to Executives in FY18. The Managing Director and Chief Executive Officer
received 97% of his target short term incentive. Senior executives received an average of 85% of
their STI target. This was in line with the overall Group average payout of 85% of target. Further
details are provided in section 3.4 of this report.
Long Term
Performance
Plan (LTPP)
Performance rights relating to the FY14 LTPP were tested in October 2017. The TSR performance of
the Group was 113.5%, with a percentile ranking of 85.9. As this was above the 50th percentile
required for vesting, the TSR component of the FY14 Grant vested. The EPS performance for FY17
was 24.9 cents and was above the target of 21.8 cents approved by the Board. Accordingly, 100%
of the EPS component of the FY14 Grant vested.
The FY15 LTPP grant is due for testing in September 2018 and comprises an EPS and TSR
performance hurdle. An update will be provided to shareholders ahead of the 2018 AGM.
For FY18, the Company introduced a third performance hurdle, namely ROIC. The performance
hurdles are weighted 33.3% for TSR, 33.3% for EPS and 33.4% for ROIC.
Non-Executive
Director fees
There were no changes to base NED fees for FY18. There was one increase to align the Investment
& Capital Expenditure Review Committee fees to those of the Audit, Risk & Compliance and
Remuneration Committees. For FY19, the Board approved an increase of 2% to Board member fees
(including the fees for the Chairman of the Board). The fees for the Chair and members of the People,
Culture and Social Responsibility Committee will be increased to align with the fees for other
committees in FY19. There will not be any changes to the Non-Executive Directors fee pool limit of
$2.5 million per annum.
17
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP
Remuneration Report (audited)
For the year ended 30 June 2018
This Remuneration Report is comprised of the following sections:
Contents
CONTENTS
1. Key Management Personnel ..................................................................................................................... 18
1. Key Management Personnel
2. Remuneration Governance ....................................................................................................................... 19
65
2. Remuneration Governance
66
3. Remuneration Strategy and Reward Programs ......................................................................................... 19
3. Remuneration Strategy and Reward Programs
66
4. Executive Contracts and Remuneration .................................................................................................... 29
4. Executive Contracts and Remuneration
76
5. Statutory Executive Remuneration ............................................................................................................ 30
5. Statutory Executive Remuneration
77
5. Statutory Executive Remuneration cont. ................................................................................................... 31
6. NED Remuneration
79
6. NED Remuneration ................................................................................................................................... 32
7. Other information
80
7. Other information ...................................................................................................................................... 33
The Directors of The Star Entertainment Group Limited (The Star Entertainment Group or the Company) have approved
this Remuneration Report for the consolidated entity comprising the Company and its controlled entities (collectively
referred to as the Group) in respect of the financial year ended 30 June 2018.
This Remuneration Report outlines the remuneration arrangements for Key Management Personnel (KMP) who are
defined as those persons having authority and responsibility for planning, directing and controlling the major activities of
the Group, directly or indirectly, including any director (whether executive or otherwise) of The Star Entertainment Group
Limited. This report has been prepared in accordance with the requirements of the Corporations Act 2001(Cth) (the
Corporations Act) and its regulations. The information has been audited as required by section 308(3C) of the
Corporations Act where indicated.
For purposes of this report, the term Executives means the executive director (Managing Director and Chief Executive
Officer) and senior executives (the Group Chief Financial Officer and the Managing Directors of The Star Sydney and
Queensland properties), but excludes Non-Executive Directors (NEDs).
1. Key Management Personnel
The names and titles of the Companys KMP for the year ended 30 June 2018 are set out below. KMP were in office for
the entire duration of the financial year, with the exception of Greg Hayes, Zlatko Todorcevski and Ben Heap. There have
been no changes to KMP since the end of the financial year.
Non-Executive Directors
Position
John ONeill AO
Gerard Bradley
Greg Hayes (i)
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Zlatko Todorcevski (ii)
Ben Heap (iii)
Executives
Matt Bekier
Chad Barton
Greg Hawkins
Geoff Hogg
Chairman and Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Managing Director and Chief Executive Officer
Group Chief Financial Officer
Managing Director, The Star Sydney
Managing Director, Queensland
(i) Greg Hayes retired as a Non-Executive Director on 26 October 2017 following the 2017 Annual General Meeting.
(ii) On 23 October 2017, the Company announced the proposed appointment of Zlatko Todorcevski as a Non-Executive Director,
subject to regulatory approvals being obtained. Mr Todorcevski commenced as a Non-Executive Director on 23 May 2018.
(iii) On 18 December 2017, the Company announced the proposed appointment of Ben Heap as a Non-Executive Director, subject to
regulatory approvals being obtained. Mr Heap commenced as a Non-Executive Director on 23 May 2018.
65
18
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018
66
Remuneration Report (audited)
For the year ended 30 June 2018
2. Remuneration Governance
The Remuneration Committee (the Committee) considers matters relating to the remuneration of KMP as well as the
remuneration policies of the Group generally. This includes reviewing and recommending to the Board, the remuneration
of Executives and of the Chairman and NEDs. The main responsibilities of the Committee are outlined in the Remuneration
Committee Terms of Reference, available on
the Companys
website: https://www.starentertainmentgroup.com.au/corporate-governance/.
the corporate governance page of
Under the Remuneration Committee Terms of Reference, the majority of Committee members must be independent non-
executive directors and the Chair of the Committee must be an independent non-executive director. All members of the
Remuneration Committee (including the Chair of the Committee) are independent non-executive directors. Details of
members of the Committee and their background are included in the Directors Report on pages 8 to 12.
Use of remuneration advisors
The Committee seeks external advice from time to time to ensure it is fully informed when making remuneration decisions.
Remuneration advisors are engaged by, and report directly to, the Committee. PricewaterhouseCoopers (PwC) are the
Groups appointed independent external remuneration consultants. No remuneration recommendations as defined by the
Corporations Act were provided by PwC during FY18.
Remuneration Report approval at 2017 Annual General Meeting (AGM)
The FY17 Remuneration Report received positive shareholder support at the 2017 AGM, with 98.95% of votes in favour
of the resolution.
Gender pay equity
The Group is committed to ensuring all employees are remunerated fairly and equitably. The Group conducts annual
gender pay equity reviews that are presented to the Remuneration Committee. No significant gaps were identified during
FY18.
3. Remuneration Strategy and Reward Programs
The remuneration strategy at The Star Entertainment Group is designed to support a high performance culture, achieve
superior performance and as a result, sustainable value for shareholders. The reward programs are designed to promote
individual accountability and entrepreneurship in employees and are aligned to Company values, prudent risk taking and
the Companys long term financial soundness.
To achieve these objectives, the key reward principles are shaped around:
x Being market competitive to attract and retain high performing individuals (refer section 3.1 fixed remuneration),
x Paying above market for superior performance behaviours (variable at risk remuneration) that drive sustainable
value for shareholders (refer section 3.2 variable (at risk) remuneration),
x Delivering a meaningful quantum of awards in equity to create alignment with shareholder interests and manage
risk, and
x
Linking remuneration components and outcomes to the achievement of the Groups strategic priorities.
Total Annual Reward (TAR) is comprised of a fixed and a variable component. The variable component includes both a
short term and long term incentive opportunity. The Group balances the level of fixed versus variable remuneration based
on the industrys market for talent, the views of shareholders and the need for effective reward mechanisms to connect
short and long-term performance against the Groups strategic priorities.
Fixed remuneration and total target remuneration (fixed remuneration plus variable remuneration) is targeted at the median
of the relevant market, with an opportunity to earn above median pay, up to the 75th percentile, where higher levels of
performance are realised.
19
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP
Remuneration Report (audited)
For the year ended 30 June 2018
Table 1 illustrates the components of Executives Total Annual Reward (TAR) opportunity and how these are linked to the
strategic objectives of the Group.
Table 1: Components of Executives’ TAR Opportunity
Component
Delivery
Link to strategy and performance measures
Performance period
Cash (including
superannuation)
(100% of fixed
remuneration is
cash)
Fixed
Remuneration
x MD and CEO
27% of TAR
x Senior
executives
45% of TAR
(average)
Fixed remuneration forms an integral component of
the overall employee value proposition at The Star
Entertainment Group, designed to attract and retain
the talented teams required to operate the business.
These teams will be critical in delivering on our
business plan to achieve excellence in guest service,
build and operate world class properties, thereby
creating long term shareholder value.
Annual pay reviews
occur in August each
year with remuneration
changes effective from
1 September.
Short term
incentive (STI)
x MD and CEO
27% of TAR
Cash
(2/3 award)
x MD and CEO
18% of TAR
x Senior
x Senior
executives 19%
of TAR
Restricted Shares
(1/3 award) (vested
equity instruments
subject to a holding
lock. Participant
receives dividends
and voting rights
during the lock up
period)
Equity
x MD and CEO
9% of TAR
x Senior
executives 9%
of TAR
Performance
rights (zero
exercise price
options)
executives
28% of TAR
(average)
Long term
incentive (LTI)
x MD and CEO
46% of TAR
x Senior
executives
27% of TAR
(average)
Short term performance
is assessed over a
12 month performance
period (1 July to 30
June). Cash payments (if
any) are made in
September.
Restricted shares are
acquired in September
and subject to a 12
month holding lock and
retention period.
term
Incentive plans are designed to drive the execution
of the business plan in the short and long term and
aligns performance outcomes to shareholder value
creation.
Short
targets are
incentive performance
underpinned by the Groups strategic priorities that
include1:
ż excellence in guest service
ż leadership in loyalty
ż world class properties
ż talented teams
ż shareholder value
A financial gateway is in place to determine any
payments under the short term incentive plan and
the overall size of the bonus pool. The size of the
pool
to consider non-financial
performance, including measures such as guest
service and safety.
Individual payments are performance based and
assessed using a weighted balanced scorecard
approach.1
Outcomes are capped at 150% of the target amount.
is moderated
Long term incentives are designed to reward
Executives for their contributions towards achieving
the Groups strategic priorities orientated around the
achievement of sustainable shareholder value
creation.
Performance is measured against three criteria:
ż Relative Total Shareholder Return (TSR)
ż Earnings per Share (EPS)
ż Return on Invested Capital (ROIC)
These measures are used as they are aligned to
shareholder interests, business performance and
returns on capital developments, and collectively
drive the creation of sustainable shareholder value.
Equity awards are
granted annually in
September / October
(subject to shareholder
approval for the MD and
CEO) and subject to a
four year vesting period.
Performance against
targets is tested at the
end of the four year
period and there is no
retesting of awards.
Total Annual
Remuneration
(TAR)
Total annual remuneration is targeted at the median of the relevant market with an opportunity to earn
above median pay, up to the 75th percentile, where higher levels of performance are realised.
Benchmark peer groups include comparable ASX-listed organisations, determined based on similar
market capitalisation (range 70% to 160% of The Star Entertainment Groups market capitalisation)
as well as appropriate gaming and entertainment peers).
1 Refer Figure 3 and table 4 for details of measures used to assess performance
67
20
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018
68
Remuneration Report (audited)
For the year ended 30 June 2018
3.1 Fixed remuneration
The fixed remuneration received by Executives may include base salary, superannuation and non-monetary benefits. The
amount of fixed remuneration an Executive receives is based on the following:
x Scope and responsibilities of the role,
x Reference to the level of remuneration paid to Executives of comparable ASX-listed organisations, with similar
market capitalisation (range 70% to 160% of The Star Entertainment Groups market capitalisation) and
appropriate gaming and entertainment peers, and
x
Level of international and domestic gaming knowledge, skills and experience of the individual.
Fixed remuneration is reviewed annually, and the policy is to target fixed remuneration at the median of the market. Fixed
remuneration may deviate from the market median depending on individual capabilities and other business factors.
3.2 Variable (at risk) remuneration
The Star Entertainment Group has two variable reward programs designed to drive performance and execution of the
Board approved business plan to ultimately deliver superior returns and long-term value creation for shareholders. They
are the Short Term Performance Plan (STPP) and the Long Term Performance Plan (LTPP). Further details of these two
programs are set out in sections 3.3 and 3.5 respectively.
Figure 1 illustrates the remuneration mix for the Managing Director and Chief Executive Officer and senior executives (the
Chief Financial Officer and the Managing Directors of The Star Sydney and the Queensland properties) respectively.
Figure 1: Remuneration mix for FY18
Deferred
Equity
55%
Cash
45%
LTI
46%
STI Deferred
STI Cash
Fixed
9%
18%
27%
Cash vs.
Deferred Equity
73%
At Risk
27%
Fixed
Fixed vs.
At Risk
Managing Director and Chief Executive Officer
Total Target Annual Reward
Deferred
Equity
36%
LTI
STI Deferred
27%
9%
19%
STI Cash
Cash
64%
Fixed
45%
Cash vs.
Deferred Equity
55%
At Risk
45%
Fixed
Fixed vs.
At Risk
Managing Director The Star - Sydney
Managing Director Queensland
Chief Financial Officer
Total Target Annual Reward
21
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP
Remuneration Report (audited)
For the year ended 30 June 2018
3.3 Short Term Performance Plan Design
The STPP is designed to reward Executives for execution of the Groups strategy during the performance period.
Payments only accrue under the plan if the Group achieves its financial performance gateway, thereby aligning to
shareholder interests and achieving a direct link between pay and performance (refer Figure 2). Payments are further
moderated based on satisfactory performance against key non financial performance indicators. Individual payments are
performance based and assessed using a weighted balanced scorecard approach (refer Figure 3). The Board retains
overarching discretion to adjust outcomes as deemed appropriate.
As the Group achieved the financial performance gateway for FY18, incentives accrued under the STPP for FY18. Bonus
awards ranged from 0%-150% of participants target award. The average short term incentive award was 85% of target
(refer Figure 2).
The number of employees who participated in the STPP for FY18 was 783 (increased from 692 for FY17).
Table 2 sets out the key features of the STPP, all of which are consistent with the prior year.
Table 2: Key design features of the STPP
Purpose
To reward Executives for execution of the Groups strategy during the performance period.
Gateway
The minimum level of financial performance required before any incentives accrue under the STPP is referred to as the
gateway. The gateway hurdle is 95% of the budgeted Normalised1 NPAT of the Group as approved by the Board. This
gateway applies to all Executives and other participants in the plan. The Board may use its discretion to make payments
to reward for significant non-financial performance.
Pool size
The pool size is determined by the Board through an assessment of Group performance, including:
1. Financial performance (Normalised NPAT)
0% of target pool vests at below 95% of budgeted NPAT
50% of target pool vests at 95% of budgeted NPAT
100% of target pool vests at 100% of budgeted NPAT
150% of target pool vests at 110% of budgeted NPAT
2. Non-financial performance measures and strategic priorities (Guest Service and Safety).
Opportunities are based on the Executives incentive target in their employment contract (refer Table 9).
The payment range available is 0%-150% of the Executives incentive target.
Incentive
opportunity
levels
Payment
calculation
Individual performance is determined by using a weighted scorecard of measures (Figure 3) to arrive at a performance
rating. Performance ratings link to payment ranges as follows:
5 = Outstanding (125 150% of target)
4 = Exceeds (100 125% of target)
3 = Meets (75 100% of target)
2 = Meets some (0 75% of target)
1 = Did not meet (0% of target)
An Executives individual STI award is based on the following calculation:
Fixed
Remuneration
x
Individual
Target STI %
x
Group
Performance
Multiplier %
(0-150%)
x
Individual
Performance
Multiplier %
(0-150%)
Individual STI
award
(capped at
150% x
target)
Payments are capped at 150% of the Executives STPP target. Where performance and/or behaviours have been
deemed unsatisfactory, no incentives are awarded.
Delivery of
payments
(including
deferrals)
Clawback
Two-thirds of payments are delivered in cash in September.
One-third of all payments are held in restricted shares for a period of twelve months from the date of the award. These
shares are forfeited in the event that the Executive voluntarily terminates from the Group. Executives are entitled to
receive dividends and have voting rights during the restriction period, however they are unable to vote on remuneration
resolutions at the AGM.
Incentives may be clawed back where there has been a material misrepresentation of the financial outcomes on which
the payment had been assessed and/or the Executives actions have been found to be fraudulent, dishonest or in breach
of the Groups Code of Conduct (e.g. misconduct). This provision may extend up to the prior three financial years of
STPP payments.
i Normalised results reflect the underlying performance of the business as they remove the inherent volatility of the International VIP Rebate business and
exclude significant items that are considered by their nature and size unusual or not in the ordinary course of business. This methodology has been
consistently applied since FY12.
69
22
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018
70
Remuneration Report (audited)
For the year ended 30 June 2018
3.4 Reward Outcomes under STPP
In determining whether any incentives are being paid and the size of the incentive pool, the Board considers both financial
and non-financial performance against targets.
x
Financial performance
The financial performance measure driving the size of the STPP pool is Normalised NPAT of the Group.
Figure 2 shows the Companys reported Normalised NPAT relative to target over the last five financial years and the
percentage of STIs awarded relative to the on target amount.
As Normalised NPAT for FY18 of $258.1 million exceeded the NPAT target of $230.1 million, incentives accrued under the
STPP.
As illustrated in the figure below, the FY18 Target NPAT was exceeded, however only 85% of the STI pool vested. This
was largely due to the varying performance levels of the underlying business units.
Figure 2: Normalised NPAT relative to target and percentage STI paid
Normalised NPAT relative to target and STI%
)
m
$
(
T
A
P
N
300.0
250.0
200.0
150.0
100.0
50.0
-
%
I
T
S
125%
115%
105%
95%
85%
75%
65%
FY14
FY15
FY16
FY17
FY18
Normalised NPAT ($m)
Target NPAT ($m)
STI %
No awards were made in FY17, as targets were not achieved
x STPP pool moderating measures
The two non-financial measures considered when determining the size of the STPP pool are Guest Satisfaction and Safety
- total reportable injury frequency rate (TRIFR).
Guest Satisfaction is an indicator of the value delivered from the quality of our customer experience and Safety TRIFR is
a critical focus area of the Group, particularly during the current capital expansion and redevelopment phase.
For FY18, the Group met the overall Guest Satisfaction target and achieved better than the Safety TRIFR limit set by the
Board at the commencement of the performance period.
23
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP
Remuneration Report (audited)
For the year ended 30 June 2018
x Executive scorecards (individual performance)
In determining the individual STPP outcomes for Executives, performance is assessed against their individual weighted
balanced scorecard objectives as shown in Figure 3 below.
The objectives are based on the Groups key performance indicators (outlined in Table 4). Executives behaviour, relative
to the qualities and values of The Star Entertainment Group, is also taken into account when determining their individual
performance ratings and outcomes for the purposes of the STPP.
Figure 3: Weighted balanced scorecard
Managing Director and Chief Executive Officer
Managing Director, The Star Sydney
Differentiated value proposition
x Guest Excellence culture
x Customer loyalty
People
x Safety TRIFR^
x Diversity and Engagement^
x Talent development and
Other strategic
priorities
35%
retention
Governance, risk and
stakeholder management
x Compliance
x Sustainability
x Key stakeholder management
Deliver Shareholder value
and World Class
Properties
x Earnings and market
share growth targets
x Diversification of
international revenue
x Operational efficiencies
x Delivery of capital
redevelopment plans on
time, on budget
x Balance sheet
management / capital
ratios
Differentiated value proposition
x Guest Excellence culture
x Customer loyalty
People
x Safety TRIFR^
x Diversity and Engagement^
x Talent development and
retention
Governance
10%
People
20%
Governance, risk and
stakeholder management
Guest
20%
x Compliance
x Sustainability
Deliver Shareholder value
and World Class
Properties
x Net revenue growth
x EBITDA growth
x EGM market share
growth
x Operational efficiencies
and margin optimisation
x Delivery of capital
maintenance and
redevelopment plans on
time, on budget
Shareholder
value creation
50%
Shareholder
value creation
65%
Group Chief Financial Officer
Managing Director, Queensland
Differentiated value proposition
x Guest Excellence culture
x Customer loyalty
People
x Safety TRIFR^
x Diversity and Engagement^
x Talent development and
retention
Governance, risk and
stakeholder management
x Compliance
x Sustainability
x Key stakeholder management
Other strategic
priorities
20%
Shareholder
value creation
80%
Deliver Shareholder value
and World Class
Properties
x Earnings and market
share growth targets
x Diversification of
international revenue
x Operational efficiencies
x Delivery of capital
redevelopment plans on
time, on budget
x Balance sheet
management / capital
ratios
Differentiated value
proposition
x Guest Excellence culture
x Customer loyalty
People
Governance
15%
x Safety TRIFR^
x Diversity and Engagement^
x Talent development and
retention
People
25%
Governance, risk and
stakeholder management
x Compliance
x Sustainability
Guest
20%
Shareholder
value creation
40%
Deliver Shareholder value
and World Class
Properties
x Net revenue growth
x EBITDA growth
x EGM market share
growth
x Operational efficiencies
and margin optimisation
x Delivery of capital
maintenance and
redevelopment plans on
time, on budget
^External providers are engaged to report on TRIFR, Guest Satisfaction and Employee Engagement scores as applicable.
The table below illustrates the individual incentive outcomes accruing to Executives in respect of the FY18 performance
year.
Table 3: FY18 STI Awards
Details
Matt Bekier
Managing Director and
Chief Executive Officer
Chad Barton
Group Chief Financial
Officer
Greg Hawkins
Managing Director,
The Star Sydney
Geoff Hogg
Managing Director,
Queensland
STI award as % of target
97%
Total award $
Delivered as Cash $
Delivered as Restricted
shares $
1,647,540
1,098,360
549,180
105%
486,721
324,481
162,240
70%
529,200
352,800
176,400
80%
304,920
203,280
101,640
71
24
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018
72
Remuneration Report (audited)
For the year ended 30 June 2018
Table 4 provides a summary of performance against the strategic priorities of the Group for FY18.
Table 4: FY18 Performance outcomes against strategic priorities and key performance indicators
Strategic
Priorities
Shareholder
Value and
World Class
Properties
Key performance indicator
Performance outcomes/ commentary
FINANCIAL PERFORMANCE
x Deliver budgeted Normalised NPAT and EBITDA
x The Groups normalised EBITDA of $588m and NPAT of $258m
were up 14.2% and 20.3% on the pcp respectively.
(improving earnings and operating efficiencies)
x International VIP Rebate normalised revenue was up 51.8% on
x Grow revenues and market share in domestic and
including
International Rebate
diversification of revenue
x Grow EGM Market Share
x Manage operational benchmarks, cash and receivables
Business
(IRB),
the pcp.
x Group Domestic Revenue was up 4.1% on the pcp, Slots were up
5.5%, Tables were flat (in Qld this was up 6.3%) and Non-Gaming
was up 15.2%.
x EGM market share for Sydney and Gold Coast up on pcp with
Brisbane flat on pcp
Overall
Rating
Above
target
CAPITAL REDEVELOPMENT PLANS
x Deliver capital works within scope, timing and budget
x Progress master planning for Sydney and the Gold Coast
in line with business strategy
x Progress Queens Wharf Brisbane (QWB) development in
line with approved time frames
x Manage balance sheet and key ratios in line with target
x Open The Darling hotel at The Star Gold Coast
Differentiated
value
proposition
GUEST SERVICE CULTURE
x Elevate the customer service culture through:
o Implementation of world class Guest Service System
(refers to a comprehensive system geared towards
creating sustainable service culture)
o Measuring the internal level of customer service
through an independently managed Internal Customer
Survey (ICS)
LEADERSHIP IN LOYALTY
x To achieve a leadership position in Loyalty and thereby
achieve growth in market share and earnings
x Execution on Loyalty targets include:
o focus on existing customer engagement levels to
increase rated play and offer attainable mid-tier
benefits and exemplary customer service, improving
new member quality and acquisition metrics
People
Governance,
risk and
stakeholder
management
EMPLOYEE ENGAGEMENT
x Focus on ensuring continuous improvements in employee
engagement and diversity
identification and
delivery of appropriate targeted action plans and initiatives
through
implementation of contemporary Learning Management
System (LMS) and effective leadership behaviours and
competencies
x Support a culture of continuous
learning
through
SAFETY
x Deliver a safe environment for guests and team members
across the Group
x Measure Work, Health & Safety (WHS) progress, including
Total Reportable Injury Frequency Rate (TRIFR), Lost Time
Injury Frequency Rate (LTIFR)
x Operationalise strategy and measures of progress,
information
implementation of robust WHS
including
technology platform and increased reporting
RISK, COMPLIANCE & SUSTAINABILITY
x Foster a sound control and compliance environment
underpinned by a strong governance framework, including:
of
and monitoring
implementation
o Effective
compliance with company policies and procedures
o Active monitoring of regulatory and other legislative
compliance requirements
x Deliver on the Sustainability Strategy and achieve resource
consumption reduction
x Maintain and develop key stakeholder relationships
including with regulatory and law enforcement agencies,
community organisations, shareholders, trade unions and
other key business partners.
x Benefits of around $43.7m in FY18 from Fit for Growth program
focused at driving year on year sustainable
that
improvements/operational efficiencies
is
x Master planning and redevelopment works progressing in line with
expectations. Sydney Sovereign Resorts expansion and upgrade
proceeding to plan with gaming capacity maintained, enhanced
offer and customer engagement to manage disruption in place.
x Gold Coasts The Darling and MGF expansion opened on time and
on budget in 3Q FY2018. First mixed-use JV tower being
advanced 80% of apartments presold, contract awarded below
previous guidance, construction commencing in 1Q2019
x QWB development progressing well to budget. Enlarged footprint
driving return on capital expectations above initial bid.
x Gearing and other key ratios were within target range
On
track
x Guest service scores on target except The Star Sydney, which
was slightly below target
x Over 91.3% of staff completed the Star Quality service
foundations training that is also embedded in induction programs
across the Group
On
target
x Over 20,404 guest surveys completed during FY18
x Satisfactory ICS results from FY18 survey
x Electronic gaming rated play in FY18 above 70% of total EGM
revenue
x Continuing improvement from Loyalty investments as part of
overall member acquisition and yield enhancement
x Deeper and wider member base number of active members
On
track
increased at all properties in FY18 vs pcp
x Employee Opinion Survey (EOS) results below expectations with
remedial reviews underway
Below
target
x The Star Entertainment Group shortlisted in four categories of the
2018 Australian HR Awards:
o
o
Employer of Choice (>1,000 employees)
Best Recruitment Campaign for the opening of the new
tower at The Star Gold Coast
Australian HR Team of the Year (>1,000 employees) for
all of HR across the Group
Best Workplace Diversity & Inclusion Program
o
o
x Progress with implementation of WHS strategy
x Significant Improvement in TRIFR limit set by the Board for FY18
x LTIFR for FY18 was below limit set by the Board for FY18
x Work Safety Management System implemented
x Review of KPIs and introduction of lead indicators as measures for
On
track
success commenced
x No material compliance or risk breaches
x The Group was ranked first amongst global peers in the Casino
and Gaming industry sector in the Dow Jones Sustainability Index
in 2017, matching the result achieved in 2016, and remains a
member of the FTSE4Good Index.
x During FY18, The Star Sydney was awarded Australian Hotels
Association National Winner for the Best Environmental & Energy
Efficiency Practice
x Over $10m contributed to partnerships, community groups and
charities
Above
target
25
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP
Remuneration Report (audited)
For the year ended 30 June 2018
3.5 Long Term Performance Plan
The LTPP is principally designed to reward Executives for their contributions towards achieving the Groups strategic
priorities orientated around the achievement of sustainable shareholder value creation. For FY18 the Board approved a
third performance hurdle, namely ROIC, alongside the existing EPS and TSR hurdles. There were no other changes made
to the plan.
For FY18, there were 31 participants invited into the plan (increased from 17 participants for FY17). Each of the Executives
participates in the plan.
Table 5: Key design features of the LTPP
Purpose
To reward Executives for executing the Groups strategy and delivering long term sustainable shareholder value creation.
Type of equity
award
Determination of
the number of
rights
Test Date and
Vesting date
Cessation of
employment,
Change of
Control and
Clawback
Performance Rights (zero exercise price options) are used for the long term incentive. No amount is payable on the grant
of the Performance Rights or upon vesting of Performance Rights. If the Performance Rights vest, an equivalent number
of fully paid ordinary shares will be automatically delivered to the holder.
Upon vesting of the Performance Rights and subject to the holder remaining employed with the Company, the Company
will deliver to the holder fully paid ordinary shares in the Company. The holder will receive full voting and dividend rights
corresponding to the rights of all other holders of ordinary shares in the Company.
The number of performance rights allocated to an Executive is based on their Target LTI award, divided by the
Moderated face value of a performance right as shown in the following calculation:
Target LTI ($)
y
Moderated face
value of a
performance right
Number of performance rights
allocated
The Moderated face value reflects the face value of the share at the allocation date, less the value of any dividends
foregone during the vesting period. A dividend discount factor is used determine the dividends foregone during the vesting
period (i.e. Share price x Dividend Discount Factor) and takes into account past dividends, and future dividend yield
projections.
The moderated face value is used so participants are compensated for the dividends foregone during the vesting period.
The dividend discount factor is reviewed annually to ensure this aligns with actual dividends paid and forecast dividends
to shareholders.
Details of annual grants to Executives are set out in Table 8.
Performance rights are tested on the fourth anniversary of the grant dates and are not subject to retesting.
All unvested performance rights lapse immediately upon cessation of employment with The Star Entertainment Group.
However, the Board has discretion in special circumstances to determine the number of performance rights retained and
the terms applicable. Special circumstances include events such as retirement, redundancy, death and permanent
disability. If a Change of Control Event occurs, or the Board determines in its absolute discretion that a Change of Control
Event may occur, the Board will determine in its absolute discretion appropriate treatment regarding any Awards.
Unvested rights may be clawed back where there has been a material misrepresentation of the financial outcomes on
which the award had been assessed and/or the Executives actions have been found to be fraudulent, dishonest or in
breach of the Groups Code of Conduct (e.g. misconduct).
73
26
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018
74
Remuneration Report (audited)
For the year ended 30 June 2018
Table 5: Key design features of the LTPP (cont.)
Vesting
conditions
(hurdles)
and
schedule
TSR (33.3% of the award)
EPS (33.3% of the award)
ROIC (33.4% of the award)
The Companys TSR ranking against
the peer group of companies (relative
TSR) is used as a performance hurdle,
as it directly aligns the interests of
senior executives participating in the
LTPP
of
the
shareholders, and reflects performance
as measured against the Companys
key strategic objective, which is to
maximise its TSR compared with the
TSR for peer companies.
interests
with
The EPS hurdle measures statutory
earnings per ordinary share adjusted
for the theoretical win rate in the VIP
Rebate business. It drives a line of
sight between shareholder value
creation and managements financial
performance.
The threshold hurdle is set by the
Board by
to market
reference
consensus. The target hurdle is set by
the Board by
the
Companys Board approved five-year
business plan.
reference
to
While the Board may exercise certain
discretions under the LTPP, the Board
will only consider exercising
its
to any
discretion with
applicable adjustments to thresholds
and targets, at the time of testing for
vesting purposes.
respect
The table below sets out the vesting
scale for TSR. The Companys TSR
ranking, compared to its peer group,
must be at least at the 50th percentile
for any vesting to occur.
The
the
table below sets out
percentage of Performance Rights
that will vest depending on
the
Companys EPS performance as at
the Test Date.
The ROIC hurdle measures statutory EBIT,
adjusted for the theoretical win rate in the VIP
Rebate business, as a proportion of average
Net Debt and average Shareholder Equity.
That is:
ROIC =
EBIT adjusted for theoretical win
rate in the VIP Rebate business
Average Net Debt + average
Shareholder Equity
The ROIC hurdle measures the efficiency of
earnings generated from capital investments
made by the Company and seeks to create
alignment of incentive programs in driving the
execution of the Companys capital intensive
strategy to build new assets and improve
existing properties, with the aim of generating
additional revenue and ultimately sustainable
value for shareholders.
The threshold hurdle is set by the Board by
reference to the Companys present ROIC
levels and the target hurdle is set by the Board
by
the Companys Board
to
approved five-year business plan.
reference
While
the Board may exercise certain
discretions under the LTPP, the Board will only
consider exercising its discretion with respect
to adjustments to thresholds and targets at the
time of testing for vesting purposes.
