1
ANNUAL REPORT 2019
ANNUAL REPORT 2019 2
In FY2019, The Star Entertainment Group made significant strides in
realising its vision of becoming Australia’s leading integrated resort.
Included among these milestones was the commencement of
construction phases across our South East Queensland projects that
will deliver up to $9 billion investment into the region.
Cover:
© Destination Gold Coast Consortium.
The Star Gold Coast Tower 2.
Concept image only, subject
to all approvals.
THE STAR ENTERTAINMENT GROUP CONTENTS
3
04
05
06
08
10
12
OUR VISION
OUR HIGHLIGHTS
MESSAGES
CHAIRMAN
CEO
BOARD AND EXECUTIVE
BOARD OF DIRECTORS
EXECUTIVE TEAM
14
GROUP PERFORMANCE
KEY PROJECTS
QUEEN’S WHARF BRISBANE
THE STAR GOLD COAST
THE STAR SYDNEY
SUSTAINABILITY
SUSTAINABILITY HIGHLIGHTS
SUSTAINABILITY STRATEGY
OUR APPROACH
DELIVERING RESOURCE EFFICIENCY PROJECTS
SUSTAINABILITY IN OUR SUPPLY CHAIN
TRUSTED COMPANY PARTNERS
LEADING COMPANY
TALENTED TEAMS
DIRECTORS’, REMUNERATION AND FINANCIAL REPORT
DIRECTORS’ REPORT
REMUNERATION REPORT
FINANCIAL REPORT
16
18
20
22
23
24
28
32
34
38
42
46
47
62
80
141
SHAREHOLDER INFORMATION
145
CORPORATE GOVERNANCE STATEMENT DETAILS
145
ANNUAL GENERAL MEETING DETAILS
146
COMPANY DIRECTORY
147
KEY DATES
© Destination Brisbane Consortium.
All rights reserved. Artist impression
only. Subject to planning approvals
ANNUAL REPORT 2019
4
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.
PILLARS
Thrilling
Experiences
Accessible Luxury
Local Spirit
PRIORITIES
VALUES
SERVICE COMMITMENTS
Shareholder Value
Ownership
True Teamwork
Welcoming
City Pride
World Class
Properties
Leadership in
Loyalty
Excellence in
Guest Service
Talented Teams
LIVE IT
Be Human
BRING IT
Be Your Best Self
OWN IT
Be a Star Player
DELIVER IT
Be the Perfect Host
© Destination Brisbane Consortium.
All rights reserved. Artist impression only.
Subject to planning approvals
THE STAR ENTERTAINMENT GROUP 5
OUR HIGHLIGHTS
FINANCIALS
20.5
MAINTAINED RECORD
DIVIDEND PER SHARE (cents)
$198m
STATUTORY NPAT ($M)
$552.8m
STATUTORY EBITDA ($M)
20.5
20.5
264.40
16
198
148.10
599.7
484.4
552.8
FY17
FY18
FY19
FY17
FY18
FY19
FY17
FY18
FY19
AWARDS
FORBES 5 STAR RATING
The Darling Sydney the only
luxury hotel in New South Wales
to receive the prestigious Forbes
Five-Star rating. It has achieved
this for three consecutive years
(2017, 2018, 2019)
WINNER TAA AWARDS
FOR EXCELLENCE 2019
Best Deluxe Hotel
(The Darling Sydney)
Best Innovation Project
(Single-Use Plastics)
Tourism Accommodation
Australia (NSW)
WINNER
Best Deluxe Accommodation
(The Darling Gold Coast)
Best Redeveloped
Accommodation - Hotel / Resort
(The Star Gold Coast)
SILVER EMPLOYER
‘Pride in Diversity’
Australian Workplace Equality
Index for LGBTI Inclusion
AWARDED ROBECOSAM
SUSTAINABILITY AWARD
GOLD CLASS 2019
(Dow Jones Sustainability
Index assessment)
CONSTITUENT
The Star Entertainment Group
remains a constituent of the
FTSE4Good Index
#1 ‘GLOBAL LEADER’
CASINO AND GAMING INDUSTRY
Dow Jones Sustainability Index assessment (2016, 2017, 2018)
ANNUAL REPORT