The table below sets out the percentage of
Performance Rights that will vest depending
on the Companys ROIC performance as at the
Test Date.
EPS
performance
Percentage
of
Performance
Rights that
will vest
ROIC
performance
Percentage of
Performance
Rights that will
vest
Below
threshold
0%
Below threshold
At threshold
50%
At threshold
0%
50%
Between
threshold and
stretch
Pro-rata
between
threshold and
stretch
Between
threshold and
stretch
Pro-rata between
threshold and
stretch
TSR Ranking Percentage
of
Performance
Rights that
will vest
0%
50%
Pro-rata
between 50%
(at 50th
percentile)
and 100% (at
75th
percentile)
Below 50th
percentile
At 50th
percentile
Above 50th
percentile and
below 75th
percentile
At or above
75th
percentile
100%
Stretch target
100%
Stretch target
100%
Disclosure
of
performance
hurdles
The Company will disclose the actual EPS and ROIC targets on a retrospective basis to ensure that the Companys competitive
position is not undermined.
27
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP
Remuneration Report (audited)
For the year ended 30 June 2018
3.6 Vesting under the LTPP
Since the Groups inception in 2011, there have been seven grants made under the LTPP, with three grants tested and
one vesting outcome (FY14 award). Table 6 sets out the details of performance rights issued over the last five financial
years.
Table 6: Details of performance rights issued to date
Detail
Grant date
Test date
FY14 Grant
FY15 Grant
FY16 Grant
FY17 Grant
FY18 Grant
1 Oct 2013
1 Oct 2017
26 Sep 2014
21 Sep 2015
26 Sep 2018
21 Sep 2019
5 Oct 2016
5 Oct 2020
2 Oct 2017
2 Oct 2021
Vesting hurdle(s)
TSR & EPS
TSR & EPS
TSR & EPS
TSR & EPS
TSR, EPS & ROIC
Test result
100% vested
N/A
N/A
N/A
N/A
During FY18, the FY14 Grant was tested and vested as performance hurdles were met. The next test date will be in September 2018, for performance rights
granted in FY15.
Performance rights relating to the FY14 grant were tested in October 2017. The TSR performance of the Group was
113.5% (excluding the value of franking credits), with a percentile ranking of 85.9. As this was above the 75th percentile,
100% of the TSR component of the FY14 Grant vested under LTPP for FY14. The EPS performance hurdle of 24.9 cents
was above the target of 21.8 cents and accordingly 100% of the EPS component of the FY14 Grant vested.
The FY15 Grant, due to be tested on 26 September 2018, has EPS and TSR performance hurdles that each comprise
50% of the award outcome. Details will be provided to shareholders ahead of the 2018 AGM and reported in the FY19
Remuneration Report.
Table 7 outlines the performance of the Group and shareholder returns over the last five financial years.
Table 7: Statutory key performance indicators
Performance metric
FY14
FY15
FY16
FY17
FY18
Statutory NPAT
$106.3m
$169.3m
$194.4m
$264.4m
$148.1m
Basic EPS (statutory)
Full year dividend (fully franked, cents
per share)
Share price at year end
Increase/(decrease) in share price
12.9c
8.0c
$3.14
+3%
20.5c
11.0c
$4.36
+39%
23.6c
13.0c
$5.40
+24%
32.0c
16.0c
$5.05
(6%)
17.5c
20.5c
$4.93
(2%)
Table 8 summarises the unvested performance rights held by Executives as at 30 June 2018.
Table 8: Performance rights by grant held by Executives at 30 June 2018
Executive
FY15 Grant
FY16 Grant
FY17 Grant
FY18 Grant
Total performance rights held
Matt Bekier
Chad Barton
Greg Hawkins
Geoff Hogg
352,112
91,549
169,014
70,422
253,456
548,204
627,706
1,781,478
62,903
67,108
100,048
110,599
117,958
163,636
50,691
54,064
82,500
321,608
561,207
257,677
Total performance rights
683,097
477,649
787,334
973,890
2,921,970
75
28
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018
76
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(
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP
Remuneration Report (audited)
For the year ended 30 June 2018
6. NED Remuneration
Remuneration Policy
x NEDs receive a Board fee and a Committee fee for their participation as Chair or member of each Committee.
x NEDs do not receive any performance or incentive payments and are not eligible to participate in any of The Star
Entertainment Groups reward programs. This policy aligns with the principle that NEDs act independently and
impartially.
x Board fees are not paid to the Managing Director and Chief Executive Officer. Executives do not receive fees for
directorships of any subsidiaries.
NED Fees
The aggregate fees payable to NEDs for their services as directors are limited to the maximum annual amount approved
by shareholders, currently set at $2,500,000 including superannuation contributions.
There were no changes to base NED fees for FY18. There was one increase to align the Investment & Capital Expenditure
Review Committee fees to those of the Audit, Risk & Compliance and Remuneration Committees.
Board and Committee fees effective from 1 July 2017 are shown in Table 12.
Table 12: Annual NED Fees (inclusive of superannuation)
Board
Audit
Risk &
Compliance
Remuneration
People, Culture &
Social
Responsibility
Investment & Capital
Expenditure Review
Chair
$475,000
$35,000
$35,000
$35,000
$30,000
$35,000
Member
$160,000
$17,500
$17,500
$17,500
$15,000
$17,500
The Star Entertainment Group remunerates NEDs for the full month of fees irrespective of their commencement date. Observer fees are paid
where the NED appointment is subject to casino regulatory approvals being obtained. Observer fees are equivalent to applicable Board and Committee fees.
A summary of the total remuneration received by each NED is set out in Table 13.
Table 13: NED Remuneration
NED
Financial year
Board and Committee Fees
$
Superannuation (i)
$
John O'Neill AO
Gerard Bradley
Greg Hayes(ii)
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Zlatko Todorcevski(iii)
Ben Heap(iv)
TOTAL FY18
TOTAL FY17
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2018
2018
2017
442,789
439,168
230,376
225,384
70,044
207,965
205,479
205,580
207,763
207,983
210,110
205,562
148,331
95,890
1,610,782
1,491,642
32,211
35,832
20,041
19,616
6,623
19,535
19,521
19,420
19,737
19,517
19,890
19,438
13,961
9,110
141,094
133,358
Total
$
475,000
475,000
250,417
245,000
76,667
227,500
225,000
225,000
227,500
227,500
230,000
225,000
162,292
105,000
1,751,876
1,625,000
(i) Comprises superannuation contributions per Superannuation Guarantee legislation and salary sacrificed superannuation.
(ii) Greg Hayes retired on 26 October 2017.
(iii) Zlatko Todorcevski was appointed on 23 May 2018. Payment of Observer fees commenced from 23 October 2017, following the announcement of
appointment subject to casino regulatory approvals being obtained.
(iv) Ben Heap was appointed on 23 May 2018. Payment of Observer fees commenced from 18 December 2017, following the announcement of appointment
subject to casino regulatory approvals being obtained.
79
32
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018
80
Remuneration Report (audited)
For the year ended 30 June 2018
7. Other information
7.1. KMP shareholdings
To align the interests of the Board and Executives with the interests of shareholders generally, the Company has a
minimum shareholding policy for KMP. There is also a separate Minimum Shareholding Policy that applies to other
executives who report directly to the Managing Director and Chief Executive Officer.
Minimum Shareholding Policy for Executives
Executives are encouraged to progressively acquire shares over a five year period from the date of their appointment (for
new Executives), or within five years from the date of commencement of the policy (for existing Executives).
The Managing Director and Chief Executive Officer is to hold a minimum number of shares which is of equal value to 150%
of one years base salary at the time of his unconditional appointment.
Other Executives are to hold a minimum number of shares which is of equal value to 100% of one years base salary at
the time of their unconditional appointment.
Direct and indirect holdings in shares or performance rights will each count towards the minimum shareholding target.
Minimum Shareholding Policy for NEDs
NEDs are encouraged to progressively acquire shares over a three year period from the date of commencement of their
unconditional appointment, or within three years from the date of commencement of the policy (for existing directors).
NEDs are to hold shares of equal value to their respective annual base fees applicable at the time of their unconditional
appointment.
Direct and indirect holdings will both count towards the minimum shareholding target.
Tables 14 and 15 show the number of shares and performance rights held by NEDs and Executives respectively at the
beginning and end of the financial year.
Table 14: Shares held by NEDs at 30 June 2018
NED
Balance at start of the
year
Number acquired
Number divested
Balance at the end of
the year
John O’Neill AO
Gerard Bradley
Greg Hayes(i)
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Zlatko Todorcevski(ii)
Ben Heap(ii)
54,348
25,000
10,000
27,080
45,900
80,000
-
-
24,578
15,000
-
9,827
-
20,000
50,000
20,000
Total ordinary shares
242,328
139,405
(i) Represents shares held at date of cessation with the Company on 26 October 2017.
(ii) Includes shares held at date of commencement with the Company and acquired during the period.
-
-
-
-
-
-
-
-
-
78,926
40,000
10,000
36,907
45,900
100,000
50,000
20,000
381,733
33
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP
Remuneration Report (audited)
For the year ended 30 June 2018
Table 15: Shares and Performance Rights held by Executives at 30 June 2018
Executive
Holding
Balance at start of the
year
Acquired or granted
as compensation(i)
Disposed of, lapsed
or transferred during
the year (ii)
Balance at the end of
the year
Matt Bekier
Performance Rights
1,350,622
Ordinary Shares
Restricted Shares
Chad Barton
Performance Rights
Ordinary Shares
Restricted Shares
509,773
139,789
221,560
33,273
30,356
627,706
338,929
2,290
100,048
31,398
497
Greg Hawkins
Performance Rights
397,571
163,636
Ordinary Shares
Restricted Shares
Geoff Hogg
Performance Rights
Ordinary Shares
Restricted Shares (iii)
48,868
55,597
238,169
94,019
21,315
58,791
910
82,500
86,852
934
(196,850)
1,781,478
(100,000)
748,702
(142,079)
-
(64,671)
(30,853)
-
-
(56,507)
(62,992)
-
(20,719)
-
321,608
-
-
561,207
107,659
-
257,677
180,871
1,530
(i) Includes shares acquired under the Dividend Reinvestment Plan and transfers from restricted shares where the holding lock has been lifted.
(ii) Restricted shares that are no longer subject to a holding lock are converted into ordinary shares.
(iii) Includes 600 ordinary shares acquired in FY18 through salary sacrifice under the General Employee Share Plan. The closing balance of restricted shares
is wholly comprised of ordinary shares acquired through salary sacrifice under the General Employee Share Plan and are subject to holding locks of one year
and three years from the relevant acquisition dates. The holding locks will end in FY19 and FY20.
7.2.
Loans and other transactions with KMP
There have been no loans or other transactions with KMP during the year.
81
34
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018
82
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(
REMUNERATION REPORT (AUDITED)FOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP
ANNUAL REPORT 2018
83
FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2018
THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES
84
Consolidated income statement
CONSOLIDATED INCOME STATEMENT
For the year ended 30 June 2018
FOR THE YEAR ENDED 30 JUNE 2018
Revenue
Other income
Government taxes and levies
Commissions and fees
Employment costs
Depreciation and amortisation
Cost of sales
Property costs
Advertising and promotions
Other expenses
Share of net loss of associate and joint venture entities accounted for
using the equity method
Earnings before interest and tax (EBIT)
Net finance costs
Profit before income tax (PBT)
Income tax expense
Net profit after tax (NPAT)
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Change in fair value of cash flow hedges taken to equity, net of tax
Total comprehensive income for the period
Earnings per share:
Basic earnings per share
Diluted earnings per share
Fully franked dividend per share
Note
A2
2018
$m
2017
$m
2,472.0
2,344.0
A3
A3
A3
A3
A4
A3
D5
A5
F2
F1
F3
F3
A6
-
(538.5)
(410.9)
(669.4)
(187.2)
(91.5)
(81.9)
(93.0)
(111.9)
(0.1)
287.6
(77.2)
210.4
(62.3)
148.1
1.1
(526.2)
(247.3)
(609.1)
(164.5)
(85.7)
(77.9)
(91.5)
(120.5)
(0.7)
421.7
(41.7)
380.0
(115.6)
264.4
(3.4)
144.7
(13.4)
251.0
17.5 cents
32.0 cents
17.5 cents
20.5 cents
31.9 cents
16.0 cents
The above consolidated income statement should be read in conjunction with the accompanying notes.
36
THE STAR ENTERTAINMENT GROUP Consolidated balance sheet
CONSOLIDATED BALANCE SHEET
For the year ended 30 June 2018
FOR THE YEAR ENDED 30 JUNE 2018
ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Other assets
Total current assets
Property, plant and equipment
Intangible assets
Derivative financial instruments
Investment in associate and joint venture entities
Other assets
Total non current assets
TOTAL ASSETS
LIABILITIES
Trade and other payables
Interest bearing liabilities
Income tax payable
Provisions
Derivative financial instruments
Other liabilities
Total current liabilities
Interest bearing liabilities
Deferred tax liabilities
Provisions
Derivative financial instruments
Total non current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Retained earnings
Reserves
TOTAL EQUITY
Note
B1
B2
B3
F4
B4
B5
B3
D5
F4
F5
B7
F2
F6
B3
F7
B7
F2
F6
B3
F8
F8
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
85
2017
$m
113.7
192.7
11.9
48.4
60.9
427.6
2,360.5
1,851.8
151.1
212.4
11.9
4,587.7
5,015.3
324.5
130.0
28.8
66.5
18.4
21.1
589.3
915.0
188.2
9.9
37.3
1,150.4
1,739.7
3,275.6
2018
$m
110.3
221.5
15.5
3.9
44.8
396.0
2,658.6
1,858.7
57.4
288.9
11.2
4,874.8
5,270.8
365.8
133.8
0.3
64.5
4.2
20.3
588.9
686.2
175.9
12.9
25.4
900.4
1,489.3
3,781.5
3,070.2
718.3
(7.0)
2,580.5
702.3
(7.2)
3,781.5
3,275.6
37
ANNUAL REPORT 2018 86
CONSOLIDATED STATEMENT OF CASH FLOWS
Consolidated statement of cash flows
For the year ended 30 June 2018
FOR THE YEAR ENDED 30 JUNE 2018
Cash flows from operating activities
Net cash receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Payment of government levies, gaming taxes and GST
Interest received
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payments for property, plant, equipment and intangibles
Payments for investment in associate and joint venture entities
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from interest bearing liabilities
Repayment of interest bearing liabilities
Proceeds from settlement of derivative financial instruments
Dividends paid
Finance costs
Proceeds from issue of shares
Net cash inflow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Note
2018
$m
2017
$m
2,386.9
(1,371.2)
(519.0)
1.0
(100.6)
2,348.3
(1,259.4)
(521.0)
1.0
(95.6)
397.1
473.3
(475.6)
(76.5)
(552.1)
1,268.4
(1,517.1)
102.5
(132.1)
(59.5)
489.4
151.6
(407.6)
(183.9)
(591.5)
434.5
(185.0)
-
(123.9)
(52.7)
-
72.9
(3.4)
(45.3)
113.7
110.3
159.0
113.7
F2
F9
E2
E2
E2
A6
F8
B1
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
38
THE STAR ENTERTAINMENT GROUP Consolidated statement of changes in equity
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2018
FOR THE YEAR ENDED 30 JUNE 2018
87
Ordinary
shares
$m
Retained
earnings
$m
Hedging
reserve
$m
2018
Balance at 1 July 2017
Profit for the year
Other comprehensive income
Issue of share capital
Total comprehensive income
Dividends paid
Employee share based payments
Balance at 30 June 2018
2017
Balance at 1 July 2016
Profit for the year
Other comprehensive income
Total comprehensive income
Dividends paid
Employee share based payments
Balance at 30 June 2017
Note
F1
F8
A6
F10
F1
A6
F10
2,580.5
-
-
489.7
489.7
-
-
3,070.2
2,580.5
-
-
-
-
-
2,580.5
702.3
148.1
-
-
148.1
(132.1)
-
718.3
561.8
264.4
-
264.4
(123.9)
-
702.3
Share based
payment
reserve
$m
6.6
-
-
-
-
-
3.6
Total
$m
3,275.6
148.1
(3.4)
489.7
634.4
(132.1)
3.6
(13.8)
-
(3.4)
-
(3.4)
-
-
(17.2)
10.2
3,781.5
(0.4)
-
(13.4)
(13.4)
-
-
(13.8)
5.8
-
-
-
-
0.8
6.6
3,147.7
264.4
(13.4)
251.0
(123.9)
0.8
3,275.6
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
39
ANNUAL REPORT 2018 88
THE STAR ENTERTAINMENT GROUP
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Refer to the Operating and Financial Review (OFR) within the Directors' Report for details of the key
transactions during the year.
CONTENTS
A KEY INCOME STATEMENT DISCLOSURES
A1. Segment information
A2. Revenue
A3. Expenses
A4. Depreciation and amortisation
A5. Net finance costs
A6. Dividends
A7. Significant items
B KEY BALANCE SHEET DISCLOSURES
ASSETS
B1. Cash and cash equivalents
B2. Trade and other receivables
B3. Derivative financial instruments
B4. Property, plant and equipment
B5. Intangible assets
B6. Impairment testing and goodwill
LIABILITIES
B7.
Interest bearing liabilities
C COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS
C1. Commitments
C2. Contingent liabilities
C3. Subsequent events
D GROUP STRUCTURE
D1. Related party disclosures
D2. Parent entity disclosures
D3. Deed of cross guarantee
D4. Key Management Personnel disclosures
D5. Investment in associates and joint venture entities
E RISK MANAGEMENT
E1. Financial risk management objectives and policies
E2. Additional financial instruments disclosures
F OTHER DISCLOSURES
F1. Other comprehensive income
F2. Income tax
F3. Earnings per share
F4. Other assets
F5. Trade and other payables
F6. Provisions
F7. Other liabilities (current)
F8. Share capital and reserves
F9. Reconciliation of net profit after tax to net cash inflow from operations
F10. Employee share plans
F11. Auditor’s remuneration
G ACCOUNTING POLICIES AND CORPORATE INFORMATION
89
89
90
90
91
91
92
93
94
94
94
96
97
98
99
101
101
103
103
103
103
104
104
106
107
108
109
113
113
117
120
120
120
123
123
123
124
125
125
126
127
128
129
89
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
A Key income statement disclosures
A Key income statement disclosures
A1 Segment information
A1 Segment information
The Group's operating segments have been determined based on the internal management reporting structure and the
The Group's operating segments have been determined based on the internal management reporting structure and the
nature of products and services provided by the Group. They reflect the business level at which financial information is
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The Group has three reportable segments:
The Group has three reportable segments:
Sydney
Sydney
Gold Coast
Gold Coast
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Brisbane
Brisbane
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
2018
2018
Gross revenues - VIP a
Gross revenues - VIP a
Gross revenues - domestic a
Gross revenues - domestic a
Segment revenue (refer to note A2)
Segment revenue (refer to note A2)
Segment
tax,
tax,
Segment
depreciation, amortisation and significant items
depreciation, amortisation and significant items
earnings
earnings
interest,
interest,
before
before
Depreciation and amortisation (refer to note A4)
Depreciation and amortisation (refer to note A4)
Capital expenditure
Capital expenditure
2017
2017
Gross revenues - VIP a
Gross revenues - VIP a
Gross revenues - domestic a
Gross revenues - domestic a
Segment revenue (refer to note A2)
Segment revenue (refer to note A2)
Segment earnings before interest, tax, depreciation,
Segment earnings before interest, tax, depreciation,
amortisation and significant items
amortisation and significant items
Depreciation and amortisation (refer to note A4)
Depreciation and amortisation (refer to note A4)
Capital expenditure
Capital expenditure
Sydney
Sydney
$m
$m
571.4
571.4
1,165.3
1,165.3
1,736.7
1,736.7
285.8
285.8
114.2
114.2
192.0
192.0
Sydney
Sydney
$m
$m
547.9
547.9
1,137.9
1,137.9
1,685.8
1,685.8
401.1
401.1
100.2
100.2
180.0
180.0
Gold Coast
Gold Coast
$m
$m
Brisbane
Brisbane
$m
$m
132.8
132.8
376.9
376.9
509.7
509.7
116.9
116.9
42.3
42.3
258.5
258.5
7.3
7.3
325.8
325.8
333.1
333.1
81.7
81.7
30.7
30.7
39.5
39.5
Gold Coast
Gold Coast
$m
$m
Brisbane
Brisbane
$m
$m
66.3
66.3
331.3
331.3
397.6
397.6
94.4
94.4
36.3
36.3
209.1
209.1
25.4
25.4
323.4
323.4
348.8
348.8
104.2
104.2
28.0
28.0
30.5
30.5
a
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Reconciliation of reportable segment profit to profit before income tax
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
Segment earnings before interest, tax, depreciation, amortisation and
significant items
significant items
Depreciation and amortisation
Depreciation and amortisation
Significant items (refer to note A7)
Significant items (refer to note A7)
Unallocated items:
Unallocated items:
- net finance costs (refer to note A5)
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
for using the equity method (refer to note D5)
Profit before income tax (PBT)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
Total
Total
$m
$m
711.5
711.5
1,868.0
1,868.0
2,579.5
2,579.5
484.4
484.4
187.2
187.2
490.0
490.0
Total
Total
$m
$m
639.6
639.6
1,792.6
1,792.6
2,432.2
2,432.2
599.7
599.7
164.5
164.5
419.6
419.6
2017
2017
$m
$m
599.7
599.7
(164.5)
(164.5)
(12.8)
(12.8)
2018
2018
$m
$m
484.4
484.4
(187.2)
(187.2)
(52.4)
(52.4)
(34.3)
(34.3)
(41.7)
(41.7)
(0.1)
(0.1)
210.4
210.4
(0.7)
(0.7)
380.0
380.0
41
41
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 90
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
A2 Revenue
The Group's operating segments have been determined based on the internal management reporting structure and the
2017
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
$m
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Gaming
The Group has three reportable segments:
Non-gaming and other
Sydney
Total gross revenue
Player rebates and promotional allowances
Gold Coast
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
2,432.2
(88.2)
2,579.5
(107.5)
2,184.2
248.0
2,293.0
286.5
2018
$m
2,472.0
2,344.0
Sydney
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Brisbane
Revenue is up $128.0 million or 5.5% on the prior comparable period (pcp) driven by growth in domestic
Total
gaming and in the International VIP Rebate business, despite the low win rate.
2018
$m
Revenue
Gross revenues - VIP a
Revenue is measured at the fair value of the consideration received or receivable from the sale of goods and services
in the ordinary course of the Group's activities. Revenue is recognised to the extent that it is probable that the
Gross revenues - domestic a
economic benefits associated with a transaction will flow to the Group and the amount of revenue and associated
Segment revenue (refer to note A2)
costs incurred can be reliably measured. Revenue comprises net gaming win less player rebates and promotional
allowances, as well as other non-gaming revenue from the hotels, restaurants and bars.
tax,
Segment
Customer loyalty programs
depreciation, amortisation and significant items
The Group operates customer loyalty programs enabling customers to accumulate award credits for gaming and on-
Depreciation and amortisation (refer to note A4)
property spend. A portion of the spend, equal to the fair value of the award credits earned and reduced for expected
breakage, is treated as deferred revenue (refer to note F7). Revenue from the award credits is recognised in the
Capital expenditure
income statement when the award is redeemed or expires.
Gold Coast
$m
Brisbane
$m
711.5
1,868.0
571.4
1,165.3
7.3
325.8
132.8
376.9
earnings
interest,
1,736.7
2,579.5
before
484.4
187.2
490.0
192.0
258.5
116.9
285.8
114.2
509.7
333.1
30.7
39.5
81.7
42.3
$m
A3 Expenses
Profit before income tax is stated after charging the following expenses and significant items:
2017
Other income
Gross revenues - VIP a
Net foreign exchange gain
Gross revenues - domestic a
Government taxes and levies (including gaming GST):
Segment revenue (refer to note A2)
547.9
1,137.9
66.3
331.3
1,685.8
397.6
Sydney
$m
Gold Coast
$m
Brisbane
$m
New South Wales
Queensland
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Depreciation and amortisation (refer to note A4)
401.1
100.2
94.4
36.3
25.4
-
323.4
348.8
368.9
169.6
104.2
538.5
28.0
Total
$m
639.6
1.1
1,792.6
2,432.2
369.4
156.8
599.7
526.2
164.5
Government taxes and levies is up $12.3 million or 2.3% on the pcp in line with higher domestic gaming
Capital expenditure
revenues.
419.6
180.0
209.1
30.5
a
Commissions and fees
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
410.9
247.3
Commission and fees are up 66.2% reflecting substantial growth in the International VIP Rebate volumes.
Employment costs:
Reconciliation of reportable segment profit to profit before income tax
Salaries, wages, bonuses and other benefits
Segment earnings before interest, tax, depreciation, amortisation and
Defined contribution plan expense (superannuation guarantee charges)
significant items
Share based payment expense (refer to note F10)
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
Cost of inventories recognised as an expense during the year
- net finance costs (refer to note A5)
Movement in provision for impairment of trade receivables (refer to note B2)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Operating lease charges
Profit before income tax (PBT)
Significant items (refer to note A7)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
2018
$m
2017
$m
616.7
47.2
484.4
5.5
(187.2)
(52.4)
669.4
91.5
(34.3)
7.6
(0.1)
12.0
210.4
52.4
559.8
45.5
599.7
3.8
(164.5)
(12.8)
609.1
85.7
(41.7)
18.7
(0.7)
13.0
380.0
12.8
41
42
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
91
A Key income statement disclosures
A1 Segment information
A4 Depreciation and amortisation
2018
$m
137.1
26.2
1.2
155.2
30.8
1.2
The Group's operating segments have been determined based on the internal management reporting structure and the
2017
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
$m
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Property, plant and equipment (refer to note B4)
The Group has three reportable segments:
Intangible assets (refer to note B5)
Other
Sydney
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Gold Coast
Depreciation is calculated using a straight line method. The useful lives over which the assets are depreciated are as
Brisbane
follows (for further details of the useful lives of intangible assets refer to note B5):
Freehold and leasehold buildings
Leasehold improvements
2018
Plant and equipment
Gross revenues - VIP a
Software
Gross revenues - domestic a
Licences
Segment revenue (refer to note A2)
Operating equipment (which includes uniforms, casino chips, kitchen utensils, crockery, cutlery and linen) is
tax,
earnings
Segment
recognised as a depreciation expense based on usage. The period of usage depends on the nature of the operating
depreciation, amortisation and significant items
equipment and averages up to 3 years.
The residual values and useful lives are reviewed annually, and adjusted if appropriate, at each financial reporting
Depreciation and amortisation (refer to note A4)
date.
Capital expenditure
A5 Net finance costs
10 - 95 years
Sydney
4 - 75 years
$m
5 - 20 years
571.4
3 - 10 years
1,165.3
Until expiry
1,736.7
Gold Coast
$m
Brisbane
$m
711.5
1,868.0
7.3
325.8
132.8
376.9
Total
$m
interest,
2,579.5
before
116.9
192.0
484.4
333.1
164.5
258.5
114.2
285.8
187.2
509.7
187.2
490.0
30.7
81.7
42.3
39.5
Interest paid on borrowings
Capitalised to property, plant and equipment a
2017
Borrowing costs
Gross revenues - VIP a
US Private Placement premium unwind
Gross revenues - domestic a
Fair value hedging adjustment
Segment revenue (refer to note A2)
Interest income
Segment earnings before interest, tax, depreciation,
Net finance costs before significant items
amortisation and significant items
US Private Placement tender and reissue costs
Depreciation and amortisation (refer to note A4)
Net finance costs recognised in the income statement
Capital expenditure
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
Gold Coast
$m
66.3
331.3
397.6
94.4
36.3
209.1
49.1
Brisbane
(10.0)
$m
3.3
25.4
(5.2)
323.4
(1.9)
348.8
(1.0)
34.3
104.2
42.9
28.0
77.2
30.5
49.4
Total
(10.0)
$m
3.3
639.6
-
1,792.6
-
2,432.2
(1.0)
41.7
599.7
-
164.5
41.7
419.6
a
a
Borrowing costs of $10.0 million were capitalised during the year and are included in 'Additions' in note B4. The capitalisation
rate was equal to the Group's weighted average cost of borrowings applicable to the Group's outstanding borrowings during the
year.
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
2017
Net finance costs of $77.2 million were up 85.1% on the pcp predominately due to the one-off loss relating to
$m
the restructure of the US Private Placement note program.
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
599.7
(164.5)
(12.8)
484.4
(187.2)
(52.4)
2018
$m
(34.3)
(41.7)
(0.1)
(0.7)
Profit before income tax (PBT)
210.4
380.0
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
43
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 92
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
A6 Dividends
2018
Cents per
share
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
The Group's operating segments have been determined based on the internal management reporting structure and the
2017
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Cents per
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
share
The Group has three reportable segments:
Dividends per share
Interim dividend
Sydney
Final dividend
Gold Coast
Total dividend
Brisbane
A final dividend per share of 13.0 cents fully franked was declared, totalling 20.5 cents per share for the year,
up 28.1% on the pcp, reflecting the enhanced dividend payout policy, improved performance and financial
Total
position of the Group.
2018
$m
Gross revenues - VIP a
Gross revenues - domestic a
Dividends declared and paid during the year on ordinary shares
1,736.7
Segment revenue (refer to note A2)
Final dividend paid during the year in respect of the year ended 30 June 2017 a
tax,
Segment
Interim dividend paid during the year in respect of the half year ended 31
depreciation, amortisation and significant items
December 2017 b
Depreciation and amortisation (refer to note A4)
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Gold Coast
$m
Brisbane
$m
711.5
2017
1,868.0
$m
571.4
1,165.3
7.3
2018
325.8
$m
7.5 b
13.0 c
2,579.5
61.9
132.8
376.9
333.1
70.2
7.5
8.5a
earnings
interest,
Sydney
before
20.5
509.7
285.8
114.2
116.9
42.3
16.0
$m
Capital expenditure
a A final dividend of 8.5 cents per share fully franked for the year ended 30 June 2017 (30 June 2016: 7.5 cents) was declared on
192.0
258.5
22 August 2017 and paid on 26 September 2017 (2016: declared on 25 August 2016 and paid on 30 September 2016).
Total
b An interim dividend of 7.5 cents per share fully franked for the half year ended 31 December 2017 (31 December 2016: 7.5 cents)
2017
$m
Gross revenues - VIP a
Gross revenues - domestic a
was declared on 15 February 2018 and paid on 22 March 2018 (2017: declared on 15 February 2017 and paid on 22 March
2017).
Gold Coast
$m
Brisbane
$m
Sydney
$m
547.9
1,137.9
66.3
331.3
81.7
61.9
30.7
132.1
39.5
484.4
62.0
187.2
123.9
490.0
Segment revenue (refer to note A2)
Dividends declared after balance date
Segment earnings before interest, tax, depreciation,
Final dividend declared for the year ended 30 June 2018 c
amortisation and significant items
1,685.8
401.1
397.6
94.4
164.5
Depreciation and amortisation (refer to note A4)
c Since the end of the financial year, the Directors have declared a final dividend of 13.0 cents per ordinary share (2017: 8.5 cents),
419.6
Capital expenditure
fully franked. The aggregate amount is expected to be paid on 4 October 2018 out of retained earnings at 30 June 2018, but not
recognised as a liability at the end of the year.
100.2
209.1
180.0
30.5
36.3
28.0
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Franking credit balance
Amount of franking credits available to shareholders
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
25.4
2018
323.4
$m
348.8
639.6
2017
1,792.6
$m
2,432.2
119.3
104.2
70.2
599.7
165.8
2018
$m
484.4
(187.2)
(52.4)
121.7
2017
$m
599.7
(164.5)
(12.8)
(34.3)
(41.7)
(0.1)
210.4
(0.7)
380.0
41
44
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
93
A Key income statement disclosures
A1 Segment information
A7 Significant items
The Group's operating segments have been determined based on the internal management reporting structure and the
Profit before income tax (PBT) is stated after charging the following significant items:
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
2017
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
$m
The Group has three reportable segments:
Finance costs relating to US Private Placement tender and reissue a
Sydney
Pre opening expenses b
Costs associated with the International VIP Rebate business c
Gold Coast
Net significant items
Brisbane
Tax on significant items
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
2018
$m
42.9
9.5
52.4
12.8
12.8
-
-
-
Sydney
$m
Gold Coast
$m
(15.7)
Brisbane
36.7
$m
(3.9)
Total
8.9
$m
Significant items net of tax
2018
a
Gross revenues - VIP a
Gross revenues - domestic a
before
1,736.7
interest,
earnings
132.8
376.9
7.3
325.8
571.4
1,165.3
Segment revenue (refer to note A2)
In August 2017, the Group completed a tender and reissue offer in relation to 73% of the Group's US Private Placement
711.5
borrowings. This was undertaken to extend the Group's tenor on average drawn debt maturity by 3 years to 5.2 years, reduce
1,868.0
finance costs on a like for like basis and lower refinancing requirements for the Group. The average blended cost of debt on all
US Private Placement notes following the issue was 5% (down from over 9% on previous notes). The transaction resulted in a
2,579.5
one-off loss relating to the crystallisation of an existing obligation for the related out of the money interest rate swaps and other
costs.
tax,
Segment
b
depreciation, amortisation and significant items
Consistent with previous accounting treatment, pre opening expenses such as marketing, operating and training expenses
incurred prior to the opening of The Darling Gold Coast, have been treated as significant due to their size and non-recurring
nature.
Costs relating to the unutilised aircraft, including unavoidable lease payments, maintenance and other costs.
39.5
Depreciation and amortisation (refer to note A4)
c
Capital expenditure
Significant items are determined by management based on their nature and size. They are items of income or expense
which are, either individually or in aggregate, material to the Group or to the relevant business segment and:
Total
− not in the ordinary course of business (for example, the cost of significant reorganisations or restructuring); or
2017
$m
− part of the ordinary activities of the business but unusual due to their size and nature (for example, impairment of
Gross revenues - VIP a
639.6
Gross revenues - domestic a
1,792.6
Gold Coast
$m
Brisbane
$m
Sydney
$m
547.9
1,137.9
66.3
331.3
25.4
323.4
assets).
490.0
114.2
509.7
484.4
258.5
116.9
187.2
285.8
333.1
192.0
42.3
30.7
81.7
Segment revenue (refer to note A2)
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Depreciation and amortisation (refer to note A4)
Capital expenditure
1,685.8
401.1
100.2
180.0
397.6
94.4
36.3
209.1
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
348.8
2,432.2
104.2
28.0
30.5
2018
$m
484.4
(187.2)
(52.4)
599.7
164.5
419.6
2017
$m
599.7
(164.5)
(12.8)
(34.3)
(41.7)
(0.1)
210.4
(0.7)
380.0
41
45
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 94
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
B Key balance sheet disclosures
B1 Cash and cash equivalents
The Group's operating segments have been determined based on the internal management reporting structure and the
Assets
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The Group has three reportable segments:
2018
$m
2017
$m
Cash on hand and in banks
Sydney
Short term deposits, maturing within 30 days
Gold Coast
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
95.4
14.9
107.7
6.0
110.3
113.7
Brisbane
Comprises Treasury's casino operations, including hotel, restaurants and bars.
B2 Trade and other receivables
Trade receivables a
2018
Less provision for impairment
Gross revenues - VIP a
Net trade receivables
Gross revenues - domestic a
Other receivables
Segment revenue (refer to note A2)
Sydney
$m
571.4
1,165.3
1,736.7
Gold Coast
$m
132.8
376.9
509.7
116.9
42.3
Brisbane
208.4
$m
(16.0)
7.3
192.4
325.8
29.1
333.1
221.5
81.7
tax,
Segment
depreciation, amortisation and significant items
a
Includes patron cheques not deposited of $145.1 million (2017: $123.2 million).
earnings
interest,
before
285.8
Depreciation and amortisation (refer to note A4)
Past due not impaired receivables of $28.7 million were down from $33.3 million in the pcp.
114.2
30.7
(i) Provision for impairment reconciliation
Capital expenditure
192.0
258.5
39.5
Balance at beginning of year
Provision for impairment recognised during the year b
2017
Less amounts written off as uncollectible
Gross revenues - VIP a
Balance at end of year
Gross revenues - domestic a
b These amounts are included in other expenses in the income statement (refer to note A3).
Segment revenue (refer to note A2)
Trade receivables are non-interest bearing and are generally on 30 day terms.
Segment earnings before interest, tax, depreciation,
(ii) Ageing of trade and other receivables
amortisation and significant items
Sydney
$m
547.9
1,137.9
1,685.8
401.1
Gold Coast
$m
66.3
331.3
397.6
94.4
(14.0)
Brisbane
(7.6)
$m
5.6
25.4
(16.0)
323.4
348.8
104.2
Depreciation and amortisation (refer to note A4)
Trade receivables
Capital expenditure
0 - 30 days
$m
100.2
30 days - 1
year
$m
180.0
36.3
1 - 3 years
209.1
$m
28.0
3 years +
30.5
$m
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
163.7
0.5
1.0
2018
a
-
Not yet due
17.8
Past due not impaired
0.6
Considered impaired
Reconciliation of reportable segment profit to profit before income tax
18.4
Segment earnings before interest, tax, depreciation, amortisation and
significant items
2017
Depreciation and amortisation
Not yet due
Significant items (refer to note A7)
Past due not impaired
Unallocated items:
- net finance costs (refer to note A5)
Considered impaired
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
165.2
129.3
129.3
27.1
29.9
2.8
-
-
-
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
-
10.4
14.4
24.8
-
6.2
11.2
17.4
-
-
-
-
-
-
-
-
2018
$m
484.4
(187.2)
(52.4)
(34.3)
(0.1)
210.4
Total
176.6
$m
(14.0)
711.5
162.6
1,868.0
30.1
2,579.5
192.7
484.4
187.2
490.0
(12.8)
Total
(18.7)
$m
17.5
639.6
(14.0)
1,792.6
2,432.2
599.7
164.5
Total
419.6
$m
163.7
2017
28.7
$m
16.0
208.4
599.7
(164.5)
129.3
(12.8)
33.3
(41.7)
14.0
176.6
(0.7)
380.0
41
46
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 95
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
Other receivables
The Group's operating segments have been determined based on the internal management reporting structure and the
Other receivables are not past due or considered impaired. It is expected that these balances will be received as they
nature of products and services provided by the Group. They reflect the business level at which financial information is
fall due.
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The chart below compares the ageing of trade receivables and amounts considered impaired as at 30 June 2018 and
The Group has three reportable segments:
30 June 2017 respectively.
Sydney
Gold Coast
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Trade receivables ageing profile
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Brisbane
250
200
2018
150
Gross revenues - VIP a
Gross revenues - domestic a
m
$
100
Segment revenue (refer to note A2)
50
Segment
tax,
depreciation, amortisation and significant items
earnings
interest,
before
Sydney
$m
571.4
1,165.3
1,736.7
285.8
Gold Coast
$m
Brisbane
$m
132.8
376.9
509.7
116.9
7.3
325.8
333.1
81.7
0
Depreciation and amortisation (refer to note A4)
2017
2018
2017
2018
2018
114.2
2017
2018
Capital expenditure
Total trade
receivables
Not yet due
(0-30 days)
30 days - 1 Year
(past due)
192.0
1-3 Years
(past due)
42.3
2017
258.5
2018
30.7
2017
39.5
3+ Years
(past due)
Considered impaired
Sydney
$m
Gold Coast
Not impaired
$m
Brisbane
$m
2017
Gross revenues - VIP a
Provision for impairment of trade receivables
Gross revenues - domestic a
The Group recognises a provision for impairment of trade receivables when there is objective evidence that an
individual trade debt is impaired. Factors considered when determining if an impairment exists include the age of the
2,432.2
Segment revenue (refer to note A2)
debt, discussions with the patron, management's experienced judgement, and other specific facts related to the debt.
Segment earnings before interest, tax, depreciation,
amortisation and significant items
547.9
1,137.9
639.6
1,792.6
66.3
331.3
25.4
323.4
1,685.8
104.2
397.6
599.7
401.1
348.8
94.4
Depreciation and amortisation (refer to note A4)
Capital expenditure
100.2
180.0
36.3
209.1
28.0
30.5
164.5
419.6
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
2018
$m
484.4
(187.2)
(52.4)
2017
$m
599.7
(164.5)
(12.8)
(34.3)
(41.7)
(0.1)
210.4
(0.7)
380.0
41
47
Total
$m
711.5
1,868.0
2,579.5
484.4
187.2
490.0
Total
$m
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 96
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
B3 Derivative financial instruments
The Group's operating segments have been determined based on the internal management reporting structure and the
2017
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
$m
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Current assets
The Group has three reportable segments:
Cross currency swaps
Sydney
Forward currency contracts
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
2018
$m
47.0
1.4
3.6
0.3
48.4
3.9
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Gold Coast
Non current assets
Brisbane
Cross currency swaps
Forward currency contracts
2018
Interest rate swaps
Gross revenues - VIP a
Gross revenues - domestic a
Current liabilities
Segment revenue (refer to note A2)
Cross currency swaps
tax,
earnings
Segment
Interest rate swaps
depreciation, amortisation and significant items
interest,
before
Depreciation and amortisation (refer to note A4)
Non current liabilities
Capital expenditure
Cross currency swaps
Interest rate swaps
Sydney
$m
571.4
1,165.3
1,736.7
285.8
114.2
192.0
Gold Coast
$m
132.8
376.9
509.7
116.9
42.3
258.5
57.4
Brisbane
-
$m
-
7.3
57.4
325.8
333.1
0.3
3.9
81.7
4.2
30.7
39.5
18.4
150.0
Total
0.2
$m
0.9
711.5
151.1
1,868.0
2,579.5
-
18.4
484.4
18.4
187.2
490.0
-
37.3
Total
37.3
$m
Sydney
$m
Gold Coast
$m
7.0
Brisbane
25.4
$m
2017
Gross revenues - VIP a
Net financial assets
Gross revenues - domestic a
Net derivative assets down $112.1 million due to the refinancing of the USPP.
Segment revenue (refer to note A2)
Valuation of derivatives and other financial instruments
The valuation of derivatives and financial instruments is based on market conditions at the balance sheet date. The
Segment earnings before interest, tax, depreciation,
value of the instrument fluctuates on a daily basis and the actual amounts realised may differ materially from their
amortisation and significant items
value at the balance sheet date.
Depreciation and amortisation (refer to note A4)
Refer to note E2 for additional financial instruments disclosure.
Capital expenditure
639.6
143.8
1,792.6
547.9
1,137.9
25.4
31.7
323.4
66.3
331.3
1,685.8
2,432.2
599.7
419.6
164.5
397.6
104.2
348.8
401.1
180.0
100.2
209.1
36.3
94.4
30.5
28.0
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
2018
$m
484.4
(187.2)
(52.4)
2017
$m
599.7
(164.5)
(12.8)
(34.3)
(41.7)
(0.1)
210.4
(0.7)
380.0
41
48
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Opening balance at beginning of the year
Capital expenditure
Closing balance at end of the year
81.5
192.0
1,706.3
258.5
81.5
1,937.4
187.4
183.3
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
97
A Key income statement disclosures
A1 Segment information
B4 Property, plant and equipment
The Group's operating segments have been determined based on the internal management reporting structure and the
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Freehold
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
land
The Group has three reportable segments:
Freehold
and
leasehold
buildings
Leasehold
improvements
Plant and
equipment
Total
Note
$m
$m
$m
$m
$m
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
1,001.7
2,047.9
286.1
81.5
3,417.2
Comprises Treasury's casino operations, including hotel, restaurants and bars.
-
-
281.6
(1.5)
2018
Sydney
Cost
Opening balance at beginning of the year
Gold Coast
Additions
Brisbane
Disposals
Reclassification / transfer a
Closing balance at end of the year b
2018
Gross revenues - VIP a
Accumulated depreciation
Gross revenues - domestic a
Opening balance at beginning of the year
Depreciation expense
Segment revenue (refer to note A2)
Disposals / transfers
tax,
Segment
depreciation, amortisation and significant items
Closing balance at end of the year
earnings
interest,
before
A4
Depreciation and amortisation (refer to note A4)
Carrying Amount
2017
Cost
2017
Opening balance at beginning of the year
Gross revenues - VIP a
Additions
Gross revenues - domestic a
Disposals
Segment revenue (refer to note A2)
Reclassification / transfer
Segment earnings before interest, tax, depreciation,
Closing balance at end of the year
amortisation and significant items
Accumulated depreciation
Depreciation and amortisation (refer to note A4)
Opening balance at beginning of the year
Capital expenditure
Depreciation expense
A4
Disposals
a
Closing balance at end of the year
Carrying Amount
Sydney
-
81.5
$m
2,340.0
12.0
Gold Coast
$m
Brisbane
$m
1,135.1
(8.8)
571.4
1,165.3
-
-
1,736.7
-
285.8
-
114.2
341.6
63.7
(2.7)
402.6
132.8
376.9
509.7
42.3
7.0
-
(0.4)
292.7
98.7
10.7
-
160.9
(18.7)
7.3
325.8
616.4
333.1
80.8
(18.5)
30.7
39.5
385.3
456.4
116.9
109.4
81.7
678.7
Sydney
$m
Gold Coast
$m
Brisbane
$m
81.5
547.9
-
1,137.9
1,794.7
267.8
-
1,685.8
-
(9.3)
(5.3)
66.3
331.3
397.6
279.7
6.8
(0.3)
(0.1)
922.8
102.5
25.4
323.4
(30.5)
348.8
6.9
81.5
401.1
2,047.9
94.4
286.1
1,001.7
104.2
3,417.2
599.7
100.2
-
180.0
-
306.7
43.6
36.3
209.1
88.6
10.4
28.0
562.5
30.5
83.1
164.5
957.8
419.6
137.1
-
(8.7)
(0.3)
(29.2)
(38.2)
-
341.6
98.7
616.4
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Includes reclassifications of $2.8 million (2017: $1.5 million) from intangibles to plant and equipment (refer to note B5).
81.5
Opening balance at beginning of the year
1,488.0
Reconciliation of reportable segment profit to profit before income tax
Closing balance at end of the year
1,706.3
Segment earnings before interest, tax, depreciation, amortisation and
significant items
a
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
b Includes capital works in progress of:
- net finance costs (refer to note A5)
Leasehold improvements - at cost
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Plant and equipment - at cost
Buildings - at cost
81.5
Profit before income tax (PBT)
Total capital works in progress
2018
$m
360.3
385.3
191.1
187.4
484.4
(187.2)
2018
(52.4)
$m
40.7
(34.3)
3.0
(0.1)
147.2
210.4
190.9
Additions of $449.5 million, up 19.2% on the pcp consist predominantly of redevelopment works in the Gold
Coast and Sydney properties. For details on capital activities refer to section 2.6 of the Directors' Report.
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
49
449.5
(20.2)
Total
2.8
$m
3,849.3
711.5
1,868.0
1,056.7
155.2
2,579.5
(21.2)
484.4
1,190.7
187.2
2,360.5
490.0
2,658.6
Total
$m
3,078.7
639.6
377.1
1,792.6
(40.1)
2,432.2
1.5
1,056.7
2017
$m
2,120.9
2,360.5
599.7
(164.5)
2017
(12.8)
$m
33.0
(41.7)
3.8
(0.7)
47.8
380.0
84.6
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 98
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
Property, plant and equipment is comprised of the following assets:
The Group's operating segments have been determined based on the internal management reporting structure and the
− Freehold land - Gold Coast property;
nature of products and services provided by the Group. They reflect the business level at which financial information is
− Freehold and leasehold buildings - Brisbane, Gold Coast and Sydney properties;
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
− Leasehold improvements - Brisbane property; and
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
− Plant and equipment - operational and other equipment.
The Group has three reportable segments:
Asset useful lives and residual values
Sydney
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
For the accounting policy on depreciation and useful lives of property, plant and equipment refer to note A4.
and bars.
Capital works in progress
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
Major ongoing projects include the refurbishment at the Sydney property and the expansion and refurbishment of the
Gold Coast property. Minor refurbishment is also being undertaken at the Brisbane property.
Brisbane
Impairment
Refer to note B6 for details of the accounting policy and key assumptions included in the impairment calculation.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Sydney
B5 Intangible assets
2018
Gross revenues - VIP a
Gross revenues - domestic a
Segment revenue (refer to note A2)
Goodwill
$m
Note
interest,
before
earnings
tax,
Segment
depreciation, amortisation and significant items
2018
Cost
Depreciation and amortisation (refer to note A4)
Opening balance at beginning of the year
Additions a
Capital expenditure
Disposals
Reclassification / transfer b
1,442.2
1,442.2
2017
Closing balance at end of the year
Gross revenues - VIP a
Accumulated amortisation
Opening balance at beginning of the year
Gross revenues - domestic a
Amortisation expense
Segment revenue (refer to note A2)
Disposals
Segment earnings before interest, tax, depreciation,
Closing balance at end of the year
amortisation and significant items
Carrying Amount
Depreciation and amortisation (refer to note A4)
Opening balance at beginning of the year
A4
1,442.2
Closing balance at end of the year
Capital expenditure
1,442.2
-
-
-
-
-
-
-
Gold Coast
$m
Brisbane
$m
$m
571.4
Sydney and
Brisbane
1,165.3
casino
licences
1,736.7
$m
285.8
Sydney
casino
concessions
Software a
132.8
376.9
509.7
$m
116.9
114.2
294.7
192.0
-
-
42.3
100.0
258.5
-
-
195.7
40.5
(3.6)
$m
$m
7.3
325.8
333.1
Other
81.7
30.7
27.2
39.5
-
(7.1)
-
Gold Coast
$m
100.0
(2.8)
-
Brisbane
$m
20.1
229.8
23.1
66.3
331.3
2.9
397.6
-
25.4
323.4
10.2
2.3
348.8
(7.1)
108.6
22.4
(3.6)
-
Sydney
$m
294.7
547.9
66.1
1,137.9
3.2
1,685.8
-
69.3
401.1
100.2
228.6
180.0
225.4
2017
a
Cost
Opening balance at beginning of the year
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
1,442.2
294.7
100.0
162.4
-
-
-
Additions
-
-
-
-
-
-
1,442.2
Disposals
Reconciliation of reportable segment profit to profit before income tax
Reclassification / transfer
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Closing balance at end of the year
Depreciation and amortisation
Accumulated amortisation
Significant items (refer to note A7)
Opening balance at beginning of the year
Amortisation expense
Unallocated items:
Disposals
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
Closing balance at end of the year
for using the equity method (refer to note D5)
Carrying Amount
Profit before income tax (PBT)
Opening balance at beginning of the year
Closing balance at end of the year
1,442.2
1,442.2
231.8
228.6
294.7
62.9
66.1
3.2
A4
-
-
-
-
-
100.0
20.2
2.9
-
23.1
79.8
76.9
27.2
2018
$m
-
-
-
27.2
484.4
(187.2)
(52.4)
7.2
3.0
(34.3)
-
10.2
(0.1)
210.4
20.0
17.0
42.5
(7.7)
(1.5)
195.7
99.5
17.1
(8.0)
108.6
62.9
87.1
a
b
Includes capital works in progress of $27.2 million (2017: $24.5 million).
Includes reclassifications of $2.8 million (2017: $1.5 million) to property, plant and equipment (refer to note B4).
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
Total
$m
711.5
1,868.0
Total
2,579.5
$m
484.4
187.2
2,059.8
490.0
40.5
(10.7)
(2.8)
Total
$m
2,086.8
639.6
208.0
1,792.6
30.8
2,432.2
(10.7)
2,026.5
2017
42.5
$m
(7.7)
(1.5)
2,059.8
599.7
(164.5)
(12.8)
26.2
189.8
(8.0)
(41.7)
208.0
(0.7)
380.0
1,836.7
1,851.8
41
50
26.0
94.4
127.4
104.2
5.4
228.1
599.7
36.3
76.9
87.1
74.0
209.1
102.4
28.0
17.0
30.5
14.7
164.5
1,851.8
1,858.7
419.6
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 99
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
Intangible asset additions relate predominantly to software as the Group progresses its strategic priority to
The Group's operating segments have been determined based on the internal management reporting structure and the
maximise value from technology, including further enhancing gaming and loyalty experience and delivering
nature of products and services provided by the Group. They reflect the business level at which financial information is
integrated and new IT platforms.
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Asset useful lives and residual values
Intangible assets are amortised using the straight line method as follows:
The Group has three reportable segments:
− The Sydney casino licence is amortised from its date of issue until expiry in 2093.
Sydney
− The Sydney casino concessions granted by the New South Wales government include effective casino exclusivity
and product concessions in New South Wales which are amortised over the period of expected benefits, which is
until 2019 and 2093 respectively.
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
− The Brisbane casino licence is amortised over the remaining life of the lease to which the licence is linked, which
Brisbane
expires in 2070. The Group will continue to amortise the casino licence over its current term up until it is
surrendered, following the opening of the Integrated Resort at Queen's Wharf Brisbane (QWB) which is expected in
Total
2022.
$m
2018
− Software is amortised over useful lives of 3 to 10 years.
Gross revenues - VIP a
711.5
− Other assets include the contribution to the construction costs of the state government owned Gold Coast
Gross revenues - domestic a
1,868.0
Convention and Exhibition Centre. The Group's Gold Coast casino is deriving future benefits from the contribution,
which is being amortised over a period of 50 years.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Gold Coast
$m
Brisbane
$m
571.4
1,165.3
7.3
325.8
132.8
376.9
Sydney
Segment revenue (refer to note A2)
1,736.7
2,579.5
509.7
333.1
$m
earnings
Goodwill and impairment testing
tax,
Segment
Goodwill is assessed for impairment on an annual basis and is carried at cost less accumulated impairment losses.
depreciation, amortisation and significant items
Refer to note B6 for the accounting policy on asset impairment and details of key assumptions included in the
Depreciation and amortisation (refer to note A4)
impairment testing calculation.
interest,
before
285.8
116.9
484.4
114.2
187.2
42.3
81.7
30.7
B6 Impairment testing and goodwill
Capital expenditure
Goodwill acquired through business combinations has been allocated to the applicable cash generating unit for
impairment testing. Each cash generating unit represents a business operation of the Group.
39.5
490.0
258.5
192.0
Carrying amount of goodwill allocated to each cash generating unit
2017
Gross revenues - VIP a
Cash generating unit
Gross revenues - domestic a
(Reportable segment)
547.9
Sydney
1,137.9
$m
66.3
Gold Coast
331.3
$m
25.4
Brisbane
323.4
$m
Sydney
$m
Gold Coast
$m
Brisbane
$m
Total
$m
Total carrying
639.6
amount
1,792.6
$m
Segment revenue (refer to note A2)
2018
Segment earnings before interest, tax, depreciation,
2017
amortisation and significant items
1,013.5
1,685.8
165.5
397.6
263.2
348.8
1,013.5
401.1
165.5
94.4
263.2
104.2
2,432.2
1,442.2
1,442.2
599.7
a
30.5
28.0
36.3
419.6
180.0
164.5
100.2
209.1
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
The recoverable amount of each of the three cash generating units at year end (Sydney, Gold Coast and Brisbane) is
Depreciation and amortisation (refer to note A4)
determined based on 'fair value less costs of disposal', which is calculated using the discounted cash flow approach.
This approach utilises cash flow forecasts that represent a market participant's view of the future cash flows that would
Capital expenditure
arise from operating and developing the Group's assets. These cash flows are principally based upon Board approved
business plans for a five-year period, together with longer term projections and approved capital investment plans,
extrapolated using an implied terminal growth rate of 2.5% (2017: 2.5%). These cash flows are then discounted using
a relevant long term post-tax discount rate specific to each cash generating unit, ranging between 8.3% to 8.9% (2017:
2017
8.9% to 9.7%). The pre-tax discount rates range between 10.2% to 11.0% (2017: 12.7% to 13.8%).
$m
Reconciliation of reportable segment profit to profit before income tax
No impairment was recognised in any of the cash generating units at 30 June 2018 (2017: nil). The
Segment earnings before interest, tax, depreciation, amortisation and
performance of the Group was driven by growth in the domestic business (+4.1%) and in the International VIP
599.7
significant items
Rebate Business (IRB) with revenue up 11.2%, despite a low win rate.
(164.5)
Depreciation and amortisation
Key assumptions
(12.8)
Significant items (refer to note A7)
The fair value measurement is valued using level 3 valuation techniques (refer to note E2(vi) for details of the levels).
The key assumptions on which management based its cash flow projections when determining 'fair value less costs of
Unallocated items:
disposal' are as follows:
(41.7)
- net finance costs (refer to note A5)
i. Cash flow forecasts
- share of net profit/(loss) of associate and joint venture entities accounted
The cash flow forecasts are based upon Board approved business plans for a five-year period, together with longer
(0.7)
for using the equity method (refer to note D5)
term projections, growth rates and approved capital investment plans for each cash generating unit.
Profit before income tax (PBT)
ii. Terminal value
The terminal growth rate used is in line with the forecast long term underlying growth rate in the Consumer Price Index
(CPI).
484.4
(187.2)
(52.4)
2018
$m
(34.3)
210.4
380.0
(0.1)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
51
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 100
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
Comprises Treasury's casino operations, including hotel, restaurants and bars.
A Key income statement disclosures
A1 Segment information
iii. Discount rates
The Group's operating segments have been determined based on the internal management reporting structure and the
Discount rates applied are based on the post tax weighted average cost of capital applicable to the relevant cash
nature of products and services provided by the Group. They reflect the business level at which financial information is
generating unit.
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
iv. Regulatory changes
Queensland
The Group has three reportable segments:
Upon opening of the Integrated Resort in 2022, the existing Brisbane casino will cease to operate and the Group will
act as the operator of the QWB casino.
Sydney
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
The Group currently holds a perpetual casino licence in Brisbane that is attached to the lease of the current Brisbane
Gold Coast
site that expires in 2070. Upon opening of the QWB casino, the Group's casino licence will be surrendered and
Destination Brisbane Consortium (DBC) will be granted a casino licence for 99 years including an exclusivity period of
Brisbane
25 years.
The Group will surrender the Brisbane casino licence in exchange for the right to operate the new QWB casino.
New South Wales
2018
On 8 July 2014, Liquor and Gaming NSW issued a restricted gaming licence to Crown Resorts Limited (Crown) to
Gross revenues - VIP a
operate a restricted gaming facility at Barangaroo South, Crown Sydney Hotel Resort (Crown Sydney). On 28 June
Gross revenues - domestic a
2016, Crown announced that conditional planning approval had been received from the NSW Planning Assessment
Commission, and that Crown is expecting to complete construction and open Crown Sydney in 2021. The expected
Segment revenue (refer to note A2)
impact of Crown Sydney has been taken into consideration in determining the recoverable amount of Sydney's cash
tax,
Segment
generating unit at 30 June 2018. As further details of the final scope and timing of the proposed gaming facility
depreciation, amortisation and significant items
become known, management will continue to consider the impact that this may have on the cash generating unit's
carrying value.
Depreciation and amortisation (refer to note A4)
v. Sensitivities
Capital expenditure
The key estimates and assumptions used to determine the 'fair value less costs of disposal' of a cash generating unit
are based on management's current expectations after considering past experience, future investment plans and
external information. They are considered to be reasonably achievable, however, significant changes in any of these
key estimates, assumptions or regulatory environments may result in a cash generating unit's carrying value exceeding
2017
its recoverable value, requiring an impairment charge to be recognised.
Gross revenues - VIP a
For the Gold Coast, management considers that a 20% reduction in the expected growth rate is a reasonably possible
Gross revenues - domestic a
change that could give rise to a potential impairment.
Gold Coast
$m
Gold Coast
$m
Brisbane
$m
Brisbane
$m
Sydney
$m
711.5
1,868.0
571.4
1,165.3
639.6
1,792.6
547.9
1,137.9
7.3
325.8
132.8
376.9
25.4
323.4
66.3
331.3
Total
$m
Total
$m
earnings
interest,
Sydney
1,736.7
2,579.5
before
484.4
187.2
490.0
509.7
333.1
285.8
116.9
258.5
114.2
192.0
42.3
81.7
30.7
39.5
$m
Segment revenue (refer to note A2)
For the Sydney property, the impact of Crown Sydney on the projected earnings and cash generating unit's carrying
value has been assessed, taking into consideration the expected increase in competition as well as the expected
Segment earnings before interest, tax, depreciation,
increase in market size. A reasonably possible change in any of the assumptions used does not result in an
amortisation and significant items
impairment charge at 30 June 2018, however management will continue to monitor the assumptions with regards to
the expected impact of Crown Sydney on Sydney's carrying value.
Depreciation and amortisation (refer to note A4)
1,685.8
2,432.2
164.5
599.7
397.6
401.1
348.8
104.2
100.2
94.4
36.3
28.0
Impairment of assets
Capital expenditure
Goodwill and indefinite life intangible assets are tested for impairment at least annually. Property, plant and equipment,
other intangible assets and other financial assets are considered for impairment if there is a reason to believe that
a
impairment may be necessary. Factors taken into consideration in reaching such a decision include the economic
viability of the asset itself and where it is a component of a larger economic entity, the viability of the unit itself.
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
419.6
209.1
180.0
30.5
2018
$m
2017
$m
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
484.4
(187.2)
(52.4)
599.7
(164.5)
(12.8)
(34.3)
(41.7)
(0.1)
210.4
(0.7)
380.0
41
52
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
101
A Key income statement disclosures
A1 Segment information
B7 Interest bearing liabilities
Liabilities
The Group's operating segments have been determined based on the internal management reporting structure and the
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
2017
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
$m
The Group has three reportable segments:
Current
Bank loans - unsecured (net of unamortised borrowing costs) (i)
Sydney
Private placement - US dollar - amortised cost (ii)
Gold Coast
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
-
130.0
128.7
5.1
2018
$m
133.8
130.0
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Brisbane
Non current
Bank loans - unsecured (net of unamortised borrowing costs) (i)
Private placement - US dollar - amortised cost (ii)
2018
Gross revenues - VIP a
Gross revenues - domestic a
The Group has undrawn bank facilities of $580.0 million at year end and an average drawn debt maturity of
5.95 years.
Segment revenue (refer to note A2)
Gold Coast
$m
88.3
Brisbane
597.9
$m
711.5
915.0
1,868.0
571.4
1,165.3
446.9
Total
468.1
$m
7.3
686.2
325.8
132.8
376.9
Sydney
2,579.5
1,736.7
333.1
509.7
$m
Net debt was $678.0 million, down 13.9% on the pcp with gearing levels increased to 1.4x at 30 June 2018
tax,
earnings
Segment
compared to 1.3x at 30 June 2017.
depreciation, amortisation and significant items
interest,
before
116.9
285.8
484.4
81.7
Refer to note F8 (iii) for Capital management disclosures and the calculation of the gearing ratio.
Depreciation and amortisation (refer to note A4)
114.2
30.7
42.3
192.0
(i) Bank loans - unsecured (net of unamortised borrowing costs)
Capital expenditure
Syndicated revolving facility
The Group has drawn down $90.0 million of the syndicated revolving facility (SFA).
258.5
Sydney
$m
Gold Coast
$m
2017
Gross revenues - VIP a
2018
Gross revenues - domestic a
Type
Syndicated revolving facility - tranche A
Segment revenue (refer to note A2)
Syndicated revolving facility - tranche B
Segment earnings before interest, tax, depreciation,
Syndicated revolving facility - tranche C
amortisation and significant items
Syndicated revolving facility - tranche D
Depreciation and amortisation (refer to note A4)
Capital expenditure
Facility amount
$m
547.9
1,137.9
100.0
1,685.8
250.0
100.0
401.1
200.0
100.2
650.0
180.0
Unutilised at 30 June
66.3
331.3
397.6
94.4
36.3
209.1
10.0
250.0
100.0
200.0
560.0
348.8
104.2
28.0
30.5
39.5
Brisbane
$m
25.4
323.4
$m
187.2
490.0
Total
$m
639.6
1,792.6
Maturity date
July 2021
2,432.2
July 2019
July 2022
599.7
July 2023
164.5
419.6
2017
a
Type
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Facility amount
$m
Unutilised at 30 June
$m
2018
$m
Maturity date
2017
July 2018
$m
July 2019
250.0
250.0
Syndicated revolving facility - tranche A
Syndicated revolving facility - tranche B
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
599.7
significant items
Interest is variable, linked to BBSY (Bank Bill Swap Bid Rate), plus a margin tiered against the reported gearing ratio at
(164.5)
Depreciation and amortisation
the end of certain test dates.
(12.8)
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
484.4
(187.2)
(52.4)
-
200.5
(34.3)
(41.7)
200.5
500.0
(0.1)
(0.7)
Profit before income tax (PBT)
210.4
380.0
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
53
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 102
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
Working capital facility
The Group's operating segments have been determined based on the internal management reporting structure and the
2018
nature of products and services provided by the Group. They reflect the business level at which financial information is
Type
Maturity date
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
January 2019
Working capital facility
The Group has three reportable segments:
Unutilised at 30 June
$m
20.0
Facility amount
$m
150.0
2017
Sydney
Type
Facility amount
$m
Unutilised at 30 June
$m
150.0
Working capital facility
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Gold Coast
Interest is variable, linked to BBSY, plus a margin tiered against the reported gearing ratio at the end of certain test
Brisbane
dates.
The Group has entered into interest rate swaps agreements to hedge underlying debt obligations and allow $100
million of floating rate borrowings (comprising syndicated revolving facility and working capital facility) to be swapped
2018
to fixed rate borrowings. Further details about the Group's exposure to interest rate movements are provided in notes
Gross revenues - VIP a
E1 and E2.
Gross revenues - domestic a
(ii) US Private Placement (USPP)
The Group's USPP borrowings are summarised below.
Segment revenue (refer to note A2)
2018
tax,
Segment
Type
depreciation, amortisation and significant items
Gold Coast
$m
Brisbane
$m
711.5
1,868.0
571.4
1,165.3
7.3
325.8
132.8
376.9
Maturity date
Maturity date
January 2019
Total
$m
$m (AUD)
earnings
285.8
$m USD
interest,
Sydney
1,736.7
2,579.5
before
484.4
116.9
509.7
333.1
81.7
$m
-
Series B
Depreciation and amortisation (refer to note A4)
Series C
Capital expenditure
Series D
Series E
Series F
2017
Series G
Gross revenues - VIP a
Series H
Gross revenues - domestic a
Segment revenue (refer to note A2)
2017
Segment earnings before interest, tax, depreciation,
Type
amortisation and significant items
Series A
Depreciation and amortisation (refer to note A4)
Series B
Capital expenditure
192.0
114.2
105.0
9.0
12.5
10.0
Sydney
60.0
$m
31.0
215.9
547.9
1,137.9
443.4
1,685.8
$m USD
401.1
100.0
360.0
100.2
180.0
460.0
42.3
258.5
Gold Coast
$m
66.3
331.3
397.6
94.4
36.3
209.1
39.5
30.7
98.1
11.5
16.0
12.8
Brisbane
76.9
$m
39.7
276.5
25.4
323.4
531.5
348.8
$m (AUD)
104.2
94.0
336.0
430.0
28.0
30.5
490.0
June 2021
187.2
August 2025
August 2027
August 2025
Total
August 2027
$m
August 2025
639.6
August 2027
1,792.6
2,432.2
Maturity date
599.7
June 2018
164.5
June 2021
419.6
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
The $531.5 million (2017: $430.0 million) USPP borrowings are stated in the table above at the AUD amount repayable
a
under cross currency swaps at maturity. Interest is a combination of fixed and variable, linked to BBSW (Bank Bill
Swap Rate), and a defined gearing ratio at the end of certain test dates. The $443.4 million USD (2017: $460.0 million)
translated at 30 June 2018 spot rate is $598.8 million AUD (2017: $598.1 million).
All of the above borrowings are subject to financial undertakings as to gearing and interest cover.
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
Fair value disclosures
significant items
Details of the fair value of the Group's interest bearing liabilities are set out in note E2.
Depreciation and amortisation
Financial Risk Management
As a result of the USPP borrowings, the Group is exposed to foreign currency risk through the movements in
Significant items (refer to note A7)
USD/AUD exchange rate. The Group has entered into cross currency swaps in order to hedge this exposure. As at 30
Unallocated items:
June 2018, 100% of the USPP borrowings balance of US$443.4 million (2017: $460.0 million) is hedged.
- net finance costs (refer to note A5)
The Group is also exposed to the interest rate risk as a result of bank loans and the USPP borrowings. To hedge
- share of net profit/(loss) of associate and joint venture entities accounted
against this risk, the Group has entered into interest rate swaps. As at 30 June 2018, out of the total interest bearing
for using the equity method (refer to note D5)
liabilities, 56.2% (2017: 60.3%) has been hedged against the interest rate risk. Further details about the Group's
Profit before income tax (PBT)
exposure to interest rate and foreign currency movements are provided in notes E1 and E2.
484.4
(187.2)
(52.4)
599.7
(164.5)
(12.8)
2018
$m
2017
$m
(41.7)
(34.3)
210.4
380.0
(0.1)
(0.7)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
54
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
103
A Key income statement disclosures
A1 Segment information
C Commitments, contingencies and subsequent events
C1 Commitments
The Group's operating segments have been determined based on the internal management reporting structure and the
nature of products and services provided by the Group. They reflect the business level at which financial information is
(i) Operating lease commitments a
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
2017
The Group has three reportable segments:
$m
2018
$m
Not later than one year
Sydney
Later than one year but not later than five years
Later than five years
Gold Coast
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
10.4
29.0
97.0
14.3
11.4
79.1
Brisbane
a The Group leases property (including Sydney and Brisbane property leases) under operating leases expiring between 1 to 75
Comprises Treasury's casino operations, including hotel, restaurants and bars.
years. Leases generally provide the Group with a right of renewal at which time all terms are renegotiated. Lease payments
comprise a base amount plus an incremental contingent rental. Contingent rentals are based on either movements in the CPI or
are subject to market rate review. Operating lease commitments also include commitments in relation to the leasing of aircraft.
$m
Gold Coast
$m
Brisbane
$m
Total
$m
Sydney
136.4
104.8
2018
Gross revenues - VIP a
(ii) Other commitments b
Gross revenues - domestic a
Not later than one year
Segment revenue (refer to note A2)
Later than one year but not later than five years
tax,
Segment
Later than five years
depreciation, amortisation and significant items
earnings
interest,
before
Depreciation and amortisation (refer to note A4)
571.4
1,165.3
132.8
376.9
1,736.7
285.8
114.2
509.7
116.9
42.3
7.3
325.8
64.3
333.1
1.3
-
81.7
65.6
30.7
711.5
1,868.0
197.5
2,579.5
4.2
-
484.4
201.7
187.2
b Other commitments as at 30 June 2018 mainly include capital construction and related costs in connection with the Gold Coast
Capital expenditure
192.0
258.5
39.5
490.0
refurbishment and redevelopment in Sydney.
The Group has current capital commitments of approximately $1.1 billion into Destination Brisbane Consortium to fund
Total
the construction of the Integrated Resort which is expected to open in 2022 (subject to various approvals, including
2017
$m
Board approvals of the proposed detailed design).
Gross revenues - VIP a
Commitments include operating lease commitments for the Sydney and Brisbane properties, as well as capital
Gross revenues - domestic a
commitments in relation to the redevelopment of the Gold Coast and Sydney, both of which are well underway.
Refer to note D5 for commitments in respect of investment in associate and joint venture entities.
Segment revenue (refer to note A2)
Gold Coast
$m
Brisbane
$m
Sydney
$m
547.9
1,137.9
639.6
1,792.6
66.3
331.3
25.4
323.4
1,685.8
2,432.2
397.6
348.8
C2 Contingent liabilities
Segment earnings before interest, tax, depreciation,
Legal challenges
amortisation and significant items
There are outstanding legal actions between the Company and its controlled entities and third parties as at 30 June
2018. The Group has notified its insurance carrier of all relevant litigation and believes that any damages (other than
Depreciation and amortisation (refer to note A4)
exemplary damages) that may be awarded against the Group, in addition to its costs incurred in connection with the
Capital expenditure
action, will be covered by its insurance policies where such policies are in place. Where there are no policies in place,
provisions are made for known obligations where the existence of a liability is probable and can be reasonably
quantified. As the outcomes of these actions remain uncertain, contingent liabilities exist for possible amounts
eventually payable that are in excess of the amounts covered for by the insurance policies in place or of the amounts
2017
provided for.
$m
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
2018
$m
100.2
401.1
104.2
599.7
209.1
164.5
180.0
419.6
94.4
36.3
28.0
30.5
a
Financial guarantees
Reconciliation of reportable segment profit to profit before income tax
Refer to note E1 for details of financial guarantees provided by the Group at the reporting date.
Segment earnings before interest, tax, depreciation, amortisation and
C3 Subsequent events
599.7
significant items
On 16 August 2018, Destination Gold Coast Consortium (the Groupʼs 33% equal share joint venture with Chow Tai
(164.5)
Depreciation and amortisation
Fook Enterprises Limited and Far East Consortium International Limited) entered into an agreement to commence
(12.8)
Significant items (refer to note A7)
construction in relation to the first residential, hotel and retail tower in the Gold Coast. Destination Gold Coast
Unallocated items:
Consortiumʼs total commitment for development of the tower is $370 million, 8% lower than initial expectations.
(41.7)
- net finance costs (refer to note A5)
Other than those events disclosed in the Directors' Report or elsewhere in these financial statements, there have been
- share of net profit/(loss) of associate and joint venture entities accounted
no other significant events occurring after the balance sheet date and up to the date of this report, which may
(0.7)
for using the equity method (refer to note D5)
materially affect either the Group's operations or results of those operations or the Group's state of affairs.
Profit before income tax (PBT)
484.4
(187.2)
(52.4)
(34.3)
380.0
210.4
(0.1)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
55
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 104
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
D Group structure
D1 Related party disclosures
(i) Parent entity
(ii)
The Group's operating segments have been determined based on the internal management reporting structure and the
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The ultimate parent entity within the Group is The Star Entertainment Group Limited.
The Group has three reportable segments:
Investments in controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following controlled entities in
Sydney
accordance with the accounting policy described in note G. The financial years of all controlled entities are the same
as that of the Company (unless stated otherwise below).
Gold Coast
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Brisbane
Name of controlled entity
Note
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Equity interest
at 30 June
2018
%
Equity interest
at 30 June
2017
%
Total
$m
Parent entity
2018
The Star Entertainment Group Limited
Gross revenues - VIP a
Controlled entities
Gross revenues - domestic a
The Star Entertainment Sydney Holdings Limited
The Star Pty Limited
Segment revenue (refer to note A2)
a
The Star Entertainment Pty Ltd
tax,
interest,
Segment
a b
The Star Entertainment Sydney Properties Pty Ltd
depreciation, amortisation and significant items
a
The Star Entertainment Sydney Apartments Pty Ltd
a
Star City Investments Pty Limited
Depreciation and amortisation (refer to note A4)
Star City Share Plan Company Pty Ltd
Capital expenditure
The Star Entertainment QLD Limited
earnings
before
a b
a b
The Star Entertainment QLD Custodian Pty Ltd
The Star Entertainment Gold Coast Trust
2017
The Star Entertainment International No.1 Pty Ltd
Gross revenues - VIP a
The Star Entertainment International No.2 Pty Ltd
Gross revenues - domestic a
The Star Entertainment (Macau) Limited
The Star Entertainment International No.3 Pty Ltd
Segment revenue (refer to note A2)
EEI Services (Hong Kong) Holdings Limited
Segment earnings before interest, tax, depreciation,
EEI Services (Hong Kong) Limited
amortisation and significant items
EEI C&C Services Pte Ltd
Depreciation and amortisation (refer to note A4)
The Star Entertainment RTO Pty Ltd
The Star Entertainment Finance Limited
Capital expenditure
The Star Entertainment International Pty Ltd
Country of
incorporation
Sydney
Australia
$m
571.4
1,165.3
Australia
Australia
Australia
1,736.7
Australia
Australia
285.8
Equity type
Gold Coast
$m
ordinary shares
132.8
376.9
ordinary shares
ordinary shares
509.7
ordinary shares
ordinary shares
116.9
ordinary shares
Australia
114.2
ordinary shares
42.3
Australia
Australia
192.0
Australia
Australia
Australia
Sydney
$m
ordinary shares
258.5
ordinary shares
ordinary shares
Gold Coast
units
$m
ordinary shares
Australia
547.9
1,137.9
Macau
ordinary shares
ordinary shares
66.3
331.3
Australia
1,685.8
Hong Kong
ordinary shares
397.6
ordinary shares
Hong Kong
401.1
Singapore
ordinary shares
94.4
ordinary shares
Australia
100.2
ordinary shares
36.3
Australia
Australia
180.0
ordinary shares
209.1
ordinary shares
Australia
Australia
ordinary shares
ordinary shares
The Star Entertainment Technology Services Pty Ltd
a
The Star Entertainment Training Company Pty Ltd
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
PPIT Pty Ltd
Australia
ordinary shares
Australia
Australia
Australia
The Star Entertainment International No.4 Pty Ltd
Reconciliation of reportable segment profit to profit before income tax
The Star Entertainment Online Holdings Pty Ltd
Segment earnings before interest, tax, depreciation, amortisation and
The Star Entertainment Online Pty Ltd
significant items
The Star Entertainment Brisbane Holdings Pty Ltd
Depreciation and amortisation
The Star Entertainment Brisbane Operations Pty Ltd
Significant items (refer to note A7)
The Star Entertainment DBC Holdings Pty Ltd
Unallocated items:
The Star Brisbane Car Park Holdings Pty Ltd
- net finance costs (refer to note A5)
The Star Entertainment Gold Coast Holdings Pty Ltd
- share of net profit/(loss) of associate and joint venture entities accounted
The Star Entertainment GC Investments Pty Ltd
for using the equity method (refer to note D5)
The Star Entertainment GC Investments No.1 Pty Ltd
Profit before income tax (PBT)
The Star Entertainment International No.5 Pty Ltd
EEI Services Holdings No.1 Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
c
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
EEI Services Holdings No.2 Pty Ltd
EEI Services (Macau) Limited
The Star Entertainment International Tourism Pty Ltd
c
d
e
Australia
Macau
Australia
ordinary shares
ordinary shares
ordinary shares
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
Brisbane
$m
7.3
100.0
325.8
100.0
333.1
100.0
100.0
81.7
100.0
30.7
100.0
100.0
39.5
100.0
100.0
Brisbane
100.0
$m
100.0
25.4
100.0
100.0
323.4
100.0
348.8
100.0
100.0
104.2
100.0
28.0
100.0
100.0
30.5
100.0
100.0
100.0
2018
100.0
$m
100.0
100.0
100.0
484.4
100.0
(187.2)
100.0
(52.4)
100.0
100.0
(34.3)
100.0
100.0
(0.1)
100.0
210.4
100.0
100.0
100.0
100.0
100.0
711.5
100.0
1,868.0
100.0
2,579.5
100.0
100.0
484.4
100.0
187.2
100.0
100.0
490.0
100.0
100.0
Total
100.0
$m
100.0
639.6
100.0
100.0
1,792.6
100.0
2,432.2
100.0
100.0
599.7
100.0
164.5
100.0
100.0
419.6
100.0
100.0
100.0
2017
100.0
$m
100.0
100.0
100.0
599.7
100.0
(164.5)
100.0
(12.8)
100.0
100.0
(41.7)
100.0
100.0
(0.7)
100.0
380.0
100.0
0.0
0.0
0.0
0.0
41
56
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
105
A Key income statement disclosures
A1 Segment information
a These companies entered into a deed of cross guarantee with The Star Entertainment Sydney Holdings Limited on 31 May 2011,
The Group's operating segments have been determined based on the internal management reporting structure and the
and as such are members of the closed group as defined in Australian Securities and Investments Commission Instrument
nature of products and services provided by the Group. They reflect the business level at which financial information is
2016/785 (refer to note D3).
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
b These companies have provided a charge over their assets and undertakings as explained in note E1.
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
c
The Group has three reportable segments:
d
Incorporated on 1 February 2018
Incorporated on 27 April 2018
(iii) Transactions with controlled entities
e
Sydney
Incorporated on 15 June 2018
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
The Star Entertainment Group Limited
During the period, the Company entered into the following transactions with controlled entities:
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Brisbane
− loans of $602.6 million were advanced by controlled entities (2017: the Company advanced loans of $128.4
Total
$m
Brisbane
− income tax and GST paid on behalf of controlled entities was $230.3 million (2017: $230.6 million).
2018
$m
Gross revenues - VIP a
The amount receivable by the Company from controlled entities at year end is $882.3 million (2017: $279.7 million). All
7.3
the transactions were undertaken on normal commercial terms and conditions.
Gross revenues - domestic a
325.8
Gold Coast
$m
711.5
1,868.0
571.4
1,165.3
132.8
376.9
million); and
Sydney
$m
earnings
(iv) Transactions with other related parties
Segment revenue (refer to note A2)
Other transactions
tax,
Segment
During the period, in addition to equity contributions (refer to note D5), the Group entered into the following
depreciation, amortisation and significant items
transactions with related parties:
− Amount recharged to Destination Brisbane Consortium Integrated Resort Holdings Pty Ltd was $0.3 million (2017:
Depreciation and amortisation (refer to note A4)
$0.2 million);
− Amount paid to Destination Brisbane Consortium Integrated Resort Holdings Pty Ltd was nil (2017: $1.5 million)
Capital expenditure
interest,
1,736.7
2,579.5
before
490.0
192.0
258.5
187.2
484.4
509.7
116.9
114.2
285.8
333.1
81.7
39.5
42.3
30.7
relating to capital works; and
− Amount recharged to Destination Gold Coast Consortium Pty Ltd was $8.3 million (2017: nil), of which $4.7 million
Total
$m
(2017: nil) was held as a receivable at 30 June 2018.
Gold Coast
$m
Brisbane
$m
Sydney
$m
2017
Gross revenues - VIP a
Gross revenues - domestic a
Segment revenue (refer to note A2)
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Depreciation and amortisation (refer to note A4)
Capital expenditure
547.9
1,137.9
1,685.8
401.1
100.2
180.0
66.3
331.3
397.6
94.4
36.3
209.1
25.4
323.4
348.8
104.2
28.0
30.5
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
639.6
1,792.6
2,432.2
599.7
164.5
419.6
2017
$m
599.7
(164.5)
(12.8)
2018
$m
484.4
(187.2)
(52.4)
(34.3)
(41.7)
(0.1)
210.4
(0.7)
380.0
41
57
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 106
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
D2 Parent entity disclosures
The Group's operating segments have been determined based on the internal management reporting structure and the
The Star Entertainment Group Limited, the parent entity of the Group, was incorporated on 2 March 2011.
nature of products and services provided by the Group. They reflect the business level at which financial information is
2017
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
$m
The Group has three reportable segments:
Result of the parent entity
Profit for the year
Sydney
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Total comprehensive income for the year a
Gold Coast
2018
$m
244.8
263.2
263.2
244.8
a
Brisbane
Since the end of the financial year, the Company has declared a final dividend of 13.0 cents per ordinary share (2017: 8.5
cents), which is expected to be paid on 4 October 2018 out of retained earnings at 30 June 2018 to its shareholders (refer to
note A6).
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Sydney
Gold Coast
$m
Brisbane
$m
Total
$m
2018
Financial position of the parent entity
Gross revenues - VIP a
Current assets
Gross revenues - domestic a
Non current assets
Total assets
Segment revenue (refer to note A2)
before
earnings
tax,
Segment
Current liabilities
depreciation, amortisation and significant items
Non current liabilities
Depreciation and amortisation (refer to note A4)
Total liabilities
Capital expenditure
interest,
$m
571.4
1,165.3
1,736.7
285.8
114.2
192.0
132.8
376.9
509.7
116.9
42.3
258.5
Net assets
Sydney
$m
Gold Coast
$m
2017
Total equity of the parent entity
Issued capital
Gross revenues - VIP a
Retained earnings
Gross revenues - domestic a
Shared based payments benefits reserve
Segment revenue (refer to note A2)
Total equity
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Contingent liabilities
There were no contingent liabilities for the parent entity at 30 June 2018 (2017: nil).
Depreciation and amortisation (refer to note A4)
547.9
1,137.9
1,685.8
401.1
100.2
66.3
331.3
397.6
94.4
36.3
1,912.3
7.3
2,590.1
325.8
4,502.4
333.1
22.3
81.7
1,031.4
30.7
1,053.7
39.5
3,448.7
Brisbane
$m
3,070.2
25.4
368.4
323.4
10.1
348.8
3,448.7
104.2
28.0
1,310.0
711.5
2,589.5
1,868.0
3,899.5
2,579.5
43.5
484.4
1,031.5
187.2
1,075.0
490.0
2,824.5
Total
$m
2,580.5
639.6
237.2
1,792.6
6.8
2,432.2
2,824.5
599.7
164.5
Capital expenditure
Capital expenditure
The parent entity does not have any capital expenditure commitments for the acquisition of property, plant and
equipment contracted but not provided for at 30 June 2018 (2017: nil).
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
419.6
209.1
180.0
30.5
Guarantees
2017
The Star Entertainment Group Limited has guaranteed the liabilities of The Star Entertainment Finance Limited and
$m
The Star Entertainment International No.3 Pty Ltd. As at 30 June 2018, the carrying amount included in current
Reconciliation of reportable segment profit to profit before income tax
liabilities at 30 June 2018 was nil (2017: nil), and the maximum amount of these guarantees was $218.3 million (2017:
Segment earnings before interest, tax, depreciation, amortisation and
$117.7 million) (refer to note E1). The Company has also undertaken to support its controlled entities when necessary
599.7
significant items
to enable them to pay their debts as and when they fall due.
(164.5)
Depreciation and amortisation
Accounting policy for investments in controlled entities
(12.8)
Significant items (refer to note A7)
All investments are initially recognised at cost, being the fair value of the consideration given. Subsequently,
investments are carried at cost less any impairment losses.
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
484.4
(187.2)
(52.4)
2018
$m
(34.3)
(41.7)
(0.1)
(0.7)
Profit before income tax (PBT)
210.4
380.0
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
58
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
107
A Key income statement disclosures
A1 Segment information
D3 Deed of cross guarantee
The Group's operating segments have been determined based on the internal management reporting structure and the
The Star Entertainment Sydney Holdings Limited, The Star Pty Limited, The Star Entertainment Pty Ltd, The Star
nature of products and services provided by the Group. They reflect the business level at which financial information is
Entertainment Sydney Properties Pty Ltd, The Star Entertainment Sydney Apartments Pty Ltd and Star City
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Investments Pty Limited are parties to a deed of cross guarantee under which each company guarantees the debts of
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
the others. By entering into the deed, the wholly-owned entities have been relieved from the requirements to prepare a
The Group has three reportable segments:
Financial Report and Directors' Report under Instrument 2016/785 issued by the Australian Securities and Investments
Commission.
Sydney
Consolidated income statement and summary of movements in consolidated earnings
The above companies represent a 'closed group' for the purposes of the Class Order, and as there are no other parties
Gold Coast
to the deed of cross guarantee that are controlled by The Star Entertainment Sydney Holdings Limited, they also
represent the 'extended closed group'.
Brisbane
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Set out below is a consolidated income statement and a summary of movements in consolidated retained earnings for
Total
the year ended 30 June 2018 of the closed group.
2018
$m
Consolidated income statement
Gross revenues - VIP a
Gross revenues - domestic a
Gold Coast
$m
Brisbane
$m
571.4
1,165.3
132.8
376.9
Sydney
$m
7.3
2018
325.8
$m
333.1
1,584.9
711.5
2017
1,868.0
$m
2,579.5
1,620.4
81.7
(0.2)
30.7
(368.9)
39.5
(279.9)
(349.5)
Brisbane
(103.7)
$m
(50.6)
(48.1)
25.4
(52.9)
323.4
(209.9)
348.8
121.2
104.2
-
28.0
121.2
(37.1)
30.5
84.1
484.4
(0.1)
187.2
(369.4)
490.0
(222.4)
(338.3)
Total
(88.1)
$m
(48.7)
(50.3)
639.6
(53.7)
1,792.6
(229.1)
2,432.2
220.3
599.7
-
164.5
220.3
(67.9)
419.6
152.4
84.1
2018
$m
152.4
2017
$m
before
interest,
earnings
Segment revenue (refer to note A2)
Revenue
tax,
Segment
depreciation, amortisation and significant items
Other income
Depreciation and amortisation (refer to note A4)
Government taxes and levies
Capital expenditure
Commissions and fees
Employment costs
Depreciation, amortisation and impairment
2017
Cost of sales
Gross revenues - VIP a
Property costs
Gross revenues - domestic a
Advertising and promotions
Other expenses
Segment revenue (refer to note A2)
Earnings before interest and tax (EBIT)
Segment earnings before interest, tax, depreciation,
Net finance costs
amortisation and significant items
Depreciation and amortisation (refer to note A4)
Profit before income tax (PBT)
Income tax expense
Capital expenditure
Net profit after tax (NPAT)
1,736.7
285.8
114.2
192.0
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
509.7
116.9
42.3
258.5
Gold Coast
$m
66.3
331.3
397.6
94.4
36.3
209.1
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Total comprehensive income for the period
Summary of movements in consolidated retained earnings
Reconciliation of reportable segment profit to profit before income tax
Accumulated profit/(loss) at the beginning of the financial year
Segment earnings before interest, tax, depreciation, amortisation and
Profit for the year
significant items
Dividends paid
Depreciation and amortisation
Accumulated profit at the end of the financial year
Significant items (refer to note A7)
Unallocated items:
Consolidated balance sheet
(41.7)
- net finance costs (refer to note A5)
Set out below is a consolidated balance sheet as at 30 June 2018 of the closed group consisting of The Star
Entertainment Sydney Holdings Limited, The Star Pty Limited, The Star Entertainment Pty Ltd, The Star Entertainment
- share of net profit/(loss) of associate and joint venture entities accounted
Sydney Properties Pty Limited, The Star Entertainment Sydney Apartments Pty Limited, and Star City Investments Pty
(0.7)
for using the equity method (refer to note D5)
Limited.
Profit before income tax (PBT)
130.0
84.1
484.4
(191.0)
(187.2)
23.1
(52.4)
141.6
152.4
599.7
(164.0)
(164.5)
130.0
(12.8)
(34.3)
380.0
210.4
(0.1)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
59
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 108
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
Consolidated balance sheet
The Group's operating segments have been determined based on the internal management reporting structure and the
2017
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
$m
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
ASSETS
The Group has three reportable segments:
Cash assets
Sydney
Trade and other receivables
Inventories
Gold Coast
Other
Total current assets
Brisbane
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
52.7
190.9
8.5
26.2
278.3
28.7
145.0
8.0
21.9
203.6
2018
$m
Property, plant and equipment
2018
Intangible assets
Gross revenues - VIP a
Other assets
Total non current assets
Gross revenues - domestic a
TOTAL ASSETS
Segment revenue (refer to note A2)
before
interest,
earnings
tax,
Segment
LIABILITIES
depreciation, amortisation and significant items
Trade and other payables
Depreciation and amortisation (refer to note A4)
Provisions
Other liabilities
Capital expenditure
Total current liabilities
Deferred tax liabilities
2017
Provisions
Gross revenues - VIP a
Total non current liabilities
Gross revenues - domestic a
TOTAL LIABILITIES
Segment revenue (refer to note A2)
NET ASSETS
Segment earnings before interest, tax, depreciation,
EQUITY
amortisation and significant items
Issued Capital
Depreciation and amortisation (refer to note A4)
Retained Earnings
Capital expenditure
TOTAL EQUITY
Sydney
$m
571.4
1,165.3
1,736.7
285.8
114.2
192.0
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
Gold Coast
$m
132.8
376.9
509.7
116.9
42.3
258.5
Gold Coast
$m
66.3
331.3
397.6
94.4
36.3
209.1
Brisbane
1,341.4
$m
281.1
11.1
7.3
1,633.6
325.8
Total
1,315.0
$m
287.7
11.8
711.5
1,614.5
1,868.0
1,911.9
333.1
1,818.1
2,579.5
81.7
647.3
30.7
34.8
11.3
39.5
693.4
Brisbane
51.3
$m
4.2
25.4
55.5
323.4
748.9
348.8
1,163.0
104.2
1,139.9
28.0
23.1
30.5
1,163.0
484.4
437.7
187.2
38.3
12.2
490.0
488.2
Total
54.5
$m
5.5
639.6
60.0
1,792.6
548.2
2,432.2
1,269.9
599.7
1,139.9
164.5
130.0
419.6
1,269.9
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
D4 Key Management Personnel disclosures
Reconciliation of reportable segment profit to profit before income tax
Compensation of Key Management Personnel
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Short term
Depreciation and amortisation
Long term
Significant items (refer to note A7)
Share based payments
Unallocated items:
8,405
Total compensation
(41.7)
- net finance costs (refer to note A5)
The above reflects the compensation for individuals who are Key Management Personnel of the Group. The note
- share of net profit/(loss) of associate and joint venture entities accounted
should be read in conjunction with the Remuneration Report.
(0.7)
for using the equity method (refer to note D5)
484.4
7,842
(187.2)
334
(52.4)
2,973
599.7
5,757
(164.5)
344
(12.8)
2,304
11,149
(34.3)
(0.1)
2018
2018
$m
$000
2017
2017
$m
$000
Profit before income tax (PBT)
210.4
380.0
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
60
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
109
A Key income statement disclosures
A1 Segment information
D5 Investment in associate and joint venture entities
(i) Destination Brisbane Consortium Integrated Resort Holdings Pty Ltd
The Group's operating segments have been determined based on the internal management reporting structure and the
Set out below are the investments of the Group as at 30 June 2018 which, in the opinion of the Directors, are material
nature of products and services provided by the Group. They reflect the business level at which financial information is
to the Group. The entities listed below have share capital consisting solely of ordinary shares, which are held by the
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Group. The country of incorporation is also their principal place of business, and the proportion of ownership interest is
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
the same as the proportion of voting rights held.
The Group has three reportable segments:
2018
Sydney
Name of entity
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
50
Equity method
Associate
Australia
% of
ownership
Nature of
ownership
Country of
incorporation
Measurement
method
223.7
$m
Destination Brisbane Consortium Integrated Resort
Gold Coast
Holdings Pty Ltd (i)
Festival Car Park Pty Ltd (ii)
Brisbane
Destination Gold Coast Investments Pty Ltd (iii)
Destination Gold Coast Consortium Pty Ltd (iv)
2018
Total equity accounted investments
Gross revenues - VIP a
Gross revenues - domestic a
Australia
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Australia
Joint venture
Joint venture
50
Australia
50
Sydney
33.3
$m
571.4
1,165.3
Gold Coast
$m
Joint venture
Equity method
Equity method
Brisbane
Equity method
$m
132.8
376.9
7.3
325.8
Carrying
amount
13.8
44.6
Total
6.8
$m
288.9
711.5
1,868.0
The Group has partnered with Hong Kong-based organisations Chow Tai Fook Enterprises Limited (CTF) and Far East
Segment revenue (refer to note A2)
Consortium International Limited (FEC) to form Destination Brisbane Consortium (DBC) for the Queenʼs Wharf
tax,
Segment
Brisbane Project. The parties have formed two vehicles (the Integrated Resort Joint Venture and the Residential Joint
depreciation, amortisation and significant items
Venture), which together are responsible for completing the Queenʼs Wharf Brisbane project.
earnings
interest,
2,579.5
1,736.7
before
333.1
509.7
116.9
484.4
285.8
81.7
42.3
114.2
30.7
187.2
192.0
258.5
Depreciation and amortisation (refer to note A4)
Consistent with the ownership structure, the Group will contribute 50% of the capital to the development of the
Integrated Resort and act as the casino operator under a long dated casino management agreement. CTF and FEC
Capital expenditure
will each contribute 25% of the capital to the development of the Integrated Resort. CTF and FEC will each contribute
50% of the capital to undertake the residential and related component of the broader Queenʼs Wharf Brisbane
development. The Group is not a party to the residential apartments development joint venture.
Total
30 June 2018
2017
$m
Commitments and contingent liabilities
Gross revenues - VIP a
DBC has current capital commitments of approximately $2.2 billion to fund the construction of the Integrated Resort,
Gross revenues - domestic a
which is expected to open in 2022 (subject to various approvals, including Board approvals of the proposed detailed
design).
Segment revenue (refer to note A2)
Summarised financial information
Segment earnings before interest, tax, depreciation,
The financial statements of the associate is prepared for the same reporting period as the Group and follow the same
amortisation and significant items
accounting policies of the Group.
Depreciation and amortisation (refer to note A4)
Gold Coast
$m
Brisbane
$m
Sydney
$m
547.9
1,137.9
639.6
1,792.6
25.4
323.4
66.3
331.3
1,685.8
2,432.2
348.8
401.1
490.0
397.6
104.2
599.7
100.2
36.3
94.4
39.5
Capital expenditure
180.0
209.1
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
a
Balance sheet
Total current assets
Total non current assets
Total current liabilities
Reconciliation of reportable segment profit to profit before income tax
Total non current liabilities
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Net assets
Depreciation and amortisation
Significant items (refer to note A7)
Reconciliation to investment carrying amount:
Unallocated items:
Carrying amount at the beginning of the year
- net finance costs (refer to note A5)
Share of equity contributions for the Group
- share of net profit/(loss) of associate and joint venture entities accounted
Share of loss for the period
for using the equity method (refer to note D5)
Capitalised costs
Profit before income tax (PBT)
Carrying amount at the end of the year
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
28.0
2018
30.5
$m
112.1
2018
423.2
$m
(17.4)
(75.0)
484.4
442.9
(187.2)
(52.4)
152.6
(34.3)
72.2
(1.1)
(0.1)
-
210.4
223.7
164.5
2017
419.6
$m
53.2
2017
327.2
$m
(14.8)
(75.0)
599.7
290.6
(164.5)
(12.8)
16.2
(41.7)
136.7
(1.1)
(0.7)
0.8
380.0
152.6
41
61
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 110
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
2017
The Group's operating segments have been determined based on the internal management reporting structure and the
$m
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Income statement
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Loss before tax
The Group has three reportable segments:
Income tax benefit
2018
$m
(2.2)
-
(2.1)
-
Sydney
Loss for the year (continuing operations)
Total comprehensive loss for the year (continuing operations)
Gold Coast
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
(2.2)
(2.2)
(2.1)
(2.1)
Group's share of loss for the year
Brisbane
Dividends received from the associate entity
Comprises Treasury's casino operations, including hotel, restaurants and bars.
(1.1)
(1.1)
Sydney
-
Total
2018
$m
(ii) Festival Car Park Pty Ltd
The Group has a 50% interest in Festival Car Park Pty Ltd, a joint venture that operates the Festival Car Park on
Gross revenues - VIP a
Charlotte Street in Brisbane. This is a joint venture with CTF and FEC.
Gross revenues - domestic a
Commitments and contingent liabilities
Segment revenue (refer to note A2)
The joint venture had capital commitments of $0.1 million (2017: $0.1 million) as at 30 June 2018. There were no other
contingent liabilities.
tax,
Segment
depreciation, amortisation and significant items
Summarised financial information
The financial statements of the joint venture are prepared on financial information that is unaudited and prepared for
Depreciation and amortisation (refer to note A4)
reporting purposes. The joint venture has a financial year end date of 31 March.
Capital expenditure
-
Brisbane
$m
Gold Coast
$m
711.5
1,868.0
571.4
1,165.3
7.3
325.8
132.8
376.9
earnings
interest,
1,736.7
2,579.5
before
187.2
484.4
285.8
509.7
333.1
114.2
192.0
116.9
258.5
42.3
30.7
81.7
$m
Balance sheet
2017
Cash and cash equivalents
Gross revenues - VIP a
Total current assets excluding cash and cash equivalents
Gross revenues - domestic a
Total non current assets
Segment revenue (refer to note A2)
Total current liabilities
Total non current liabilities - financial liabilities
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Net assets
Depreciation and amortisation (refer to note A4)
Capital expenditure
Reconciliation to investment carrying amount:
Carrying amount at the beginning of the year
Share of profit for the period
a
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
Gold Coast
$m
66.3
331.3
397.6
94.4
36.3
209.1
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
30.5
419.6
Carrying amount at the end of the year
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
Income statement
significant items
Revenue
Depreciation and amortisation
Interest expense
Significant items (refer to note A7)
Other expenses
Unallocated items:
Profit before tax
- net finance costs (refer to note A5)
Income tax expense
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit for the year (continuing operations)
Profit before income tax (PBT)
Total comprehensive income for the year (continuing operations)
Group's share of profit for the year
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
39.5
2018
$m
Brisbane
$m
2.7
25.4
0.1
323.4
48.3
348.8
(0.6)
(22.5)
104.2
28.0
28.0
13.5
0.3
2018
13.8
$m
484.4
3.4
(187.2)
(0.7)
(52.4)
(1.3)
1.4
(34.3)
(0.4)
(0.1)
1.0
210.4
1.0
0.3
490.0
2017
$m
Total
$m
1.7
639.6
0.1
1,792.6
48.3
2,432.2
(0.6)
(22.5)
599.7
27.0
164.5
13.1
0.4
2017
13.5
$m
599.7
3.1
(164.5)
(0.7)
(12.8)
(1.4)
1.0
(41.7)
(0.3)
(0.7)
0.7
380.0
0.7
0.4
41
62
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
111
A Key income statement disclosures
A1 Segment information
(iii) Destination Gold Coast Investments Pty Ltd
The Group's operating segments have been determined based on the internal management reporting structure and the
On 20 October 2016, a 50% interest was acquired in Destination Gold Coast Investments Pty Ltd (DGCI). DGCI is a
nature of products and services provided by the Group. They reflect the business level at which financial information is
joint venture with CTF and FEC involved in the operation of the Sheraton Grand Mirage Resort, Gold Coast. The
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Group's interest is accounted for using the equity method.
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The Securityholdersʼ Deed for Destination Gold Coast Investments Pty Ltd requires unanimous consent for each Board
The Group has three reportable segments:
resolution. Due to the unanimous requirement for decisions, each party has joint control of the entity. The entity is
designed to exist on its own and the Deed does not grant the rights to assets and liabilities directly to the Group. The
Sydney
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
investment has therefore been classified as a joint venture.
and bars.
Commitments and contingent liabilities
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
The joint venture had capital commitments of $0.3 million (2017: $0.2 million) as at 30 June 2018. There were no other
contingent liabilities.
Brisbane
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Summarised financial information
Total
The financial statements of the joint venture are prepared for the same reporting period as the Group and follow the
2018
$m
same accounting policies of the Group.
Gross revenues - VIP a
Gross revenues - domestic a
Gold Coast
$m
Brisbane
$m
571.4
1,165.3
132.8
376.9
Sydney
$m
7.3
2018
325.8
$m
before
earnings
Balance sheet
Segment revenue (refer to note A2)
Cash and cash equivalents
tax,
Segment
Total current assets excluding cash and cash equivalents
depreciation, amortisation and significant items
Total non current assets
Depreciation and amortisation (refer to note A4)
Total current liabilities
Capital expenditure
Total non current liabilities - financial liabilities
Other non current liabilities
interest,
Net assets
2017
Gross revenues - VIP a
Reconciliation to investment carrying amount:
Gross revenues - domestic a
Carrying amount at the beginning of the year
Segment revenue (refer to note A2)
Share of profit for the period
Share of equity contributions for the Group
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Carrying amount at the end of the year
Depreciation and amortisation (refer to note A4)
1,736.7
285.8
114.2
192.0
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
509.7
116.9
42.3
258.5
Gold Coast
$m
66.3
331.3
397.6
94.4
36.3
209.1
333.1
11.1
4.4
81.7
173.6
30.7
(12.4)
39.5
(72.2)
(15.1)
Brisbane
89.4
$m
25.4
323.4
46.3
348.8
2.4
(4.1)
104.2
44.6
28.0
30.5
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Capital expenditure
Income statement
Revenue
Interest expense
Depreciation expense
a
Operating expenses
Reconciliation of reportable segment profit to profit before income tax
Profit before tax
Segment earnings before interest, tax, depreciation, amortisation and
Income tax expense
significant items
Depreciation and amortisation
Profit for the year (continuing operations)
Significant items (refer to note A7)
Total comprehensive income for the year (continuing operations)
Unallocated items:
Group's share of profit for the year
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
47.0
(1.8)
(3.1)
2018
(36.4)
$m
5.7
(0.9)
484.4
(187.2)
4.8
(52.4)
4.8
2.4
(34.3)
(0.1)
210.4
711.5
2017
1,868.0
$m
2,579.5
6.7
0.9
484.4
167.1
187.2
(11.9)
490.0
(72.2)
(14.3)
Total
76.3
$m
639.6
1,792.6
-
2,432.2
-
46.3
599.7
46.3
164.5
419.6
16.2
(0.9)
(1.2)
2017
(13.9)
$m
0.3
(0.3)
599.7
(164.5)
-
(12.8)
-
-
(41.7)
(0.7)
380.0
41
63
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 112
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
(iv) Destination Gold Coast Consortium Pty Ltd
The Group's operating segments have been determined based on the internal management reporting structure and the
On 22 November 2016, a 33.3% interest was acquired in Destination Gold Coast Consortium Pty Ltd (DGCC). DGCC
nature of products and services provided by the Group. They reflect the business level at which financial information is
is a joint venture with CTF and FEC for the purpose of constructing a new residential and hotel tower in the Gold
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Coast. The Group's interest is accounted for using the equity method.
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The Group has three reportable segments:
Commitments and contingent liabilities
The joint venture had no capital commitments as at 30 June 2018. On 16 August 2018, DGCC entered in to an
Sydney
agreement to commence construction in relation to the first residential, hotel and retail tower in the Gold Coast.
DGCC's total commitments for the development of the tower is $370.0 million, 8% lower than initial expectations.
Gold Coast
Summarised financial information
The financial statements of the joint venture are prepared for the same reporting period as the Group and follow the
Brisbane
same accounting polices of the Group.
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
2018
Gross revenues - VIP a
Balance sheet
Gross revenues - domestic a
Cash and cash equivalents
Total current assets excluding cash and cash equivalents
Segment revenue (refer to note A2)
Total non current assets
tax,
earnings
Segment
Total current liabilities
depreciation, amortisation and significant items
Total non current liabilities
Depreciation and amortisation (refer to note A4)
Net assets
Capital expenditure
interest,
before
Reconciliation to investment carrying amounts:
2017
Share of loss for the period
Gross revenues - VIP a
Share of equity contributions for the Group
Gross revenues - domestic a
Carrying amount at the end of the year
Segment revenue (refer to note A2)
Segment earnings before interest, tax, depreciation,
Income statement
amortisation and significant items
Loss before tax
Depreciation and amortisation (refer to note A4)
Income tax benefit
Capital expenditure
Loss for the year (continuing operations)
Sydney
$m
571.4
1,165.3
1,736.7
285.8
114.2
192.0
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
Gold Coast
$m
2018
Brisbane
$m
$m
132.8
376.9
509.7
116.9
42.3
258.5
Gold Coast
$m
66.3
331.3
397.6
94.4
36.3
209.1
7.3
325.8
4.5
0.6
333.1
22.7
81.7
(7.3)
-
30.7
20.5
39.5
Brisbane
$m
(1.7)
8.5
25.4
323.4
6.8
348.8
104.2
(5.1)
28.0
-
30.5
(5.1)
Total comprehensive loss for the year (continuing operations)
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
a
(5.1)
Group's share of loss for the year
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
2017
Total
$m
$m
711.5
1,868.0
-
-
2,579.5
-
484.4
-
-
187.2
-
490.0
Total
$m
-
-
639.6
1,792.6
-
2,432.2
599.7
-
164.5
-
419.6
-
-
-
2017
$m
599.7
(164.5)
(12.8)
(1.7)
2018
$m
484.4
(187.2)
(52.4)
(34.3)
(41.7)
(0.1)
210.4
(0.7)
380.0
41
64
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
113
A Key income statement disclosures
A1 Segment information
E Risk Management
E1 Financial risk management objectives and policies
The Group's operating segments have been determined based on the internal management reporting structure and the
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
The Group's principal financial instruments, other than derivatives, comprise cash, short term deposits, bank bills,
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Australian denominated bank loans, and foreign currency denominated notes.
The Group has three reportable segments:
The main purpose of these financial instruments is to raise debt capital for the Group's operations. The Group has
various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its
Sydney
operations. Derivative transactions are also entered into by the Group, being interest rate swaps, cross currency
swaps and forward currency contracts, the purpose being to manage interest rate and currency risks arising from the
Gold Coast
Group's operations and sources of finance.
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
$m
285.8
509.7
333.1
before
1,736.7
Sydney
interest,
earnings
132.8
376.9
7.3
325.8
571.4
1,165.3
711.5
1,868.0
Brisbane
$m
Gold Coast
$m
Comprises Treasury's casino operations, including hotel, restaurants and bars.
The Group's risk management policy is carried out by the Corporate Treasury function under the Group Treasury
Brisbane
Policy approved by the Board. Corporate Treasury reports regularly to the Board on the Group's risk management
Total
activities and policies. It is, and has been throughout the period under review, the Group's policy that no trading in
financial instruments shall be undertaken.
2018
$m
Gross revenues - VIP a
The main risks arising from the Group's financial instruments are interest rate risk, foreign currency risk, credit risk and
liquidity risk.
Gross revenues - domestic a
Details of significant accounting policies and methods adopted, including criteria for recognition, the basis of
Segment revenue (refer to note A2)
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
tax,
Segment
financial liability and equity instrument, are disclosed in note G.
depreciation, amortisation and significant items
Interest rate risk
Depreciation and amortisation (refer to note A4)
The Group has a policy of controlling exposure to interest rate fluctuations by the use of fixed and variable rate debt
and by the use of interest rate swaps or caps. The Group has entered into interest rate swap agreements to hedge
Capital expenditure
underlying debt obligations and allow floating rate borrowings to be swapped to fixed rate borrowings. Under these
arrangements, the Group will pay fixed interest rates and receive the bank bill swap rate calculated on the notional
principal amount of the contracts.
Total
2017
$m
At 30 June 2018 after taking into account the effect of interest rate swaps, approximately 56.2% (2017: 60.3%) of the
Group's borrowings are at a fixed rate of interest.
Gross revenues - VIP a
Gross revenues - domestic a
Foreign currency risk
As a result of issuing private notes denominated in US Dollars (USD), the Group's balance sheet can be affected by
Segment revenue (refer to note A2)
movements in the USD/AUD exchange rate. In order to manage this exposure, the Group has entered into cross
currency swaps to fix the exchange rate on the notes until maturity. The Group agrees to exchange a fixed USD
Segment earnings before interest, tax, depreciation,
amount for an agreed Australian Dollar (AUD) amount with swap counterparties, and re-exchange this again at
amortisation and significant items
maturity. These swaps are designated to hedge the principal and interest obligations under the private notes.
Depreciation and amortisation (refer to note A4)
The Group has operating leases for two aircrafts invoiced in USD. The Group has entered into foreign exchange
forward contracts to hedge against the USD currency risk, by exchanging the future USD lease payments to AUD
Capital expenditure
amounts.
Gold Coast
$m
Brisbane
$m
Sydney
$m
547.9
1,137.9
639.6
1,792.6
66.3
331.3
25.4
323.4
2,579.5
1,685.8
2,432.2
116.9
484.4
258.5
114.2
187.2
192.0
490.0
401.1
397.6
348.8
104.2
599.7
209.1
100.2
164.5
180.0
419.6
42.3
81.7
30.7
39.5
94.4
36.3
28.0
30.5
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Credit risk
Credit risk on financial assets which have been recognised on the balance sheet, is the carrying amount less any
2017
allowance for non recovery. The Group minimises credit risk via adherence to a strict credit risk management policy.
$m
Collateral is not held as security.
Reconciliation of reportable segment profit to profit before income tax
Credit risk in trade receivables is managed in the following ways:
Segment earnings before interest, tax, depreciation, amortisation and
− The provision of cheque cashing facilities for casino gaming patrons is subject to detailed policies and procedures
599.7
significant items
designed to minimise any potential loss, including the use of a central credit agency which collates information from
(164.5)
Depreciation and amortisation
the major casinos around the world; and
(12.8)
Significant items (refer to note A7)
− The provision of non gaming credit is covered by a risk assessment process for customers using the Credit
Unallocated items:
(41.7)
- net finance costs (refer to note A5)
Receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is
- share of net profit/(loss) of associate and joint venture entities accounted
carefully managed and controlled.
(0.7)
for using the equity method (refer to note D5)
With respect to credit risk arising from other financial assets of the Group, which comprise cash and cash equivalents
Profit before income tax (PBT)
(including short term deposits and bank bills), the maximum exposure of the Group to credit risk from default of a
counterparty is equal to the carrying amount of these instruments.
Reference Association of Australia, bank opinions and trade references.
484.4
(187.2)
(52.4)
2018
$m
(34.3)
380.0
210.4
(0.1)
In relation to financial liabilities, credit risk arises from the potential failure of counterparties to meet their obligations
under the contract or arrangement. The Group's maximum credit risk exposure in respect of interest rate swap
41
contracts, cross currency swap contracts and forward currency contracts is detailed in note E2.
The Star Entertainment Group Limited and its controlled entities
65
The Star Entertainment Group Limited and its controlled entities
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 114
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Credit risk includes liabilities under financial guarantees. For financial guarantee contract liabilities, the fair value at
The Group's operating segments have been determined based on the internal management reporting structure and the
initial recognition is determined using a probability weighted discounted cash flow approach. The fair value of financial
nature of products and services provided by the Group. They reflect the business level at which financial information is
guarantee contract liabilities has been assessed as nil (2017: nil), as the possibility of an outflow occurring is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
considered remote. Details of the financial guarantee contracts in the balance sheet are outlined below.
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Fixed and floating charges
The Group has three reportable segments:
The controlled entities denoted (b) in note D1 have provided Liquor and Gaming NSW with a fixed and floating charge
over all of the assets and undertakings of each company to secure payment of all monies and the performance of all
Sydney
obligations which they have to Liquor and Gaming NSW.
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
Guarantees and indemnities
The controlled entities denoted (b) in note D1 have entered into a guarantee and indemnity agreement in favour of
Brisbane
Liquor and Gaming NSW whereby all parties to the agreement are jointly and severally liable for the performance of
the obligations and liabilities of each company participating in the agreement with respect to agreements entered into
Total
and guarantees given.
2018
$m
The Star Entertainment Finance Limited and The Star Entertainment International No. 3 Pty Ltd are called upon to give
Gross revenues - VIP a
in the ordinary course of business, guarantees and indemnities in respect of the performance of their contractual and
Gross revenues - domestic a
financial obligations. The maximum amount of these guarantees and indemnities is $218.3 million (2017: $117.7
million).
Segment revenue (refer to note A2)
Liquidity risk
tax,
Segment
Liquidity risk arises from the financial liabilities of the Group and the Group's subsequent ability to meet its obligations
depreciation, amortisation and significant items
to repay its financial liabilities as and when they fall due.
Depreciation and amortisation (refer to note A4)
The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank
loans and notes.
Capital expenditure
Gold Coast
$m
Brisbane
$m
711.5
1,868.0
571.4
1,165.3
7.3
325.8
132.8
376.9
earnings
interest,
Sydney
1,736.7
2,579.5
before
490.0
484.4
187.2
192.0
258.5
333.1
114.2
116.9
285.8
509.7
39.5
42.3
30.7
81.7
$m
The Group manages liquidity risk by maintaining a forecast of expected cash flow which is monitored and reviewed on
a regular basis. To help reduce liquidity risk, the Group targets a minimum level of cash and cash equivalents to be
Total
maintained, and has revolving facilities in place with sufficient undrawn funds available.
2017
$m
The Group's policy is that not more than 33% of debt facilities should mature in any financial year within the next four
Gross revenues - VIP a
years. At 30 June 2018, the Group's debt facilities that will mature in less than one year is $150.0 million (2017: $130.0
Gross revenues - domestic a
million), representing 11.3% of total debt facilities. The next debt maturity is the Syndicated Facility (tranche B)
Agreement facility of $250.0 million maturing in July 2019. This represents 18.8% of total debt facilities and is within
Segment revenue (refer to note A2)
the Group's policy.
Segment earnings before interest, tax, depreciation,
Refer to notes B7 and E2 for maturity of financial liabilities.
amortisation and significant items
Gold Coast
$m
Brisbane
$m
Sydney
$m
639.6
1,792.6
547.9
1,137.9
66.3
331.3
25.4
323.4
1,685.8
2,432.2
599.7
397.6
401.1
348.8
104.2
94.4
The contractual cash flows including principal and estimated interest receipts or payments of financial assets or
Depreciation and amortisation (refer to note A4)
liabilities are as follows:
Capital expenditure
419.6
164.5
100.2
180.0
209.1
30.5
28.0
36.3
(i) Non-derivative financial instruments
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
< 1 year
$m
1 - 5 years
$m
> 5 years
$m
< 1 year
$m
2018
2017
1 - 5 years
2018
$m
$m
Financial assets
Reconciliation of reportable segment profit to profit before income tax
Cash assets
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Short term deposits
Depreciation and amortisation
Net trade and other receivables
Significant items (refer to note A7)
Unallocated items:
Financial liabilities
- net finance costs (refer to note A5)
Trade creditors and accrued expenses
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Bank loans - unsecured
Profit before income tax (PBT)
Private placement - US dollar
-
99.8
246.4
95.4
14.9
221.5
363.3
132.3
32.9
331.8
-
-
-
-
-
-
531.5
-
-
-
-
107.7
6.0
192.7
306.4
322.4
12.9
163.0
-
-
-
-
484.4
(187.2)
(52.4)
(34.3)
(0.1)
-
453.8
546.9
210.4
Net outflow
(196.7)
(346.2)
(531.5)
(191.9)
(1,000.7)
528.5
346.2
531.5
498.3
1,000.7
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
> 5 years
2017
$m
$m
-
599.7
-
(164.5)
-
(12.8)
-
(41.7)
-
(0.7)
-
-
380.0
-
-
41
66
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
115
(ii) Derivative financial instruments
The Group's operating segments have been determined based on the internal management reporting structure and the
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
< 1 year
The Group has three reportable segments:
$m
1 - 5 years
$m
1 - 5 years
$m
> 5 years
$m
> 5 years
$m
< 1 year
$m
2017
2018
Sydney
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
Financial assets
and bars.
12.5
Interest rate swaps - receive AUD floating
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
246.4
Cross currency swaps - receive USD fixed
Brisbane
Forward currency contract - receive USD
fixed
Comprises Treasury's casino operations, including hotel, restaurants and bars.
9.0
163.0
1.9
531.5
24.0
546.9
4.2
32.9
1.2
9.2
1.2
-
3.2
-
2018
Gross revenues - VIP a
Financial liabilities
Gross revenues - domestic a
Interest rate swaps - pay AUD fixed
Cross currency swaps - pay AUD floating
Segment revenue (refer to note A2)
Cross currency swaps - pay AUD fixed
tax,
Segment
Forward currency contract - pay AUD
depreciation, amortisation and significant items
fixed
Depreciation and amortisation (refer to note A4)
earnings
interest,
before
Capital expenditure
Net (outflow)/inflow
Sydney
258.9
$m
-
Gold Coast
533.4
$m
Brisbane
572.1
$m
181.2
-
Total
3.2
$m
571.4
1,165.3
21.3
144.9
1,736.7
54.2
285.8
-
114.2
220.4
192.0
38.5
132.8
376.9
509.7
2.4
235.0
280.3
116.9
-
42.3
29.1
163.0
-
7.8
517.7
258.5
199.9
15.7
(18.7)
7.3
325.8
333.1
72.3
546.9
-
81.7
30.7
0.9
620.1
39.5
(48.0)
711.5
1,868.0
4.7
-
2,579.5
-
484.4
-
187.2
4.7
490.0
(1.5)
38.3
8.4
15.7
13.5
0.9
38.5
(0.2)
For floating rate instruments, the amount disclosed is determined by reference to the interest rate at the last repricing
Total
date. For foreign currency receipts and payments, the amount disclosed is determined by reference to the AUD/USD
2017
$m
rate at balance sheet date.
Gross revenues - VIP a
Gross revenues - domestic a
Interest rates - AUD and USD
The following sensitivity analysis is based on interest rate risk exposures in existence at year end.
Segment revenue (refer to note A2)
Gold Coast
$m
Brisbane
$m
Sydney
$m
547.9
1,137.9
639.6
1,792.6
25.4
323.4
66.3
331.3
(iii) Financial instruments - sensitivity analysis
2,432.2
1,685.8
348.8
397.6
Segment earnings before interest, tax, depreciation,
At 30 June, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post tax
amortisation and significant items
profit and other comprehensive income would have been affected as follows:
599.7
104.2
401.1
94.4
Depreciation and amortisation (refer to note A4)
100.2
36.3
28.0
Capital expenditure
Net profit after tax
higher/(lower)
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
$m
209.1
180.0
a
2018
30.5
Other
164.5
comprehensive
income
419.6
higher/(lower)
$m
AUD
+ 0.5% (50 basis points)
Reconciliation of reportable segment profit to profit before income tax
- 0.5% (50 basis points)
Segment earnings before interest, tax, depreciation, amortisation and
significant items
USD
+ 0.5% (50 basis points)
Depreciation and amortisation
- 0.5% (50 basis points)
Significant items (refer to note A7)
Unallocated items:
2017
- net finance costs (refer to note A5)
AUD
- share of net profit/(loss) of associate and joint venture entities accounted
+ 0.5% (50 basis points)
for using the equity method (refer to note D5)
- 0.5% (50 basis points)
Profit before income tax (PBT)
USD
+ 0.5% (50 basis points)
- 0.25% (25 basis points)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
2018
$m
(1.0)
1.0
484.4
-
(187.2)
-
(52.4)
(34.3)
(0.1)
(1.6)
1.6
210.4
-
-
2017
$m
12.8
(13.3)
599.7
(20.7)
(164.5)
21.6
(12.8)
(41.7)
7.3
(0.7)
(7.5)
380.0
(7.0)
(3.5)
41
67
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 116
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
The movements in profit are due to higher/lower interest costs from variable rate debt and investments. The movement
The Group's operating segments have been determined based on the internal management reporting structure and the
in other comprehensive income is due to an increase/decrease in the fair value of financial instruments designated as
nature of products and services provided by the Group. They reflect the business level at which financial information is
cash flow hedges.
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The numbers derived in the sensitivity analysis are indicative only.
The Group has three reportable segments:
Significant assumptions used in the interest rate sensitivity analysis include:
− reasonably possible movements in interest rates were determined based on the Group's current credit rating and
Sydney
mix of debt, relationships with financial institutions and the level of debt that is expected to be renewed, as well as
a review of the last two years' historical movements and economic forecaster's expectations;
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
− price sensitivity of derivatives is based on a reasonably possible movement of spot rates at the balance sheet
Brisbane
− the net exposure at the balance sheet date is representative of what the Group was, and is expecting to be,
Total
$m
2018
Foreign Exchange
Gross revenues - VIP a
The following sensitivity analysis is based on foreign currency risk exposures in existence at the balance sheet date. At
Gross revenues - domestic a
30 June, had the AUD moved, as illustrated in the table below, with all other variables held constant, post tax profit and
other comprehensive income would have been affected as follows:
Segment revenue (refer to note A2)
Judgements of reasonably possible movements:
Segment
tax,
depreciation, amortisation and significant items
Comprises Treasury's casino operations, including hotel, restaurants and bars.
exposed to in the next twelve months.
Gold Coast
$m
Brisbane
$m
711.5
1,868.0
571.4
1,165.3
7.3
325.8
132.8
376.9
dates; and
earnings
interest,
Sydney
1,736.7
2,579.5
before
484.4
333.1
509.7
116.9
81.7
$m
285.8
Other
comprehensive
income
higher/(lower)
114.2
192.0
42.3
Net profit after tax
higher/(lower)
30.7
258.5
39.5
Other
comprehensive
income
187.2
higher/(lower)
490.0
Depreciation and amortisation (refer to note A4)
Net profit after tax
higher/(lower)
Capital expenditure
2018
$m
2017
$m
Total
(53.8)
AUD/USD + 10 cents
2017
$m
69.8
AUD/USD - 10 cents
Gross revenues - VIP a
639.6
Gross revenues - domestic a
1,792.6
There is no movement in net profit after tax as the Group has fully hedged its foreign currency exposure to the USPP.
The movement in other comprehensive income is due to an increase/decrease in the fair value of financial instruments
Segment revenue (refer to note A2)
designated as cash flow hedges. Management believes the balance sheet date risk exposures are representative of
Segment earnings before interest, tax, depreciation,
the risk exposure inherent in the financial instruments. The numbers derived in the sensitivity analysis are indicative
amortisation and significant items
only.
2017
$m
Brisbane
-
$m
-
25.4
323.4
2018
$m
Gold Coast
$m
Sydney
$m
547.9
1,137.9
(11.1)
14.6
66.3
331.3
1,685.8
2,432.2
599.7
104.2
401.1
397.6
348.8
94.4
-
-
Depreciation and amortisation (refer to note A4)
Significant assumptions used in the foreign currency exposure sensitivity analysis include:
− reasonably possible movements in foreign exchange rates were determined based on a review of the last two
Capital expenditure
419.6
180.0
209.1
30.5
28.0
164.5
100.2
36.3
years' historical movements and economic forecaster's expectations;
dates; and
exposed to in the next twelve months.
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
− the reasonably possible movement of 10 cents was calculated by taking the USD spot rate as at balance sheet
a
date, moving this spot rate by 10 cents and then re-converting the USD into AUD with the 'new spot-rate'. This
methodology reflects the translation methodology undertaken by the Group;
2017
− price sensitivity of derivatives is based on a reasonably possible movement of spot rates at the balance sheet
$m
Reconciliation of reportable segment profit to profit before income tax
− the net exposure at the balance sheet date is representative of what the Group was, and is expecting to be,
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
484.4
(187.2)
(52.4)
599.7
(164.5)
(12.8)
2018
$m
(41.7)
(34.3)
(0.1)
(0.7)
Profit before income tax (PBT)
210.4
380.0
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
68
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
117
A Key income statement disclosures
A1 Segment information
E2 Additional financial instruments disclosures
(i)
The Group's operating segments have been determined based on the internal management reporting structure and the
Fair values
nature of products and services provided by the Group. They reflect the business level at which financial information is
The fair value of the Group's financial assets and financial liabilities approximates their carrying value as at the
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
balance sheet date.
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The Group has three reportable segments:
Swaps
Fair value is calculated using discounted future cash flow techniques, where estimated cash flows and estimated
Sydney
discount rates are based on market data at the balance sheet date.
Forward currency contracts
Gold Coast
Fair value is calculated using forward exchange market rates at the balance sheet date.
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Brisbane
USPP
Fair value is calculated using discounted future cash flow techniques, where estimated cash flows and estimated
Total
discount rates are based on market data at the balance sheet date, in combination with restatement to current foreign
2018
$m
exchange rates.
Gross revenues - VIP a
Interest rate risk
Gross revenues - domestic a
The Group had the following classes of financial assets and financial liabilities exposed to floating interest rate risk:
Gold Coast
$m
Brisbane
$m
571.4
1,165.3
132.8
376.9
Sydney
$m
(ii)
Segment revenue (refer to note A2)
before
interest,
earnings
tax,
Segment
depreciation, amortisation and significant items
Financial assets
Cash assets
Depreciation and amortisation (refer to note A4)
Short term deposits
Capital expenditure
Total financial assets
Financial liabilities
Bank loans - unsecured a
2017
USPP cross currency swaps
Gross revenues - VIP a
Derivatives b
Gross revenues - domestic a
Total financial liabilities
Segment revenue (refer to note A2)
1,736.7
285.8
114.2
192.0
Sydney
$m
547.9
1,137.9
1,685.8
509.7
116.9
42.3
258.5
Gold Coast
$m
66.3
331.3
397.6
7.3
325.8
2018
333.1
$m
711.5
1,868.0
2017
2,579.5
$m
81.7
95.4
30.7
14.9
39.5
110.3
Brisbane
220.0
$m
311.5
25.4
(198.0)
323.4
333.5
348.8
484.4
29.8
187.2
6.0
490.0
35.8
Total
449.5
$m
430.0
639.6
(430.0)
1,792.6
449.5
2,432.2
Segment earnings before interest, tax, depreciation,
a
amortisation and significant items
Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. The floating rates
599.7
represent the most recently determined rate applicable to the instrument at the balance sheet date.
104.2
401.1
94.4
Depreciation and amortisation (refer to note A4)
b Notional principal amounts.
100.2
36.3
28.0
(iii) Financial instruments - interest rate swaps
Capital expenditure
Interest rate swaps meet the requirements to qualify for cash flow hedge accounting and are stated at fair value.
180.0
209.1
30.5
164.5
419.6
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
These swaps are being used to hedge the exposure to variability in cash flows attributable to movements in the
reference interest rate of the designated debt or instrument and are assessed as highly effective in offsetting changes
2017
in the cash flows attributable to such movements. Hedge effectiveness is measured by comparing the change in the
$m
fair value of the hedged item and the hedging instrument respectively each quarter. Any difference represents
Reconciliation of reportable segment profit to profit before income tax
ineffectiveness and is recorded in the income statement.
Segment earnings before interest, tax, depreciation, amortisation and
484.4
The notional principal amounts and periods of expiry of the interest rate swap contracts are as follows:
significant items
-
Less than one year
(187.2)
Depreciation and amortisation
148.0
One to five years
(52.4)
Significant items (refer to note A7)
50.0
More than five years
Unallocated items:
- net finance costs (refer to note A5)
Notional Principal
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Fixed interest rate range p.a.
Profit before income tax (PBT)
Variable interest rate range p.a.
(0.7)
2.4% - 6.0% 2.4% - 7.3%
380.0
1.7%
599.7
94.0
(164.5)
336.0
(12.8)
100.0
2018
$m
210.4
2.1%
(41.7)
530.0
(34.3)
198.0
(0.1)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
69
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 118
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
Net settlement receipts and payments are recognised as an adjustment to interest expense on an accruals basis over
The Group's operating segments have been determined based on the internal management reporting structure and the
the term of the swaps, such that the overall interest expense on borrowings reflects the average cost of funds achieved
nature of products and services provided by the Group. They reflect the business level at which financial information is
by entering into the swap agreements.
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Cross currency swap contracts are classified as cash flow hedges and are stated at fair value.
The Group has three reportable segments:
(iv) Financial instruments - cross currency swaps (cash flow hedges)
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
These cross currency swaps, in conjunction with interest rate swaps are being used to hedge the exposure to the cash
Sydney
flow variability in the value of the USD debt under the USPP and are assessed as highly effective in offsetting changes
in movements in the forward USD exchange rate. Hedge effectiveness is measured by comparing the change in the
Gold Coast
fair value of the hedged item and the hedging instrument respectively each quarter. Any difference represents
ineffectiveness and is recorded in the income statement.
Brisbane
Financial instruments - cross currency swaps (fair value hedges)
Sydney
Total
These cross currency swaps are being used to hedge the exposure to fair value changes of the USD debt under the
USPP as a result of fluctuations in the underlying USD to AUD exchange rate and US interest benchmark and are
2018
$m
assessed as highly effective. The decrease in fair value of the cross currency swaps at fair value of $12.1 million
Gross revenues - VIP a
(2017: nil) has been recognised in finance costs and offsetting gain on the USPP borrowings. The ineffectiveness
Gross revenues - domestic a
recognised in FY18 was immaterial.
The principal amounts and periods of expiry of the cross currency swap contracts are as follows:
Segment revenue (refer to note A2)
Gold Coast
$m
Brisbane
$m
711.5
1,868.0
571.4
1,165.3
7.3
325.8
132.8
376.9
1,736.7
2,579.5
509.7
333.1
$m
Segment
tax,
depreciation, amortisation and significant items
earnings
interest,
before
Depreciation and amortisation (refer to note A4)
Less than one year
Capital expenditure
One to five years
More than five years
285.8
2018
116.9
81.7
2017
484.4
AUD $m
114.2
-
192.0
98.1
433.4
Sydney
531.5
$m
USD $m
42.3
-
258.5
105.0
338.4
Gold Coast
443.4
$m
AUD $m
30.7
94.0
39.5
336.0
-
Brisbane
430.0
$m
USD $m
187.2
100.0
490.0
360.0
-
Total
460.0
$m
Notional principal
2017
Gross revenues - VIP a
Gross revenues - domestic a
Fixed interest rate range p.a.
Variable interest rate range p.a.
Segment revenue (refer to note A2)
The terms and conditions in relation to interest rate and maturity of the cross currency swaps are similar to the terms
Segment earnings before interest, tax, depreciation,
and conditions of the underlying hedged USPP borrowings as set out in note B7.
amortisation and significant items
25.4
323.4
4.6% - 4.9%
348.8
547.9
1,137.9
4.7% - 5.5%
1,685.8
639.6
5.1% - 5.7%
1,792.6
66.3
4.3% - 5.9%
331.3
2,432.2
599.7
397.6
401.1
104.2
94.4
(v) Financial instruments - forward currency contracts
Depreciation and amortisation (refer to note A4)
Forward currency contracts meet the requirements to qualify for cash flow hedge accounting and are stated at fair
Capital expenditure
value.
419.6
164.5
100.2
209.1
180.0
36.3
30.5
28.0
These contracts are being used to hedge the exposure to variability in the movement USD exchange rate arising from
a
the Group's operations and are assessed as highly effective hedges as they are matched against known and
committed payments. Any gain or loss on the hedged risk is taken directly to equity.
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
The notional amounts and periods of expiry of the foreign currency contracts are as follows:
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Buy USD / sell AUD
Depreciation and amortisation
Less than one year
Significant items (refer to note A7)
One to five years
Unallocated items:
More than five years
- net finance costs (refer to note A5)
Notional principal
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
Average exchange rate (AUD/USD)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
2018
$m
2018
$m
484.4
(187.2)
0.9
(52.4)
-
-
(34.3)
2017
$m
2017
$m
599.7
(164.5)
7.8
(12.8)
0.9
-
(41.7)
0.9
(0.1)
210.4
0.97
8.7
(0.7)
380.0
0.92
41
70
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
119
A Key income statement disclosures
A1 Segment information
(vi) Financial instruments - fair value hierarchy
The Group's operating segments have been determined based on the internal management reporting structure and the
There are various methods available in estimating the fair value of a financial instrument.
nature of products and services provided by the Group. They reflect the business level at which financial information is
The methods comprise:
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Level 1
The Group has three reportable segments:
Level 2
the fair value is calculated using quoted prices in active markets.
the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for
the asset or liability, either directly (as prices) or indirectly (derived from prices).
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
the fair value is estimated using inputs for the asset or liability that are not based on observable market
and bars.
data.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
All of the Group's derivative financial instruments are valued using the Level 2 valuation techniques, being observable
Brisbane
inputs. There have been no transfers between levels during the year.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Sydney
Level 3
(vii) Reconciliation of movement in financing activities
2018
Gross revenues - VIP a
Gross revenues - domestic a
2017
$m
interest,
Cash
flows
$m
Segment revenue (refer to note A2)
before
earnings
tax,
Segment
depreciation, amortisation and significant items
Interest bearing
(refer to note B7)
Depreciation and amortisation (refer to note A4)
Net derivative assets (refer
Capital expenditure
to note B3)
(1,045.0)
liabilities
143.8
248.7
(102.5)
Sydney
$m
Gold Coast
$m
Brisbane
$m
571.4
Changes
1,165.3
in fair
values
1,736.7
$m
285.8
12.1
114.2
132.8
376.9
Foreign
exchange
movement
509.7
$m
116.9
Option
premium
$m
(19.9)
42.3
(16.4)
192.0
(9.6)
258.5
-
-
7.3
325.8
Borrowing
costs
333.1
$m
81.7
30.7
39.5
0.5
-
2017
Gross revenues - VIP a
Gross revenues - domestic a
Segment revenue (refer to note A2)
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Depreciation and amortisation (refer to note A4)
Capital expenditure
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
Gold Coast
$m
Brisbane
$m
66.3
331.3
397.6
94.4
36.3
209.1
25.4
323.4
348.8
104.2
28.0
30.5
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
Total
$m
711.5
1,868.0
2018
2,579.5
$m
484.4
820.0
187.2
490.0
31.7
Total
$m
639.6
1,792.6
2,432.2
599.7
164.5
419.6
2017
$m
599.7
(164.5)
(12.8)
2018
$m
484.4
(187.2)
(52.4)
(34.3)
(41.7)
(0.1)
210.4
(0.7)
380.0
41
71
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 120
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
F Other disclosures
F1 Other comprehensive income
The Group's operating segments have been determined based on the internal management reporting structure and the
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
2017
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
$m
The Group has three reportable segments:
Net loss on derivatives
Transfer of hedging reserve to the income statement a
Sydney
Tax on above items recognised in other comprehensive income
Gold Coast
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
(38.3)
19.2
5.7
(18.9)
14.1
1.4
2018
$m
(3.4)
(13.4)
Brisbane
Comprises Treasury's casino operations, including hotel, restaurants and bars.
a The transfer related to the foreign exchange spot retranslation of the foreign debt is offset by the retranslation on the cross
Total
$m
currency swaps in the net foreign exchange gain line in the income statement.
Gold Coast
$m
Brisbane
$m
Sydney
$m
2018
Gross revenues - VIP a
Income tax expense
Gross revenues - domestic a
F2 Income tax
(i)
571.4
1,165.3
1,736.7
Segment revenue (refer to note A2)
tax,
Segment
The major components of income tax expenses are:
depreciation, amortisation and significant items
earnings
interest,
before
Current tax expense
Depreciation and amortisation (refer to note A4)
Adjustments in respect of current income tax of previous years
Capital expenditure
Deferred income tax benefit/(expense)
285.8
114.2
192.0
Income tax expense reported in the income statement
2017
Gross revenues - VIP a
Aggregate of current and deferred tax relating to items charged
Gross revenues - domestic a
or credited to equity:
Current tax benefit reported in equity
Segment revenue (refer to note A2)
Deferred tax benefit reported in equity
Segment earnings before interest, tax, depreciation,
Income tax benefit reported in equity
amortisation and significant items
547.9
1,137.9
1,685.8
401.1
Depreciation and amortisation (refer to note A4)
100.2
Sydney
$m
132.8
376.9
509.7
116.9
42.3
258.5
7.3
325.8
2018
333.1
$m
81.7
(77.2)
30.7
4.3
39.5
10.6
Gold Coast
$m
(62.3)
Brisbane
$m
66.3
331.3
397.6
94.4
36.3
209.1
25.4
323.4
0.5
348.8
1.7
104.2
2.2
28.0
30.5
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
180.0
Income tax expense
Capital expenditure
A reconciliation between income tax expense and the product of
accounting profit before income tax multiplied by the income tax rate
a
is as follows:
Accounting profit before income tax expense
At the Group's statutory income tax rate of 30%
Reconciliation of reportable segment profit to profit before income tax
- Recognition of temporary differences
Segment earnings before interest, tax, depreciation, amortisation and
- Research & Development tax offset
significant items
- Tax consolidation reset
Depreciation and amortisation
- Other items
Significant items (refer to note A7)
Unallocated items:
Aggregate income tax expense
- net finance costs (refer to note A5)
Effective income tax rate
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
2018
210.4
$m
(63.1)
(2.2)
2.9
484.4
2.6
(187.2)
(2.5)
(52.4)
(62.3)
(34.3)
%29.6
(0.1)
210.4
711.5
1,868.0
2017
2,579.5
$m
484.4
(106.2)
187.2
2.6
490.0
(12.0)
(115.6)
Total
$m
639.6
1,792.6
-
2,432.2
5.7
599.7
5.7
164.5
419.6
2017
380.0
$m
(114.0)
(1.7)
2.5
599.7
-
(164.5)
(2.4)
(12.8)
(115.6)
(41.7)
%30.4
(0.7)
380.0
41
72
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
121
A Key income statement disclosures
A1 Segment information
(ii) Deferred tax balances
Sydney
2018
The Group's operating segments have been determined based on the internal management reporting structure and the
The balance comprises temporary differences attributable to:
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The Group has three reportable segments:
Balance
1 July 2017
$m
Recognised
in the
income
statement
$m
Recognised
directly in
equity
$m
Balance
30 June 2018
$m
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
18.3
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
10.7
4.2
67.0
Sydney
6.4
$m
1.6
4.2
0.6
(38.7)
Gold Coast
(2.5)
$m
Comprises Treasury's casino operations, including hotel, restaurants and bars.
-
-
-
1.8
Brisbane
0.3
$m
19.9
14.9
4.8
30.1
Total
4.2
$m
Employee provisions
Gold Coast
Other provisions and accruals
Brisbane
Provision for trade impaired debtors
Unrealised financial liabilities
Other
2018
Gross revenues - VIP a
Deferred tax assets set off
Gross revenues - domestic a
Segment revenue (refer to note A2)
Intangible assets
Property, plant and equipment
tax,
Segment
depreciation, amortisation and significant items
Unrealised financial assets
Other
Depreciation and amortisation (refer to note A4)
earnings
interest,
before
Capital expenditure
Net deferred tax (liabilities)/assets
2017
Gross revenues - VIP a
Gross revenues - domestic a
Segment revenue (refer to note A2)
Segment earnings before interest, tax, depreciation,
2017
amortisation and significant items
Employee provisions
Depreciation and amortisation (refer to note A4)
Other provisions and accruals
Provision for trade impaired debtors
Capital expenditure
Unrealised financial liabilities
a
Other
571.4
106.6
1,165.3
(73.7)
1,736.7
(135.7)
285.8
(59.7)
(25.7)
114.2
(294.8)
192.0
132.8
(34.8)
376.9
1.6
509.7
1.4
116.9
41.9
0.5
42.3
45.4
258.5
7.3
2.1
325.8
-
333.1
-
81.7
(0.4)
-
30.7
(0.4)
39.5
Sydney
(188.2)
$m
Gold Coast
10.6
$m
Brisbane
1.7
$m
547.9
1,137.9
Balance
1,685.8
1 July 2016
$m
401.1
18.2
100.2
14.6
180.0
3.9
78.8
6.6
66.3
Recognised
331.3
in the
income
397.6
statement
$m
94.4
0.1
36.3
(3.9)
209.1
0.3
(6.2)
(0.2)
25.4
323.4
Recognised
directly in
348.8
equity
$m
104.2
-
28.0
-
30.5
-
(5.6)
-
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Deferred tax assets set off
122.1
Reconciliation of reportable segment profit to profit before income tax
Intangible assets
Segment earnings before interest, tax, depreciation, amortisation and
Property, plant and equipment
significant items
Unrealised financial assets
Depreciation and amortisation
Other
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Net deferred tax (liabilities)/assets
Profit before income tax (PBT)
(72.4)
(133.8)
(76.8)
(21.0)
(181.9)
(304.0)
(9.9)
(1.3)
(1.9)
5.8
(4.7)
(2.1)
(12.0)
2018
(5.6)
$m
-
-
484.4
11.3
(187.2)
-
(52.4)
11.3
(34.3)
(0.1)
5.7
210.4
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
711.5
73.9
1,868.0
(72.1)
2,579.5
(134.3)
484.4
(18.2)
(25.2)
187.2
(249.8)
490.0
Total
(175.9)
$m
639.6
1,792.6
Balance
2,432.2
30 June 2017
$m
599.7
18.3
164.5
10.7
419.6
4.2
67.0
6.4
2017
106.6
$m
(73.7)
(135.7)
599.7
(59.7)
(164.5)
(25.7)
(12.8)
(294.8)
(41.7)
(0.7)
(188.2)
380.0
41
73
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 122
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
(iii) Tax consolidation
The Group's operating segments have been determined based on the internal management reporting structure and the
Effective June 2011, The Star Entertainment Group Limited (the Head Company) and its 100% owned subsidiaries
nature of products and services provided by the Group. They reflect the business level at which financial information is
formed an income tax consolidation group. Members of the tax consolidation group entered into a tax sharing
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
arrangement that provides for the allocation of income tax liabilities between the entities should the Head Company
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
default on its tax payment obligations. At balance date, the possibility of default is remote.
The Group has three reportable segments:
Tax effect accounting by members of the tax consolidation group
Members of the tax consolidation group have entered into a tax funding agreement effective June 2011. Under the
Sydney
terms of the tax funding agreement, the Head Company and each of the members in the tax consolidation group have
agreed to make a tax equivalent payment to or from the Head Company, based on the current tax liability or current tax
Gold Coast
asset of the member. Deferred taxes are recorded by members of the tax consolidation group in accordance with the
principles of AASB 112 'Income Taxes'. Calculations under the tax funding agreement are undertaken for statutory
Brisbane
reporting purposes.
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Total
The allocation of taxes under the tax funding agreement is recognised as either an increase or decrease in the
2018
$m
subsidiaries' intercompany accounts with the Head Company. The Group has chosen to adopt the Group Allocation
Gross revenues - VIP a
method as outlined in Interpretation 1052 'Tax Consolidation Accounting' as the basis to determine each members'
current and deferred taxes. The Group Allocation method as adopted by the Group will not give rise to any contribution
Gross revenues - domestic a
or distribution of the subsidiaries' equity accounts as there will not be any differences between the current tax amount
that is allocated under the tax funding agreement and the amount that is allocated under the Group Allocation method.
2,579.5
Segment revenue (refer to note A2)
Gold Coast
$m
Brisbane
$m
711.5
1,868.0
571.4
1,165.3
7.3
325.8
132.8
376.9
1,736.7
Sydney
333.1
509.7
$m
(iv)
before
interest,
earnings
tax,
Segment
Income tax payable
depreciation, amortisation and significant items
The balance of income tax payable is the net of current tax and tax instalments/refunds during the year. A current tax
liability arises where current tax exceeds tax instalments paid and a current tax receivable arises where tax instalments
Depreciation and amortisation (refer to note A4)
paid exceed current tax.
Capital expenditure
The income tax (payable) balance is attributable to:
484.4
187.2
490.0
114.2
192.0
258.5
116.9
285.8
39.5
30.7
81.7
42.3
(Payable)
1 July 2017
2017
Gross revenues - VIP a
2018
Gross revenues - domestic a
Tax consolidated group - year ended
30 June 2018
Segment revenue (refer to note A2)
Tax consolidated group - year ended
Segment earnings before interest, tax, depreciation,
30 June 2017 a
amortisation and significant items
Prior years
Depreciation and amortisation (refer to note A4)
Total Australia
Capital expenditure
Overseas subsidiaries
(28.8)
(28.8)
-
-
$m
-
(Increase) /
Sydney
decrease in
$m
tax payable
547.9
$m
1,137.9
(76.7)
1,685.8
1.7
401.1
-
100.2
(75.0)
180.0
-
Tax
Gold Coast
instalment
$m
paid
Over
provision of
tax
Brisbane
$m
Other
66.3
$m
331.3
74.6
397.6
26.0
94.4
-
36.3
100.6
209.1
-
$m
25.4
323.4
-
348.8
2.6
-
2.6
104.2
28.0
-
30.5
(Payable) /
receivable
Total
30 June
$m
2018
639.6
$m
1,792.6
(2.1)
2,432.2
1.8
599.7
-
164.5
(0.3)
419.6
-
(0.3)
$m
-
0.3
-
0.3
-
0.3
Total
a
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
(28.8)
(75.0)
100.6
2.6
2017
The decrease in tax payable is an amendment to the income tax return relating to the application of the tax consolidation
reset.
$m
(Payable)
30 June
2017
599.7
$m
(164.5)
(12.8)
(28.8)
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
2017
Depreciation and amortisation
Tax consolidated group - year ended
Significant items (refer to note A7)
30 June 2017
Unallocated items:
Tax consolidated group - year ended
- net finance costs (refer to note A5)
30 June 2016
- share of net profit/(loss) of associate and joint venture entities accounted
Prior years
for using the equity method (refer to note D5)
Total Australia
Profit before income tax (PBT)
Overseas subsidiaries
Over
provision of
tax
$m
Tax
instalment
paid
$m
(Increase) in
tax payable
$m
(Payable)
1 July 2016
$m
484.4
(187.2)
(52.4)
2018
$m
Other
$m
(106.2)
(106.2)
(20.8)
(20.8)
77.4
-
-
-
-
-
-
-
-
18.2
-
95.6
-
95.6
2.6
(34.3)
(0.1)
210.4
-
2.6
-
2.6
-
-
-
-
-
(41.7)
-
-
(0.7)
(28.8)
380.0
-
(28.8)
41
74
Total
(20.8)
(106.2)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
123
A Key income statement disclosures
A1 Segment information
F3 Earnings per share
The Group's operating segments have been determined based on the internal management reporting structure and the
2017
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
$m
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Net profit after tax attributable to ordinary shareholders
The Group has three reportable segments:
Basic earnings per share (cents per share)
Sydney
Diluted earnings per share (cents per share)
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
2018
$m
148.1
264.4
32.0
31.9
17.5
17.5
Gold Coast
Brisbane
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Sydney
Gold Coast
$m
$m
Weighted average number of shares used as the denominator
2018
Weighted average number of ordinary shares issued at the beginning of the year
Gross revenues - VIP a
Adjustment for issue of new share capital on 16 April 2018 a
Gross revenues - domestic a
Weighted average number of shares used as the denominator
Segment revenue (refer to note A2)
Adjustment for calculation of diluted earnings per share:
tax,
before
earnings
Segment
Adjustment for Performance Rights
depreciation, amortisation and significant items
Weighted average number of ordinary shares and potential ordinary shares
Depreciation and amortisation (refer to note A4)
as used as the denominator in calculating diluted earnings per share at the
end of the year
Capital expenditure
a New shares issued during the year of 91,650,000, being a weighted average for 76 days of 19,083,288.
571.4
1,165.3
132.8
376.9
interest,
1,736.7
116.9
258.5
509.7
114.2
192.0
285.8
42.3
2018
Number
Brisbane
$m
825,672,730
7.3
19,083,288
325.8
844,756,018
333.1
1,243,216
81.7
30.7
845,999,234
39.5
F4 Other assets
2017
Gross revenues - VIP a
Gross revenues - domestic a
Current
Segment revenue (refer to note A2)
Prepayments
Other assets
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Depreciation and amortisation (refer to note A4)
Non current
Rental paid in advance
Capital expenditure
Other assets
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
Gold Coast
$m
66.3
331.3
397.6
94.4
36.3
209.1
Brisbane
$m
2018
25.4
$m
323.4
41.4
348.8
3.4
104.2
44.8
28.0
30.5
9.7
1.5
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
2017
Number
Total
$m
825,672,730
711.5
-
1,868.0
825,672,730
2,579.5
2,037,596
484.4
187.2
827,710,326
490.0
Total
$m
2017
639.6
$m
1,792.6
56.7
2,432.2
4.2
599.7
60.9
164.5
419.6
9.9
2.0
11.9
2017
$m
11.2
2018
$m
Other assets above are shown net of impairment of nil (2017: nil).
F5 Trade and other payables
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
Trade creditors and accrued expenses
significant items
Interest payable
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
Trade and other payables of $365.8 million were up 12.7%, predominately relating to players' funds deposited
(41.7)
- net finance costs (refer to note A5)
at 30 June 2018, which increased in line with the International VIP Rebate volume.
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
322.4
599.7
2.1
(164.5)
(12.8)
324.5
363.3
484.4
2.5
(187.2)
(52.4)
365.8
(34.3)
(0.1)
(0.7)
Profit before income tax (PBT)
210.4
380.0
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
75
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 124
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
F6 Provisions
The Group's operating segments have been determined based on the internal management reporting structure and the
2017
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
$m
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Current
The Group has three reportable segments:
Employee benefits
Workers' compensation
Sydney
Other
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
57.6
6.9
-
52.8
7.6
6.1
2018
$m
Gold Coast
64.5
66.5
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Brisbane
Non-current
Employee benefits
Other
2018
Gross revenues - VIP a
Gross revenues - domestic a
Reconciliation
Reconciliations of each class of provision, except for employee benefits and other, at the end of each financial year are
Segment revenue (refer to note A2)
set out below:
tax,
Segment
Workers' compensation reconciliation
depreciation, amortisation and significant items
7.9
Brisbane
5.0
$m
12.9
7.3
325.8
8.2
Total
1.7
$m
9.9
711.5
1,868.0
Gold Coast
$m
571.4
1,165.3
132.8
376.9
earnings
interest,
Sydney
1,736.7
2,579.5
before
484.4
333.1
509.7
116.9
285.8
$m
Depreciation and amortisation (refer to note A4)
Capital expenditure
2018
Carrying amount at beginning of the year
Provisions made during the year
2017
Provisions utilised during the year
Gross revenues - VIP a
Carrying amount at end of the year
Gross revenues - domestic a
Segment revenue (refer to note A2)
2017
Segment earnings before interest, tax, depreciation,
Carrying amount at beginning of the year
amortisation and significant items
Provisions made during the year
Depreciation and amortisation (refer to note A4)
Provisions utilised during the year
Capital expenditure
Carrying amount at end of the year
114.2
192.0
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
42.3
258.5
Gold Coast
$m
66.3
331.3
397.6
94.4
36.3
209.1
81.7
Workers'
compensation
30.7
(current)
39.5
$m
7.6
Brisbane
0.9
$m
(1.6)
25.4
6.9
323.4
348.8
7.8
104.2
1.3
28.0
(1.5)
30.5
7.6
Other (non-
187.2
current)
490.0
$m
1.7
Total
3.3
$m
-
639.6
5.0
1,792.6
2,432.2
3.4
599.7
-
164.5
(1.7)
419.6
1.7
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Nature and timing of provisions
Workers' compensation
The Group self insures for workers' compensation in both New South Wales and Queensland. A valuation of the
2017
estimated claims liability for workers' compensation is undertaken annually by an independent actuary. The valuations
$m
are prepared in accordance with the relevant legislative requirements of each state and 'Professional Standard 300' of
Reconciliation of reportable segment profit to profit before income tax
the Institute of Actuaries. The estimate of claims liability includes a margin over case estimates to allow for the future
Segment earnings before interest, tax, depreciation, amortisation and
development of known claims, the cost of incurred but not reported claims and claims handling expenses, which are
484.4
significant items
determined using a range of assumptions. The timing of when these costs will be incurred is uncertain.
(187.2)
Depreciation and amortisation
(52.4)
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
599.7
(164.5)
(12.8)
2018
$m
(34.3)
(41.7)
(0.1)
(0.7)
Profit before income tax (PBT)
210.4
380.0
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
76
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
125
A Key income statement disclosures
A1 Segment information
F7 Other liabilities (current)
The Group's operating segments have been determined based on the internal management reporting structure and the
2017
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
$m
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Customer loyalty deferred revenue a
The Group has three reportable segments:
Other deferred revenue
2018
$m
18.2
2.9
18.7
1.6
Sydney
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
a The Group operates customer loyalty programs enabling customers to accumulate award credits for gaming and on-property
20.3
21.1
Brisbane
spend. A portion of the spend, equal to the fair value of the award credits earned, is treated as deferred revenue, and recognised
in the income statement when the award is redeemed or expires.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
F8 Share capital and reserves
(i) Share capital
2018
Gross revenues - VIP a
Ordinary shares - issued and fully paid a
Gross revenues - domestic a
Issue of share capital b
Segment revenue (refer to note A2)
Sydney
$m
571.4
1,165.3
1,736.7
Gold Coast
$m
Brisbane
$m
132.8
376.9
509.7
7.3
2,580.5
325.8
489.7
333.1
3,070.2
Total
$m
711.5
2,580.5
1,868.0
-
2,579.5
2,580.5
before
interest,
earnings
tax,
Segment
depreciation, amortisation and significant items
a There is only one class of shares (ordinary shares) on issue. These ordinary shares entitle the holder to participate in dividends
Depreciation and amortisation (refer to note A4)
and proceeds on winding up of the Company, in proportion to the number and amounts paid on the shares held. On a show of
hands, every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each
share is entitled to one vote. The Company does not have authorised capital nor par value in respect of its issued shares.
Capital expenditure
b On 16 April 2018, the Company issued fully paid ordinary shares to nominated entities of CTF and FEC, as announced to the
285.8
114.2
116.9
258.5
192.0
30.7
42.3
39.5
81.7
187.2
490.0
484.4
market on 29 March 2018.
2017
Gross revenues - VIP a
Gross revenues - domestic a
Segment revenue (refer to note A2)
Movements in ordinary share capital
Balance at beginning of the year
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Issue of fully paid ordinary shares on 16 April 2018
Depreciation and amortisation (refer to note A4)
Balance at the end of the year
Capital expenditure
(ii) Reserves (net of tax)
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
Gold Coast
$m
66.3
331.3
397.6
94.4
36.3
209.1
Brisbane
$m
2018
25.4
Number of
323.4
shares
Total
$m
2017
639.6
Number of
1,792.6
shares
348.8
2,432.2
825,672,730
104.2
91,650,000
28.0
917,322,730
30.5
825,672,730
599.7
-
164.5
825,672,730
419.6
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
2018
$m
2018
(17.2)
$m
10.2
2017
$m
2017
(13.8)
$m
6.6
Hedging reserve a
Share based payments reserve b
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Nature and purpose of reserves
Depreciation and amortisation
a The hedging reserve records fair value changes on the portion of the gain or loss on a hedging instrument in a cash flow hedge
Significant items (refer to note A7)
Unallocated items:
b The share based payments reserve is used to recognise the value of equity settled share based payment transactions provided
to employees, including Key Management Personnel as part of their remuneration. Refer to note F10 for further details on these
- net finance costs (refer to note A5)
plans.
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
(7.0)
484.4
(187.2)
(52.4)
that is determined to be an effective hedge.
(7.2)
599.7
(164.5)
(12.8)
(34.3)
(41.7)
(0.1)
(0.7)
Profit before income tax (PBT)
210.4
380.0
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
77
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 126
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
(iii) Capital management
The Group's operating segments have been determined based on the internal management reporting structure and the
The Group's objectives when managing capital are to ensure the Group continues as a going concern while providing
nature of products and services provided by the Group. They reflect the business level at which financial information is
optimal returns to shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
reduce the cost of capital.
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends to be paid to
The Group has three reportable segments:
shareholders, return capital to shareholders or issue new shares. Gearing is managed primarily through the ratio of net
debt to earnings before interest, tax, depreciation, amortisation, impairment, significant items and share of the net loss
Sydney
of associate and joint venture entities.
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
Net debt comprises interest bearing liabilities, with US dollar borrowings translated at the 30 June 2018 USD/AUD spot
rate of 1.3505 (2017: 1.3003), after adjusting for cash and cash equivalents and derivative financial instruments.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Brisbane
The Groupʼs capital management also aims to ensure that it meets financial covenants attached to the interest bearing
Total
loans and borrowings that define capital structure requirements. There have been no breaches of the financial
covenants of any interest bearing loans and borrowings in the current period. Other than these banking covenants, the
2018
$m
Group is not subject to externally imposed capital requirements.
Gross revenues - VIP a
Gross revenues - domestic a
Gold Coast
$m
Brisbane
$m
571.4
1,165.3
132.8
376.9
Sydney
$m
before
earnings
Segment revenue (refer to note A2)
Gross Debt
tax,
Segment
Net Debt a
depreciation, amortisation and significant items
EBITDA
Depreciation and amortisation (refer to note A4)
Gearing ratio (times)
Capital expenditure
a Net debt is stated after adjusting for cash and cash equivalents less the net position of derivative financial instruments.
678.0
81.7
474.8
30.7
1.4
x
39.5
interest,
1,736.7
258.5
285.8
509.7
192.0
116.9
114.2
42.3
F9 Reconciliation of net profit after tax to net cash inflow from operations
2017
Gross revenues - VIP a
Gross revenues - domestic a
Net profit after tax
Segment revenue (refer to note A2)
- Depreciation and amortisation
- Employee share based payments expense
- Unrealised foreign exchange gain
- Bad and doubtful debts expense
- Finance costs
Capital expenditure
- Share of net loss of associate and joint venture entities
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Depreciation and amortisation (refer to note A4)
Sydney
$m
Gold Coast
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
66.3
Note
331.3
94.4
397.6
A4
F10
A3
A3
A5
209.1
D5
36.3
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Working capital changes
- Increase in trade and other receivables and other assets
- Increase in inventories
- Increase in trade and other payables, accruals and provisions
- (Decrease)/increase in tax provisions
(99.4)
2017
(2.9)
$m
Reconciliation of reportable segment profit to profit before income tax
62.0
Segment earnings before interest, tax, depreciation, amortisation and
19.9
599.7
significant items
473.3
Net cash inflow from operating activities
(164.5)
Depreciation and amortisation
(12.8)
Significant items (refer to note A7)
Operating cash flow before interest and tax was $496.7 million, down 12.5% on the pcp following the low win
Unallocated items:
rate in the International Rebate Business, with 105% EBITDA to cash conversion ratio.
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
(19.8)
2018
(3.6)
$m
32.2
(38.4)
484.4
397.1
(187.2)
(52.4)
(34.3)
(41.7)
(0.1)
(0.7)
Profit before income tax (PBT)
210.4
380.0
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
78
7.3
2018
325.8
$m
333.1
820.0
Brisbane
$m
2018
25.4
$m
323.4
148.1
348.8
187.2
5.5
104.2
-
28.0
7.6
78.2
30.5
0.1
711.5
2017
1,868.0
$m
2,579.5
1,045.0
787.5
484.4
586.2
187.2
1.3
x
490.0
Total
$m
2017
639.6
$m
1,792.6
264.4
2,432.2
164.5
3.8
599.7
(1.1)
164.5
18.7
42.7
419.6
0.7
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 127
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
F10 Employee share plans
The Group's operating segments have been determined based on the internal management reporting structure and the
During the current and prior periods, the Company issued Performance Rights under the Long Term Performance Plan
nature of products and services provided by the Group. They reflect the business level at which financial information is
to eligible employees. The share based payment expense of $5.5 million (2017: $3.8 million) in respect of the equity
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
instruments granted is recognised in the income statement.
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The number of Performance Rights granted to employees and forfeited or lapsed during the year are set out below.
The Group has three reportable segments:
Sydney
2018
Grant Date
Gold Coast
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Lapsed
during the
year
Forfeited
during the
year
Balance at start
of year
Granted during
the year
Vested during
the year a
Balance at end
of year
Comprises Treasury's casino operations, including hotel, restaurants and bars.
-
461,198
-
1 October 2013
Brisbane
26 September 2014
21 September 2015
2018
5 October 2016
Gross revenues - VIP a
2 October 2017
Gross revenues - domestic a
461,198
-
921,619
694,470
-
-
1,141,975
47,904
-
1,785,585
Segment revenue (refer to note A2)
3,219,262
1,833,489
123,254
1,736.7
tax,
Segment
depreciation, amortisation and significant items
2017
earnings
interest,
before
Grant Date
Depreciation and amortisation (refer to note A4)
19 September 2012
Capital expenditure
1 October 2013
461,198
540,583
Balance at start of
year
Granted during
the year
-
-
192.0
Sydney
28,922
$m
43,464
571.4
1,165.3
50,868
Gold Coast
$m
132.8
376.9
509.7
-
-
-
-
-
-
Brisbane
-
$m
-
-
7.3
325.8
461,198
333.1
921,619
Total
665,548
$m
1,146,415
711.5
1,734,717
1,868.0
4,468,299
2,579.5
285.8
Forfeited
during the
year
114.2
116.9
Lapsed during
the year b
42.3
81.7
Vested during
30.7
the year
484.4
Balance at end
187.2
of year
540,583
258.5
-
-
39.5
-
-
-
490.0
461,198
-
-
-
-
-
26 September 2014
895,208
26,411
Sydney
$m
Gold Coast
$m
-
-
32,142
662,328
1,158,988
21 September 2015
2017
5 October 2016
Gross revenues - VIP a
Gross revenues - domestic a
Grants from 1 October 2013 include a market based hurdle (relative TSR) and an EPS component. The Performance
Segment revenue (refer to note A2)
Rights have been independently valued. For the relative TSR component, valuation was based on assumptions
underlying the Black-Scholes methodology to produce a Monte-Carlo simulation model. For the EPS component, a
Segment earnings before interest, tax, depreciation,
discounted cash flow technique was utilised. The total value does not contain any specific discount for forfeiture if the
amortisation and significant items
employee leaves the Group during the vesting period. This adjustment, if required, is based on the number of equity
Depreciation and amortisation (refer to note A4)
instruments expected to vest at the end of each reporting period.
66.3
540,583
331.3
547.9
1,137.9
25.4
323.4
2,559,317
1,217,541
1,685.8
2,432.2
100.2
397.6
348.8
164.5
401.1
104.2
599.7
17,013
17,013
94.4
28.0
36.3
-
-
-
921,619
Total
694,470
$m
1,141,975
639.6
3,219,262
1,792.6
-
Brisbane
-
$m
-
Capital expenditure
a Performance rights granted on 1 October 2013 were tested and vested on 1 October 2017. The TSR percentile rank for the
Company was 85.9%, above the target percentile of 75%. Accordingly 100% of the TSR component vested. The EPS
performance was 24.9 cents and was above the target of 21.8 cents approved by the Board. Accordingly 100% of the EPS
component vested.
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
a
180.0
209.1
30.5
419.6
2017
b Performance rights granted on 19 September 2012 were tested on 19 September 2016 and did not vest. The TSR percentile rank
$m
for the Company was 46.77% and TSR was 54.54%; as a result these Performance Rights lapsed and no shares were issued to
participants.
2018
$m
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
The key assumptions underlying the Performance Rights valuations are set out below:
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
Effective grant date
- share of net profit/(loss) of associate and joint venture entities accounted
1 October 2013
1 October 2017
for using the equity method (refer to note D5)
26 September 2014
Profit before income tax (PBT)
21 September 2015
Share price
at date of
grant
Expected
volatility in
share price
Test and vesting date
26 September 2018
21 September 2019
27.00
27.00
28.00
2.68
3.31
4.82
%
%
%
%
$
5 October 2016
2 October 2017
5 October 2020
2 October 2021
5.89
5.17
25.03
%
24.40
%
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
Expected
dividend yield
%
%1.75
%2.90
%2.70
%2.74
%2.98
484.4
(187.2)
(52.4)
Risk free
interest rate
(34.3)
%
599.7
(164.5)
Average Fair
(12.8)
Value per
Performance
Right
(41.7)
$
%3.03
(0.1)
%2.88
210.4
%1.98
%1.68
%2.28
2.01
(0.7)
2.45
380.0
3.53
4.27
4.02
41
79
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 128
Notes to the financial statements
Notes to the financial statements
For the year ended 30 June 2018
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
F11 Auditor's remuneration
The Group's operating segments have been determined based on the internal management reporting structure and the
2017
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
$
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Amounts received or due and receivable by Ernst & Young (Australia) for:
The Group has three reportable segments:
2018
$
- An audit or review of the Financial Report of the Company and any other
entity in the consolidated group
Sydney
- Other services in relation to the Company and any other entity in the
consolidated group:
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
1,005,000
899,603
Brisbane
- Assurance related
- Other non-audit services including taxation services
Comprises Treasury's casino operations, including hotel, restaurants and bars.
2018
Amounts received or due and receivable by related practices of Ernst &
Gross revenues - VIP a
Young (Australia) for:
Gross revenues - domestic a
571.4
1,165.3
$m
- Assurance related services
132.8
376.9
7.3
325.8
-
Sydney
Gold Coast
$m
22,000
116,253
Brisbane
1,143,253
$m
-
272,439
Total
1,172,042
$m
711.5
1,868.0
-
Segment revenue (refer to note A2)
The auditor of the Company and its controlled entities is Ernst & Young. From time to time, Ernst & Young provides
tax,
Segment
other services to the Group, which are subject to strict corporate governance procedures encompassing the selection
depreciation, amortisation and significant items
of service providers and the setting of their remuneration. The Chair of the Audit Committee (or authorised delegate)
must approve any other services provided by Ernst & Young to the Group.
Depreciation and amortisation (refer to note A4)
earnings
interest,
1,736.7
2,579.5
before
484.4
187.2
116.9
333.1
509.7
285.8
114.2
30.7
42.3
81.7
Capital expenditure
192.0
258.5
39.5
490.0
2017
Gross revenues - VIP a
Gross revenues - domestic a
Segment revenue (refer to note A2)
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Depreciation and amortisation (refer to note A4)
Capital expenditure
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
Gold Coast
$m
Brisbane
$m
66.3
331.3
397.6
94.4
36.3
209.1
25.4
323.4
348.8
104.2
28.0
30.5
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net profit/(loss) of associate and joint venture entities accounted
for using the equity method (refer to note D5)
Profit before income tax (PBT)
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
Total
$m
639.6
1,792.6
2,432.2
599.7
164.5
419.6
2017
$m
599.7
(164.5)
(12.8)
2018
$m
484.4
(187.2)
(52.4)
(34.3)
(41.7)
(0.1)
210.4
(0.7)
380.0
41
80
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
129
A Key income statement disclosures
A1 Segment information
G Accounting policies and corporate information
instruments (refer note B3);
The Group's operating segments have been determined based on the internal management reporting structure and the
− Provision for impairment of trade receivables (refer
Significant accounting policies are contained within the
nature of products and services provided by the Group. They reflect the business level at which financial information is
financial statement notes to which they relate and are not
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
detailed in this section.
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
The Group has three reportable segments:
Corporate Information
The Star Entertainment Group Limited (the Company) is
Sydney
a company incorporated and domiciled in Australia. The
Financial Report of the Company for the year ended 30
June 2018 comprises the Company and its controlled
Gold Coast
entities (collectively referred to as the Group). The
Brisbane
Company's registered office is Level 3, 159 William
Street, Brisbane QLD 4000.
− Significant items (refer note A7); and
− Provisions (refer note F6).
Uncertainty about these assumptions and estimates
could result
that require a material
adjustment to the carrying amount of the asset or liability
in future periods.
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
in outcomes
note B2);
Investments Commission
The Company is of the kind specified in Australian
2018
Securities and
(ASIC)
Gross revenues - VIP a
Instrument 2016/191. In accordance with that Instrument,
amounts in the Financial Report and the Directors'
Gross revenues - domestic a
Report have been rounded to the nearest hundred
to be
thousand dollars, unless specifically stated
Segment revenue (refer to note A2)
otherwise. All amounts are in Australian dollars ($). The
tax,
earnings
Segment
Company is a for profit organisation.
depreciation, amortisation and significant items
The Financial Report was authorised for issue by the
Depreciation and amortisation (refer to note A4)
Directors on 24 August 2018.
interest,
before
financial statements comply with
Capital expenditure
Basis of preparation
The Financial Report is a general purpose Financial
Report which has been prepared in accordance with the
Corporations Act 2001, Australian Accounting Standards
2017
and other mandatory Financial Reporting requirements in
Australia.
Gross revenues - VIP a
The
International
Gross revenues - domestic a
Financial Reporting Standards (IFRS) as issued by the
Segment revenue (refer to note A2)
International Accounting Standards Board.
The financial statements have been prepared under the
Segment earnings before interest, tax, depreciation,
historical cost convention except as disclosed in the
amortisation and significant items
accounting policies below and elsewhere in this report.
Depreciation and amortisation (refer to note A4)
The policies used in preparing the financial statements
are consistent with those of the previous year except as
Capital expenditure
indicated under 'Changes in accounting policies and
disclosures'.
a
Changes in accounting policies and disclosures
The Group has adopted the following new and amended
accounting standards, which became applicable from 1
Sydney
Total
July 2017:
$m
$m
Reference
571.4
AASB 2016-2
1,165.3
Gold Coast
$m
Brisbane
$m
711.5
1,868.0
333.1
Title
7.3
132.8
Amendments to Australian Accounting
325.8
376.9
- Disclosure
Standards
Initiative:
Amendment to AASB 107
509.7
Amendments to Australian Accounting
Standards – Recognition of Deferred
116.9
Tax Assets for Unrealised Losses
Amendments to Australian Accounting
42.3
Annual
Standards
Improvements
Australian
258.5
Accounting Standards
2014-2016
Cycle
30.7
Further
to
39.5
81.7
–
484.4
187.2
490.0
2,579.5
1,736.7
AASB 2016-1
285.8
AASB 2017-2
114.2
192.0
66.3
331.3
Brisbane
$m
Gold Coast
$m
Total
Sydney
The adoption of these standards did not have any
material effect on the financial position or performance of
$m
$m
the Group, additional disclosures have been made where
547.9
required.
1,137.9
Standards and amendments issued but not yet
effective
1,685.8
The Group has not applied Australian Accounting
Standards and IFRS that were issued or amended but
not yet effective. Those significant pronouncements are
disclosed in the table below:
639.6
1,792.6
25.4
323.4
2,432.2
401.1
397.6
348.8
104.2
599.7
94.4
100.2
164.5
36.3
28.0
Reference Title
180.0
AASB 9 *
Financial Instruments
209.1
30.5
Application
date
419.6
1 January 2018
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
AASB 15 * Revenue from Contracts with Customers 1 January 2018
AASB 16 * Leases
to make
Significant accounting judgements, estimates and
assumptions
Preparation of the financial statements in conformity with
Australian Accounting Standards and IFRS requires
Reconciliation of reportable segment profit to profit before income tax
management
judgements, estimates and
Segment earnings before interest, tax, depreciation, amortisation and
assumptions that affect the reported amounts of assets
significant items
and liabilities and the disclosure of contingent liabilities
Depreciation and amortisation
at the date of the financial statements and the reported
Significant items (refer to note A7)
amounts of revenues and expenses during the reporting
period.
Unallocated items:
- net finance costs (refer to note A5)
In the process of applying the Group's accounting
policies, management has made
following
the
- share of net profit/(loss) of associate and joint venture entities accounted
judgements, which have the most significant effect on
for using the equity method (refer to note D5)
the amounts recognised in the consolidated financial
Profit before income tax (PBT)
statements:
− Asset useful lives and residual values (refer notes A4
1 January 2019
2018
$m
484.4
(187.2)
(52.4)
2017
*AASB 9 will replace the incurred loss model under AASB 139
$m
impairment model, which will
with a new expected-loss
accelerate the recognition of expected credit losses. The Group
will apply the simplified approach and record lifetime expected
losses that are estimated based on the present values of all
599.7
cash shortfalls over the remaining life of all its trade receivables
(164.5)
and other receivables. The Group has determined that the
adoption of AASB 9 will not have a material impact on the
(12.8)
provision for impairment on its trade receivables.
AASB 9 also simplifies the requirements for hedge effectiveness
(41.7)
testing in relation to general hedge accounting. The Group has
determined the adoption of AASB 9 will not result in a significant
change to the classification of financial assets and liabilities nor
(0.7)
a material impact on the Group's financial position or net profit.
The Group adopted the new standard on 1 July 2018 on a
cumulative basis rather than retrospectively adjusting prior
periods.
*AASB 15 establishes a single comprehensive model for
accounting for revenue arising from contracts with customers.
The core principles of AASB 15 is that an entity should
41
recognise revenue equating to the transfer of promised goods or
(34.3)
210.4
380.0
(0.1)
and B5);
− Impairment of assets (refer note B6);
− Valuation of derivatives and other
financial
The Star Entertainment Group Limited and its controlled entities
81
The Star Entertainment Group Limited and its controlled entities
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 130
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
the
$m
that
42.3
30.7
81.7
258.5
116.9
333.1
509.7
187.2
484.4
reflects
2,579.5
interest,
earnings
to customers
the accounting
in an amount
Total
$m
132.8
376.9
7.3
325.8
the effective
711.5
1,868.0
Brisbane
$m
Gold Coast
$m
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Transactions and balances
Transactions denominated in foreign currencies are
translated at
the
transaction date.
the rate of exchange ruling on
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Monetary items denominated in foreign currencies are
translated at the rate of exchange ruling at the end of the
reporting period. Gains and losses arising from the
translation are credited or charged to the income
Sydney
statement, with the exception of differences on foreign
currency borrowings that are in an effective hedge
571.4
relationship. These are taken directly to equity until the
liability is extinguished, at which time they are recognised
1,165.3
in the income statement.
1,736.7
Net finance costs
Finance income is recognised as the interest accrues,
285.8
using
interest method. Finance costs
consist of interest and other borrowing costs incurred in
114.2
connection with the borrowing of funds. Finance costs
directly associated with qualifying assets are capitalised,
192.0
all other finance costs are expensed, in the period in
which they occur.
Sydney
Taxation
$m
Income tax
547.9
Income tax comprises current and deferred income tax.
Income tax is recognised in the income statement except
1,137.9
to the extent that it relates to items recognised directly in
equity, in which case it is recognised in equity.
1,685.8
services
the
Foreign currency
The Group's operating segments have been determined based on the internal management reporting structure and the
consideration to which the entity expects to be entitled in
The consolidated financial statements are presented in
nature of products and services provided by the Group. They reflect the business level at which financial information is
exchange for those goods and services. It also requires more
Australian dollars ($) which is the Group's functional and
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
detailed disclosures to enable users of the financial statements
presentation currency.
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
to understand the nature, amount, timing and uncertainty of
revenue and cash flows arising from contracts with customers.
The Group has three reportable segments:
The Group adopted the new standard on 1 July 2018 on a
cumulative basis rather than retrospectively adjusting prior
Sydney
periods.
for complimentary
The standard changes
Gold Coast
services (including rooms, food and beverage, and other
services) that are provided to casino guests as incentives
Brisbane
related to gaming play. Complimentary revenues are currently
excluded from revenues in the accompanying consolidated
income statement prepared in accordance with AASB 118.
Upon adoption of the new standard, gaming revenue will
2018
decrease due to complimentary services provided and revenue
Gross revenues - VIP a
will be recognised in the resulting business category of the
Gross revenues - domestic a
goods or services provided when the services are rendered. The
cost of providing such complimentary services will be regrouped
Segment revenue (refer to note A2)
rebate
respective business categories. Certain
in
commission arrangements with third parties will be reclassified
tax,
before
Segment
out of expenses and netted with revenue. The adoption of this
depreciation, amortisation and significant items
standard is not expected to have a material impact on the
Group's financial position or net profit.
Depreciation and amortisation (refer to note A4)
*Under AASB 16, the distinction between finance and operating
leases is eliminated for lessees (with the exception of short-term
Capital expenditure
and low value leases). Both finance leases and operating leases
will result in the recognition a right-of-use (“ROU”) asset and a
corresponding lease liability on the balance sheet. The liability is
initially measured at the present value of future lease payments
2017
for the lease term and the ROU asset reflects the lease liability
Gross revenues - VIP a
and initial direct costs, less any lease incentives and amounts
required for dismantling.
Gross revenues - domestic a
AASB 16 must be implemented retrospectively, however the
Group has the option as to whether to restate comparatives or
Segment revenue (refer to note A2)
have the cumulative impact of application recognised in opening
Segment earnings before interest, tax, depreciation,
retained earnings on 1 July 2019 ("modified retrospective
amortisation and significant items
approach").
The standard is expected to have a material impact on the
Depreciation and amortisation (refer to note A4)
Group's consolidated balance sheet and income statement.
The ROU asset and lease liability is expected to be material for
Capital expenditure
the Group's current lease portfolio, including long-term leases
for the Sydney and Brisbane properties. The transition to AASB
a
16 will result in a change in presentation in the consolidated
income statement. Rental expenses currently disclosed under
interest expense
property costs will be replaced by an
attributable to the lease liability and a depreciation charge for
the ROU asset.
Reconciliation of reportable segment profit to profit before income tax
The Group will continue to assess the impact of the standard
Segment earnings before interest, tax, depreciation, amortisation and
with the next steps including a detailed review of all agreements.
significant items
Basis of consolidation
Depreciation and amortisation
Controlled entities
Significant items (refer to note A7)
The Group controls an entity when the Group is exposed,
or has rights, to variable returns from its involvement with
Unallocated items:
the entity and has the ability to affect those returns
- net finance costs (refer to note A5)
through its power over the entity.
- share of net profit/(loss) of associate and joint venture entities accounted
Controlled entities are consolidated from the date control
for using the equity method (refer to note D5)
longer
is
Profit before income tax (PBT)
consolidated from the date control ceases.
transactions, balances and unrealised
Intercompany
gains on transactions between Group companies are
eliminated.
Current tax is the expected tax payable on the taxable
401.1
income for the period, and any adjustment to tax payable
in respect of previous years.
100.2
Deferred tax is provided using the balance sheet method,
180.0
providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes.
The following temporary differences are not provided for:
− goodwill; and
− the initial recognition of an asset or liability in a
transaction which is not a business combination and
that affect neither accounting nor taxable profit at the
time of the transaction.
A deferred tax asset is recognised only to the extent that
it is probable that future taxable profits will be available
(0.1)
against which the asset can be utilised.
210.4
The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the
carrying amount of assets and liabilities.
(34.3)
Deferred tax assets and deferred tax liabilities are offset
only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred
tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
41
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Gold Coast
$m
the Group and are no
484.4
(187.2)
(52.4)
599.7
(164.5)
(12.8)
Brisbane
$m
639.6
1,792.6
66.3
331.3
25.4
323.4
Total
$m
2018
$m
2017
$m
transferred
2,432.2
(41.7)
490.0
599.7
164.5
419.6
104.2
397.6
348.8
209.1
380.0
(0.7)
39.5
28.0
94.4
36.3
30.5
to
The Star Entertainment Group Limited and its controlled entities
82
The Star Entertainment Group Limited and its controlled entities
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
131
A Key income statement disclosures
A1 Segment information
residual values over their useful lives. Historical cost
Deferred income tax assets and liabilities are measured
The Group's operating segments have been determined based on the internal management reporting structure and the
includes expenditure that is directly attributable to the
at the tax rates that are expected to apply to the year
nature of products and services provided by the Group. They reflect the business level at which financial information is
acquisition of these items.
when the asset is realised or the liability is settled, based
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
on tax rates (and tax laws) that have been enacted or
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Gains and losses on disposals are determined by
substantively enacted at the reporting date.
comparing the proceeds with the carrying amount and
The Group has three reportable segments:
are recognised in the income statement.
Goods and Services Tax (GST)
Sydney
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
Revenues, expenses, assets and
and bars.
recognised net of the amount of GST except:
− when the GST incurred on a purchase of goods and
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
services
taxation
recoverable
authority, in which case the GST is recognised as
part of the cost of acquisition of the asset or as part
of the expense item as applicable;
When the carrying amount of an asset is greater than its
is written down
it
estimated
immediately to its recoverable amount.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
recoverable amount,
liabilities are
Brisbane
is not
from
the
2018
− casino revenues, due to the GST being offset against
Gross revenues - VIP a
government taxes; and
Gross revenues - domestic a
− receivables and payables, which are stated with the
Segment revenue (refer to note A2)
amount of GST included.
interest,
earnings
The net amount of GST recoverable from, or payable to,
tax,
before
Segment
the taxation authority is included as part of receivables or
depreciation, amortisation and significant items
payables in the balance sheet.
Depreciation and amortisation (refer to note A4)
Cash flows are included in the statement of cash flows
Capital expenditure
on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is
recoverable from, or payable to, the taxation authority is
classified as operating cash flows.
2017
Cash and cash equivalents
Gross revenues - VIP a
Cash and cash equivalents are carried in the balance
Gross revenues - domestic a
sheet at face value. Cash and cash equivalents include
cash balances and call deposits with an original maturity
Segment revenue (refer to note A2)
of three months or less. Bank overdrafts that are
repayable on demand and form an integral part of the
Segment earnings before interest, tax, depreciation,
Group's cash management are included as a component
amortisation and significant items
of cash for the purpose of the statement of cash flows.
Depreciation and amortisation (refer to note A4)
Trade and other receivables
Capital expenditure
Trade receivables are recognised and carried at original
settlement amount less a provision for impairment,
where applicable. Bad debts are written off when they
a
are known to be uncollectible. Subsequent recoveries of
amounts previously written off are credited to the income
statement. Other receivables are carried at amortised
cost less impairment.
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
Inventories
significant items
food and
include consumable stores,
Inventories
beverage and are carried at the lower of cost and net
Depreciation and amortisation
realisable value. Inventories are costed on a weighted
Significant items (refer to note A7)
average basis. Net realisable value is the estimated
Unallocated items:
selling price in the ordinary course of business.
- net finance costs (refer to note A5)
Property, plant and equipment
- share of net profit/(loss) of associate and joint venture entities accounted
Refer to notes A4 and B4 for further details of the
for using the equity method (refer to note D5)
accounting policy, including useful lives of property, plant
Profit before income tax (PBT)
and equipment.
$m
116.9
509.7
333.1
2,579.5
Total
$m
132.8
376.9
7.3
325.8
reliably. All other
Brisbane
$m
Gold Coast
$m
Costs arising subsequent to the acquisition of an asset
are included in the asset's carrying amount or recognised
Sydney
as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with
the item will flow to the Group and the cost of the item
711.5
571.4
repairs and
can be measured
1,868.0
1,165.3
maintenance costs are charged to the income statement
during the financial year in which they are incurred.
1,736.7
Costs relating to development projects are recognised as
an asset when it is:
285.8
− probable that any future economic benefit associated
114.2
− it can be measured reliably.
192.0
If it becomes apparent that the development will not
occur, the amount is expensed to the income statement.
Total
Sydney
Intangible assets
$m
$m
Goodwill
547.9
Goodwill represents the excess of the consideration
1,137.9
transferred over the fair value of the identifiable net
assets acquired and liabilities assumed. Goodwill is
1,685.8
assessed for impairment on an annual basis and is
carried at cost less accumulated impairment losses.
401.1
Impairment losses on goodwill are not reversed.
with the item will flow to the entity; and
Gold Coast
$m
Brisbane
$m
639.6
1,792.6
66.3
331.3
25.4
323.4
2,432.2
484.4
258.5
187.2
104.2
490.0
397.6
348.8
599.7
30.7
81.7
42.3
39.5
94.4
36.3
Goodwill is allocated to cash generating units for the
100.2
purpose of impairment testing. The allocation is made to
180.0
those cash generating units or groups of cash generating
units that are expected to benefit from the business
combination in which the goodwill arose.
419.6
209.1
164.5
30.5
28.0
599.7
(164.5)
(12.8)
Other intangible assets
Indefinite life intangible assets are not amortised and are
assessed annually
impairment. Expenditure on
gaming licences acquired, casino concessions acquired,
computer software and other intangibles are capitalised
line method as
and amortised using
described in note B5.
2017
$m
2018
$m
for
484.4
the straight
(187.2)
(52.4)
(41.7)
Software
Costs associated with developing or maintaining
computer software programs are
recognised as
(34.3)
expenses as incurred. However, costs that are directly
associated with identifiable and unique software products
controlled by the Group and which have probable
economic benefits exceeding the costs beyond one year
are recognised as intangible assets. Direct costs include
staff costs of the software development team and an
relevant overheads.
appropriate portion of
Expenditure meeting
is
41
recognised as a capital improvement and added to the
the definition of an asset
380.0
210.4
(0.1)
(0.7)
the
83
Freehold land is included at cost and is not depreciated.
All other items of property, plant and equipment are
stated at historical cost net of depreciation, amortisation
and impairment, and depreciated over periods deemed
appropriate to reduce carrying values to estimated
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 132
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
42.3
30.7
81.7
116.9
333.1
509.7
484.4
2,579.5
interest,
Total
$m
132.8
376.9
7.3
325.8
711.5
1,868.0
Brisbane
$m
Gold Coast
$m
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Interest bearing
liabilities are classified as current
liabilities unless the Group has an unconditional right to
defer settlement of the liability for at least 12 months
Sydney
after the balance sheet date.
$m
Leases
571.4
Leases of assets where the Group assumes substantially
all the benefits and risks of ownership are classified as
1,165.3
finance leases.
1,736.7
Leases of assets under which substantially all the risks
and benefits of ownership are effectively retained by the
285.8
lessor are classified as operating leases. Payments
made under operating leases are charged to the income
114.2
statement on a straight line basis over the period of the
lease.
192.0
original cost of the asset. These costs are amortised
Interest bearing liabilities
The Group's operating segments have been determined based on the internal management reporting structure and the
using the straight line method, as described in note B5.
Interest bearing liabilities are recognised initially at fair
nature of products and services provided by the Group. They reflect the business level at which financial information is
value and include transaction costs. Subsequent to initial
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
Casino licences and concessions
recognition, interest bearing liabilities are recognised at
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
Refer to note B5 for details and accounting policy.
amortised cost using the effective interest rate method.
The Group has three reportable segments:
Any difference between proceeds and the redemption
Impairment of assets
value is recognised in the income statement over the
Assets that have an indefinite useful life are not subject
Sydney
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
period of the borrowing using the effective interest rate
to depreciation or amortisation and are tested annually
and bars.
method.
for impairment. Assets that are subject to depreciation or
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Gold Coast
amortisation are reviewed for impairment whenever
events or changes in circumstances indicate that the
Brisbane
carrying amount may not be recoverable. An impairment
loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount. The
2018
recoverable amount is the higher of an asset's fair value
Gross revenues - VIP a
less costs of disposal and value in use. For the purpose
of assessing impairment, assets are grouped at the
Gross revenues - domestic a
lowest level for which there are separately identifiable
cash flows (cash generating units). Refer to note B6 for
Segment revenue (refer to note A2)
further details of key assumptions included in the
tax,
before
earnings
Segment
impairment calculation.
depreciation, amortisation and significant items
Provisions
Depreciation and amortisation (refer to note A4)
A provision is recognised in the balance sheet when the
Group has a present legal or constructive obligation as a
Capital expenditure
result of a past event, and it is probable that an outflow
of economic benefits will be required to settle the
obligation and the amount can be reliably estimated. If
the effect is material, provisions are determined by
2017
discounting the expected future cash flows at a pre-tax
Gross revenues - VIP a
rate that reflects current market assessments of the time
Gross revenues - domestic a
value of money and, where appropriate, the risks specific
to the liability.
Segment revenue (refer to note A2)
Investment in associate and joint venture entities
Segment earnings before interest, tax, depreciation,
Associates are all entities over which the Group has
amortisation and significant items
significant influence but not control or joint control. Joint
control is the contractually agreed sharing of the joint
Depreciation and amortisation (refer to note A4)
arrangement, which exists only when decisions about the
Capital expenditure
relevant activities require unanimous consent of the
parties sharing control. A joint venture is a type of
arrangement whereby the parties that have joint control
a
of the arrangement have rights to the net assets of the
joint venture. The Group's investments in associate and
joint venture entities are accounted for using the equity
method of accounting, after initially being recognised at
Reconciliation of reportable segment profit to profit before income tax
cost. Under the equity method of accounting, the
Segment earnings before interest, tax, depreciation, amortisation and
investments are initially recognised at cost and are
significant items
subsequently adjusted to recognise the Group's share of
Depreciation and amortisation
the post-acquisition profits or losses of the investee in
Significant items (refer to note A7)
the
the Group's share of
Unallocated items:
movements in other comprehensive income of the
investee in other comprehensive income. Dividends
- net finance costs (refer to note A5)
received are recognised as a reduction in the carrying
- share of net profit/(loss) of associate and joint venture entities accounted
amount of the investment. The carrying amount of equity-
for using the equity method (refer to note D5)
accounted
in
tested
investments
Profit before income tax (PBT)
accordance with the Group's policy.
Long service leave
The Group's net obligation in respect of long term service
benefits, other than pension plans, is the amount of
2017
future benefit that employees have earned in return for
$m
their service in the current and prior periods. The
future
obligation
increases in wage and salary rates including related on-
costs and expected settlement dates, and is discounted
using rates attached to bonds with sufficiently long
maturities at the balance sheet date, which have maturity
the Group's
dates approximating
the
obligations.
Employee benefits
Post-employment benefits
Sydney
The Group's commitment to defined contribution plans is
$m
limited to making the contributions in accordance with
547.9
the minimum statutory requirements. There is no legal or
constructive obligation to pay further contributions if the
1,137.9
fund does not hold sufficient assets to pay all employees
relating to current and past employee services.
1,685.8
Superannuation guarantee charges are recognised as
401.1
expenses in the income statement as the contributions
become payable. A liability is recognised when the
100.2
Group is required to make future payments as a result of
employees' services provided.
180.0
Annual leave
Liabilities for annual leave are calculated at discounted
amounts based on remuneration rates the Group expects
to pay, including related on-costs when the liability is
expected to be settled. Annual leave is another long term
benefit and is measured using the projected credit unit
method.
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
484.4
(187.2)
(52.4)
terms of
Gold Coast
$m
599.7
(164.5)
(12.8)
income statement, and
Brisbane
$m
is calculated using
639.6
1,792.6
the expected
66.3
331.3
25.4
323.4
Total
$m
impairment
2018
$m
2,432.2
(34.3)
(41.7)
187.2
490.0
599.7
164.5
419.6
258.5
397.6
348.8
104.2
209.1
380.0
210.4
(0.1)
(0.7)
94.4
39.5
28.0
36.3
30.5
for
to
is
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
41
84
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
$m
the
42.3
30.7
81.7
192.0
187.2
258.5
484.4
116.9
333.1
509.7
2,579.5
interest,
earnings
Total
$m
132.8
376.9
7.3
325.8
711.5
1,868.0
Brisbane
$m
the assets and settle
the recognised amount; and
Gold Coast
$m
realise
simultaneously.
Comprises Treasury's casino operations, including hotel, restaurants and bars.
− there is an intention to settle on a net basis, or to
liabilities
Derivative assets and liabilities are offset and the net
Share based payment transactions
The Group's operating segments have been determined based on the internal management reporting structure and the
amount reported in the consolidated balance sheet if,
The Company operates the Long Term Performance
nature of products and services provided by the Group. They reflect the business level at which financial information is
and only if:
Plan (LTPP), which is available to employees at the most
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
− there is a currently enforceable legal right to offset
senior executive levels. Under the LTPP, employees may
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
become entitled to Performance Rights which may
The Group has three reportable segments:
potentially convert to ordinary shares in the Company.
The fair value of Performance Rights is measured at
Sydney
grant date and is recognised as an employee expense
(with a corresponding increase in the share based
Gold Coast
payment reserve) over four years from the grant date
irrespective of whether the Performance Rights vest to
Brisbane
the holder. A reversal of the expense is only recognised
in the event the instruments lapse due to cessation of
employment within the vesting period.
2018
The fair value of the Performance Rights is determined
Gross revenues - VIP a
by an external valuer and takes into account the terms
Gross revenues - domestic a
and conditions upon which the Performance Rights were
granted.
Segment revenue (refer to note A2)
Under the Company's short term performance plan
tax,
before
Segment
(STPP), eligible employees receive two thirds of their
depreciation, amortisation and significant items
annual STPP entitlement in cash and one third in the
form of restricted shares which are subject to a holding
Depreciation and amortisation (refer to note A4)
lock for a period of twelve months. These shares are
Capital expenditure
forfeited in the event that the employee voluntarily
terminates from the Company during the 12 month
holding lock period.
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Hedging
Cash flow hedges
Where a derivative financial instrument is designated as
a hedge of the exposure to variability in cash flows that
Sydney
are attributable to a particular risk associated with a
recognised asset or liability, or a highly probable forecast
571.4
transaction, the effective part of any gain or loss on the
derivative financial instrument is recognised directly in
1,165.3
equity. When the forecast transaction subsequently
1,736.7
results in the recognition of a non financial asset or
liability,
the associated cumulative gain or loss is
removed from equity and included in the initial cost or
285.8
other carrying amount of the non financial asset or
114.2
liability.
If a hedge of a forecast transaction subsequently results
in the recognition of a financial asset or financial liability,
then
that were
Sydney
recognised directly in equity are reclassified into the
income statement in the same period or periods during
$m
which the asset acquired or liability assumed affects the
547.9
income statement (i.e. when interest income or expense
1,137.9
is recognised). For cash flow hedges, the effective part
of any gain or loss on the derivative financial instrument
1,685.8
is removed from equity and recognised in the income
statement in the same period or periods during which the
599.7
401.1
income
hedged
statement. The ineffective part of any gain or loss is
recognised immediately in the income statement.
The cost is recognised in employment costs, together
2017
with a corresponding increase in equity (share based
Gross revenues - VIP a
payment reserve) over the service period. No expense is
Gross revenues - domestic a
recognised for awards that do not ultimately vest. A
liability is recognised for the fair value of cash settled
Segment revenue (refer to note A2)
transactions. The fair value is measured initially and at
Segment earnings before interest, tax, depreciation,
each reporting date up to and including the settlement
amortisation and significant items
date, with changes
in
in
employment costs.
Depreciation and amortisation (refer to note A4)
Derivative financial instruments
Capital expenditure
The Group uses derivative financial instruments to hedge
its exposure to foreign exchange and interest rate risks
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
a
arising
investment
activities. In accordance with its Treasury Policy, the
financial
Group does not hold or
instruments for trading purposes. However, derivatives
Reconciliation of reportable segment profit to profit before income tax
that do not qualify for hedge accounting are accounted
for as trading instruments.
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Derivative financial instruments are recognised initially at
Depreciation and amortisation
fair value at the date the derivative contract is entered
into and are subsequently remeasured to fair value at the
Significant items (refer to note A7)
end of each reporting period. The resulting gain or loss is
Unallocated items:
income statement.
recognised
the
in
- net finance costs (refer to note A5)
However, where derivatives qualify for cash flow hedge
- share of net profit/(loss) of associate and joint venture entities accounted
accounting, the effective portion of the gain or loss is
for using the equity method (refer to note D5)
deferred
is
the
in equity while
recognised in the income statement.
Profit before income tax (PBT)
The fair value of interest rate swap, cross currency swap
and
is determined by
reference to market values for similar instruments. Refer
to note E2 for details of fair value determination.
419.6
is sold,
When a hedging
terminated or exercised, or the designation of the hedge
relationship
forecast
transaction is still expected to occur, the cumulative gain
2017
or loss at that point remains in equity and is recognised
$m
in accordance with the above when the transaction
occurs. If the hedged transaction is no longer expected
to take place, then the cumulative unrealised gain or loss
recognised in equity is recognised immediately in the
income statement.
599.7
(164.5)
Fair value hedges
(12.8)
Where a derivative financial instrument is designated as
a hedge of the exposure to variability in the fair value of a
(41.7)
recognised asset or liability, any change in the fair value
of the hedge is recognised in the income statement as a
(0.7)
finance cost. The change in the fair value of the hedged
item attributable to the risk hedged is recorded as part of
the carrying value of the hedged item and is also
recognised in the income statement as a finance cost.
forward currency contracts
the associated gains and
Gold Coast
$m
484.4
(187.2)
(52.4)
instrument expires or
Brisbane
$m
transaction affects
ineffective portion
from operational,
639.6
1,792.6
issue derivative
financing and
revoked but
25.4
323.4
66.3
331.3
the hedged
Total
$m
immediately
recognised
2018
$m
fair value
forecast
2,432.2
losses
(34.3)
100.2
348.8
104.2
209.1
164.5
180.0
397.6
490.0
380.0
210.4
(0.1)
94.4
36.3
28.0
30.5
39.5
the
is
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
133
41
85
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018ANNUAL REPORT 2018 134
Notes to the financial statements
For the year ended 30 June 2018
Notes to the financial statements
For the year ended 30 June 2018
A Key income statement disclosures
A1 Segment information
to
shares. Any
the
Comprises The Star Sydney's casino operations, including hotels, apartment complex, restaurants
and bars.
Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants and bars.
Issued capital
The Group's operating segments have been determined based on the internal management reporting structure and the
Issued and paid up capital is recognised at the fair value
nature of products and services provided by the Group. They reflect the business level at which financial information is
of the consideration received. Issued capital comprises
provided to the executive decision makers, being the Managing Director and Chief Executive Officer and the Group
transaction costs directly
ordinary
Chief Financial Officer, for decision making regarding resource allocation and performance assessment.
attributable
issue of ordinary shares are
The Group has three reportable segments:
recognised directly in equity, net of tax, as a reduction of
the share proceeds received.
Sydney
Operating segment
An operating segment is a component of an entity that
Gold Coast
engages in business activities from which it may earn
revenues and incur expenses (including revenues and
Brisbane
expenses relating to transactions with other components
of the same entity), whose operating results are regularly
reviewed by the entity's executive decision makers to
2018
allocate resources and assess its performance.
Gross revenues - VIP a
The Group aggregates two or more operating segments
Gross revenues - domestic a
when they have similar economic characteristics, and the
segments are similar in each of the following respects:
Segment revenue (refer to note A2)
− nature of the products and services;
tax,
before
Segment
− type or class of customer for the products and
depreciation, amortisation and significant items
Comprises Treasury's casino operations, including hotel, restaurants and bars.
Gold Coast
$m
Brisbane
$m
711.5
1,868.0
571.4
1,165.3
7.3
325.8
132.8
376.9
Total
$m
earnings
interest,
Sydney
1,736.7
2,579.5
484.4
116.9
333.1
509.7
285.8
81.7
$m
services;
Depreciation and amortisation (refer to note A4)
− methods used to distribute the products or provide
the services; and
Capital expenditure
− nature of the regulatory environment.
Segment results include revenue and expenses directly
attributable to a segment and exclude significant items.
2017
Capital expenditure represents the total costs incurred
Gross revenues - VIP a
during the period to acquire segment assets, including
Gross revenues - domestic a
capitalised interest.
Segment revenue (refer to note A2)
Dividend distributions
Dividend distributions to the Company's shareholders are
Segment earnings before interest, tax, depreciation,
financial
recognised as a
in
liability
amortisation and significant items
statements in the period in which the dividends are
declared.
Depreciation and amortisation (refer to note A4)
the Group's
Basic earnings per share
Capital expenditure
Basic earnings per share is calculated by dividing the net
earnings after tax for the period by the weighted average
a
number of ordinary shares outstanding during the period.
114.2
192.0
Sydney
$m
547.9
1,137.9
1,685.8
401.1
100.2
180.0
42.3
258.5
30.7
39.5
Gold Coast
$m
Brisbane
$m
66.3
331.3
397.6
94.4
36.3
209.1
25.4
323.4
348.8
104.2
28.0
30.5
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances.
Diluted earnings per share
Diluted earnings per share is calculated by dividing the
Reconciliation of reportable segment profit to profit before income tax
net earnings attributable to ordinary equity holders
adjusted by the after tax effect of:
Segment earnings before interest, tax, depreciation, amortisation and
− any dividends or other items related to dilutive
significant items
potential ordinary shares deducted in arriving at profit
Depreciation and amortisation
or loss attributable to ordinary equity holders;
Significant items (refer to note A7)
− any interest recognised in the period related to
Unallocated items:
- net finance costs (refer to note A5)
− any other changes in income or expense that would
- share of net profit/(loss) of associate and joint venture entities accounted
result from the conversion of the dilutive potential
for using the equity method (refer to note D5)
ordinary shares;
dilutive potential ordinary shares; and
Profit before income tax (PBT)
by the weighted average number of issued ordinary
shares plus the weighted average number of ordinary
shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
187.2
490.0
Total
$m
639.6
1,792.6
2,432.2
599.7
164.5
419.6
2017
$m
599.7
(164.5)
(12.8)
2018
$m
484.4
(187.2)
(52.4)
(34.3)
(41.7)
(0.1)
210.4
(0.7)
380.0
41
86
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018THE STAR ENTERTAINMENT GROUP 135
Directors' Declaration
DIRECTORS' DECLARATION
FOR THE YEAR ENDED 30 JUNE 2018
In the opinion of the Directors of The Star Entertainment Group Limited (the Company):
(a)
the financial statements and notes of the Group are in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group's consolidated financial position as at 30 June 2018 and of its
performance for the year ended on that date; and
(ii)
complying with the Accounting Standards and the Corporations Regulations 2001;
(b)
the Financial Report also complies with International Financial Reporting Standards as disclosed in note G; and
(c)
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and
payable.
This declaration has been made after receiving the declarations required to be made to the directors in accordance with
section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors.
John O'Neill AO
Chairman
Sydney
24 August 2018
87
ANNUAL REPORT 2018 136
INDEPENDENT AUDITOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2018
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent Auditor's Report to the Members of The Star
Entertainment Group Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of The Star Entertainment Group Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2018, the
consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, notes to the financial statements, including a summary of
significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2018 and of its
consolidated financial performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditors Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Boards
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial report of the current year. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters.
For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditors Responsibilities for the Audit of the Financial
Report section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of the
financial report. The results of our audit procedures, including the procedures performed to address the matters
below, provide the basis for our audit opinion on the accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
88
THE STAR ENTERTAINMENT GROUP
INDEPENDENT AUDITOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2018
137
Recoverability of trade receivables
Why significant to the audit
How our audit addressed the key audit matter
As disclosed in Note B2, the Groups consolidated
statement of financial position included $208.4m of
gross trade receivables and an associated provision for
impairment of $16m at 30 June 2018.
The Directors assessment as to the recoverability of
trade receivables relating to VIP revenue involves
judgment, specifically relating to the individual
circumstances of each aged debtor.
This was a key audit matter due to the inherent
subjectivity that is involved in making judgments in
relation to credit exposures to determine the
recoverability of trade receivables.
Our audit procedures included the following:
x
x
x
Reviewed the Groups data around historical
collections of aged receivables to determine
the reasonableness of the provisioning.
Selected samples of the larger aged trade
receivable balances where both a provision
for impairment of trade receivables was
recognised and was not recognised and
assessed the rationale behind the
provisioning decisions made by the Group
for each debtor. We considered historical
payment patterns, whether any post year
end payments had been received and
examined the Groups available information
regarding individual debtor circumstances.
Reviewed the accuracy of historical
provisions recorded by the Group by
analysing actual outcomes for debt recovery
and/or write off against historical
provisions.
x We assessed the Groups receivables
disclosures and related impairment
provisions in the financial report.
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ANNUAL REPORT 2018
138
INDEPENDENT AUDITOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2018
Goodwill impairment assessment
Why significant to the audit
How our audit addressed the key audit matter
At 30 June 2018, the Groups consolidated statement
of financial position included $1,442.2m of goodwill.
Our audit procedures included the following:
As disclosed in Note B6 to the consolidated financial
statements, the Directors impairment testing of
goodwill involved critical accounting estimates and
assumptions, specifically relating to future discounted
cash flows. These estimates and assumptions,
summarised in Note B6 to the consolidated financial
statements, are impacted by the future performance of
the Group, market and regulatory environments.
We considered this to be a key audit matter due to the
magnitude of the balance and the significant judgments
and assumptions involved in the impairment testing
process.
x
x
x
x
x
x
x
Assessed whether the methodology used by
the Directors met the requirements of
Australian Accounting Standards.
Tested the mathematical accuracy of the
Groups discounted cash flow model.
Compared the cash flow forecasts with the
Board approved fiveyear business.
Together with our valuation specialists, we
assessed the assumptions supporting the
cash flow forecasts.
Considered the discount rate and the
terminal growth rate used with involvement
from our valuation specialists.
Evaluated the sensitivity analysis performed
by the Group focusing on the Cash
Generating Units where we believed a
reasonably possible change in assumptions
could cause the carrying amount to exceed
its recoverable amount.
Evaluated whether the impairment
disclosures including the judgments and
estimates disclosures in the consolidated
financial report met the requirements of
Australian Accounting standards.
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90
THE STAR ENTERTAINMENT GROUP
INDEPENDENT AUDITOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2018
Information Other than the Financial Report and Auditors Report
The directors are responsible for the other information. The other information comprises the information included
in the Groups 2018 Annual Report other than the financial report and our auditors report thereon. We obtained
the Directors Report that is to be included in the Annual Report prior to the date of this auditors report, and we
expect to obtain the remaining sections of the Annual Report after the date of this auditors report.
Our opinion on the financial report does not cover the other information and we do not and will not express any
form of assurance conclusion thereon with the exception of the Remuneration Report and our related assurance
opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this auditors
report, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Groups ability to continue as a
going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
x
x
x
x
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Groups internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Groups ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditors report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditors report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
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91
ANNUAL REPORT 2018
140
INDEPENDENT AUDITOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2018
x
x
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the directors, we determine those matters that were of most significance in
the audit of the financial report of the current year and are therefore the key audit matters. We describe these
matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 16 to 35 of the directors' report for the year ended
30 June 2018.
In our opinion, the Remuneration Report of The Star Entertainment Group Limited for the year ended 30 June
2018, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Ernst & Young
Megan Wilson
Partner
Sydney
24 August 2018
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92
THE STAR ENTERTAINMENT GROUP
141
SHAREHOLDER INFORMATION
AS AT 24 AUGUST 2018
ORDINARY SHARE CAPITAL
The Star Entertainment Group Limited has 917,322,730 fully paid ordinary shares on issue.
SHAREHOLDING RESTRICTIONS
The Star Entertainment Group’s Constitution, as well as certain agreements entered into with the New South Wales Independent Liquor and Gaming
Authority and the Queensland Office of Liquor and Gaming Regulation, contain certain restrictions prohibiting an individual from having a voting power of
more than 10% in The Star Entertainment Group without the written consent of the New South Wales Independent Liquor and Gaming Authority and of the
Queensland Minister. The Star Entertainment Group may refuse to register any transfer of shares which would contravene these shareholding restrictions or
require divestiture of the shares that cause an individual to exceed the shareholding restrictions.
In July 2012, written consent was granted by the New South Wales Independent Liquor and Gaming Authority and the relevant Queensland Minister
for Perpetual Investment Management Limited to increase its shareholding in The Star Entertainment Group from 10% up to a maximum of 15% of
issued shares.
In December 2015, written consent was granted by the New South Wales Independent Liquor and Gaming Authority and the relevant Queensland Minister
for Genting Hong Kong Limited and its associates to increase their aggregate potential voting power in The Star Entertainment Group from 10% up to an
effective maximum of 23% (which may be adjusted in certain circumstances).
VOTING RIGHTS
All ordinary shares issued by The Star Entertainment Group Limited carry one vote per share. Performance rights do not carry any voting rights.
Gambling legislation in New South Wales and Queensland and The Star Entertainment Group’s Constitution contain provisions regulating the exercise of
voting rights by persons with prohibited shareholding interests, as well as the regulation of shareholding interests.
The relevant Minister has the power to request information to determine whether a person has a prohibited shareholding interest. If a person fails to furnish
these details within the time specified or, in the opinion of the Minister, the information is false or misleading, then the Minister can declare the voting rights of
those shares suspended.
Failure to comply with gambling legislation in New South Wales and Queensland or The Star Entertainment Group’s Constitution, including the shareholder
restrictions mentioned above, may result in suspension of voting rights.
EQUITY PLACEMENT
On 29 March 2018, The Star Entertainment Group Limited announced that:
a.
b.
it had entered into a subscription agreement dated 28 March 2018 with its joint venture partners, Chow Tai Fook Enterprises Limited (CTF) and Far East
Consortium International Limited (FEC) (Subscription Agreement) under which the respective nominated entities of each of CTF and FEC separately
acquire 45,825,000 new fully paid ordinary shares in The Star Entertainment Group (equivalent to a 4.99% stake each) at $5.35 per share, for a total
consideration of $245,163,750 each; and
in addition to existing agreements, The Star Entertainment Group had entered into a Strategic Alliance Agreement with CTF and FEC which provides a
framework for the three parties to work together further to grow The Star Entertainment Group’s properties and businesses, collaborate on potentially
mutually beneficial development opportunities and establish a marketing alliance (Strategic Alliance).
In accordance with the terms of the Subscription Agreement, 45,825,000 new fully paid ordinary shares were issued to each of the respective nominated
entities of CTF and FEC on 16 April 2018.
TOP-UP RIGHT
The Subscription Agreement grants to CTF and FEC certain top‑up rights that entitles each of them to participate in future equity raisings undertaken by
The Star Entertainment Group during the term of the Strategic Alliance in order to maintain their pre‑equity raising ownership interests (Top-Up Right).
The ASX has granted The Star Entertainment Group a waiver from listing rule 6.18 which prohibits an entity from granting an option exercisable over a
percentage of the entity’s capital. The waiver granted by ASX permits CTF and FEC (and their nominees) to maintain, by way of a right to participate in
any issue of shares or to subscribe for shares, their percentage relevant interest in the issued share capital of The Star Entertainment Group in respect of a
diluting event.
The waiver from listing rule 6.18 is subject to the terms and conditions imposed by ASX which are set out in The Star Entertainment Group’s ASX
Announcement dated 21 May 2018, including a requirement that a summary of the Top‑Up Right be included in each Annual Report.
ANNUAL REPORT 2018 142
SHAREHOLDER INFORMATION
AS AT 24 AUGUST 2018
In accordance with the Top‑Up Right, if The Star Entertainment Group undertakes an equity raising during the term of the Strategic Alliance which would
result in The Star Entertainment Group issuing 1% or more of its share capital (or would have such an effect in the case of an issue of convertible securities)
(Equity Raising), then The Star Entertainment Group must give each of CTF and FEC (or their respective nominees) an opportunity to participate in the Equity
Raising on a basis that allows them to maintain their pre‑Equity Raising shareholding percentage.
CTF and FEC (or their respective nominees) will be entitled to participate in the Equity Raising on the same terms and conditions (including price) as all other
participants in the Equity Raising.
The Top‑Up Right does not operate in respect of issues of securities:
• under a dividend or distribution plan;
• under an employee incentive scheme (including on the conversion of any convertible securities issued under any such scheme);
• pursuant to any takeover bid or scheme of arrangement; or
• as consideration for the acquisition of an asset by The Star Entertainment Group or any of its related bodies corporate.
The Top‑Up Right will automatically terminate in circumstances where:
• CTF or FEC or their respective nominees and affiliates (as applicable) cease to hold the shares issued under the Subscription Agreement; or
• the waiver of ASX Listing Rule 6.18 ceases to apply (either as a result of the lapse of time or CTF or FEC no longer complying with the terms and conditions
of the waiver), whichever occurs first.
If the Top‑Up Right ceases or terminates, and The Star Entertainment Group undertakes an Equity Raising then (subject to any applicable laws, rules or
regulations) it must consider making (but is not obliged to make) an offer to CTF and FEC (or their respective nominees) to participate in the Equity Raising on
a basis that allows them to maintain their pre‑Equity Raising shareholding percentage.
SUBSTANTIAL SHAREHOLDERS
The following is a summary of the substantial shareholders as at 24 August 2018 pursuant to notices lodged with ASX in accordance with section 671B of the
Corporations Act 2001:
NAME
DATE OF INTEREST
National Australia Bank Limited and its associated
entities
12 February 2018
Firmament Investment Pte. Ltd and its associated
entities
16 April 2018
Far East Consortium International Limited, its
controlled entities and its associated entities
16 April 2018
Commonwealth Bank of Australia and its related
bodies corporate
18 April 2018
Perpetual Limited and its related bodies corporate
(including Perpetual Investment Management
Limited)
4 May 2018
NUMBER OF
ORDINARY SHARES (i)
% OF ISSUED
CAPITAL (ii)
44,668,903
5.41%
45,825,000
4.995%
45,825,000
4.995%
56,654,931
6.18%
96,392,380
10.51%
(i) As disclosed in the last notice lodged with the ASX by the substantial shareholder.
(ii) The percentage set out in the notice lodged with the ASX is based on the total issued share capital of The Star Entertainment Group Limited at the date of interest.
LESS THAN MARKETABLE PARCELS
There were 6,715 shareholders holding less than a marketable parcel of 95 ordinary shares (valued at $500 or less, based on a market price of $5.30) at the
close of trading on 24 August 2018 and they hold a total of 425,524 ordinary shares.
SECURITIES PURCHASED ON-MARKET
The following securities were purchased on‑market during the financial year for the purposes of The Star Entertainment Group’s Long Term Performance Plan
(LTPP) and General Employee Share Plan (GESP).
Ordinary Shares (for GESP)
Ordinary Shares (for LTPP)
NUMBER OF SHARES PURCHASED
AVERAGE PRICE PAID PER SHARE
94,835
461,198
$5.5582
$5.2492
THE STAR ENTERTAINMENT GROUP 143
SHAREHOLDER INFORMATION
AS AT 24 AUGUST 2018
TWENTY LARGEST REGISTERED SHAREHOLDERS – ORDINARY SHARES*
RANK
NAME
NUMBER OF
SHARES HELD
% OF ISSUED
CAPITAL
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
UBS NOMINEES PTY LTD
CS THIRD NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
CS FOURTH NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
AMP LIFE LIMITED
SEYMOUR GROUP PTY LTD
BNP PARIBAS NOMS (NZ) LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MUTUAL TRUST PTY LTD
ARGO INVESTMENTS LIMITED
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
PACIFIC CUSTODIANS PTY LIMITED
335,299,129
151,148,395
124,464,939
73,657,304
26,491,201
23,250,943
13,940,145
13,195,425
8,474,097
7,165,000
5,717,003
4,873,518
2,075,652
1,750,000
1,597,059
1,583,384
1,536,349
1,500,000
1,329,112
1,070,443
36.55%
16.48%
13.57%
8.03%
2.89%
2.53%
1.52%
1.44%
0.92%
0.78%
0.62%
0.53%
0.23%
0.19%
0.17%
0.17%
0.17%
0.16%
0.14%
0.12%
Total of top 20 registered shareholders
800,119,098
87.21%
* on a grouped basis
DISTRIBUTION OF SECURITIES HELD
Range of Holding
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
ORDINARY SHARES
PERFORMANCE RIGHTS 1
No. of Holders
No. of Securities
No. of Holders
No. of Securities
47,793
19,666
2,563
1,177
73
71,272
16,421,985
41,912,024
17,935,394
23,258,065
817,795,262
917,322,730
0
0
0
23
8
31
0
0
0
840,257
3,628,042
4,468,299
1 Performance Rights were issued pursuant to The Star Entertainment Group’s Long Term Performance Plan. Refer to the Remuneration Report for more information about The Star Entertainment
Group’s Long Term Performance Plan.
ANNUAL REPORT 2018 144
SHAREHOLDER INFORMATION
AS AT 24 AUGUST 2018
VOLUNTARY ESCROW
There are no securities under voluntary escrow.
SHARE BUY-BACKS
There is no current or planned buy‑back of The Star Entertainment
Group’s shares.
ANNUAL REPORT
This Annual Report is available on‑line from The Star Entertainment
Group’s website www.starentertainmentgroup.com.au. Annual Reports will
only be sent to those shareholders who have requested to receive a copy.
Shareholders who no longer wish to receive a hard copy of the Annual Report
or wish to receive the Annual Report electronically are encouraged to contact
the share registry. This will assist with reducing the costs of production of the
hard copy of the Annual Report.
WEBSITE
The Star Entertainment Group’s website
www.starentertainmentgroup.com.au offers investors a wide range of
information regarding its activities and performance, including Annual
Reports, interim and full year financial results, webcasts of results and
Annual General Meeting presentations, major news releases and other
company statements.
SHAREHOLDER RELATIONS
Investors seeking more information about the Company are invited to
contact The Star Entertainment Group’s Shareholder Relations Team:
Address:
Telephone:
Facsimile:
Email:
GPO Box 13348
George Street Post Shop
Brisbane QLD 4003
+61 7 3228 0000
+61 7 3228 0099
investor@star.com.au
SHAREHOLDER ENQUIRIES
Investors seeking information about their shares in The Star Entertainment
Group should contact The Star Entertainment Group’s share registry.
Investors should have their Shareholder Reference Number (SRN) or
Holder Identification Number (HIN) available to assist the share registry in
responding to their enquiries.
SHARE REGISTRY
LINK MARKET SERVICES LIMITED
Address:
Level 12, 680 George Street
Sydney NSW 2000
Postal address: The Star Entertainment Group Limited
C/‑ Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
Australia
+61 1300 880 923 (toll free within Australia)
+61 2 9287 0303
starentertainment@linkmarketservices.com.au
www.linkmarketservices.com.au
Telephone:
Facsimile:
E‑mail:
Website:
GENERAL ENQUIRIES
Investor information is available on The Star Entertainment Group’s website
www.starentertainmentgroup.com.au, including major announcements,
Annual Reports, and general company information.
2018 CORPORATE GOVERNANCE STATEMENT
The 2018 Corporate Governance Statement can be found on The Star
Entertainment Group’s website
www.starentertainmentgroup.com.au/corporate-governance.
2018 ANNUAL GENERAL MEETING
The Annual General Meeting of The Star Entertainment Group Limited will be
held on Thursday, 1 November 2018 in the Theatre at The Star Gold Coast,
Broadbeach Island, Broadbeach, Queensland, commencing at 10:00am
(Queensland time).
THE STAR ENTERTAINMENT GROUP
COMPANY DIRECTORY
145
REGISTERED OFFICE
The Star Entertainment Group Limited
Level 3, 159 William Street
Brisbane Qld 4000
Telephone:
Facsimile:
Email:
+ 61 7 3228 0000
+ 61 7 3228 0099
investor@star.com.au
WEBSITE
www.starentertainmentgroup.com.au
QUEEN’S WHARF BRISBANE
GENERAL ENQUIRIES
Telephone:
Email:
qwbenquiries@destinationbrisbane.com.au
www.queenswharfbrisbane.com.au
1800 104 535
AUDITOR
Ernst & Young
KEY DATES FOR FY2018/19*
FY2017 FULL YEAR RESULTS
ANNOUNCEMENT:
24 August 2018
FINAL DIVIDEND RECORD DATE:
30 August 2018
FINAL DIVIDEND PAYMENT DATE:
4 October 2018
NEW SOUTH WALES OFFICE
Level 3, 60 Union Street
Pyrmont NSW 2009
Telephone:
+ 61 2 9657 7600
ABOUT THIS ANNUAL REPORT
2018 ANNUAL GENERAL MEETING:
1 November 2018
CURRENCY
References to currency in this Annual Report are in
Australian Dollars unless otherwise stated.
FY2019 HALF YEAR RESULTS
ANNOUNCEMENT:
21 February 2019
2019 FINANCIAL YEAR END:
30 June 2019
FY2019 FULL YEAR RESULTS
ANNOUNCEMENT:
16 August 2019
2019 ANNUAL GENERAL MEETING:
24 October 2019
*2019 dates are subject to change.
QUEENSLAND OFFICE
Level 3, 159 William Street
Brisbane QLD 4000
Telephone:
+ 61 7 3228 0000
STOCK EXCHANGE LISTING
The Star Entertainment Group’s securities are
quoted on the Australian Securities Exchange
(ASX) under the share code “SGR”.
THE STAR SYDNEY
80 Pyrmont Street
Pyrmont NSW 2009
Reservations:
Telephone:
www.thestarsydney.com.au
1800 700 700
+ 61 2 9777 9000
THE STAR GOLD COAST
Broadbeach Island
Broadbeach QLD 4218
Reservations:
Telephone:
www.thestargoldcoast.com.au
1800 074 344
+ 61 7 5592 8100
TREASURY CASINO AND
HOTEL BRISBANE
George Street
Brisbane QLD 4000
Reservations:
Telephone:
www.treasurybrisbane.com.au
1800 506 889
+ 61 7 3306 8888
COPYRIGHT
Information in this report has been prepared
by The Star Entertainment Group Limited,
unless otherwise indicated. Information may be
reproduced provided it is reproduced accurately
and not in a misleading context. Where the
material is being published or issued to others,
the sources and copyright status should
be acknowledged.
INVESTMENT WARNING
This Annual Report may include forward looking
statements and references which, by their very
nature, involve inherent risks and uncertainties.
These risks and uncertainties may be matters
beyond The Star Entertainment Group’s control
and could cause actual results to vary (including
materially) from those predicted.
Forward looking statements are not guarantees
of future performance. Past performance of
shares is not indicative of future performance
and should not be relied upon as such. The value
of investments and any income from them is
not guaranteed and can fall as well as rise. The
Star Entertainment Group recommends that
investors make their own assessments and seek
independent professional advice before making
investment decisions.
PRIVACY
The Star Entertainment Group respects
the privacy of its stakeholders. The Star
Entertainment Group’s Privacy Policy Statement
is available on The Star Entertainment Group’s
website at www.starentertainmentgroup.com.au.
ANNUAL REPORT 2018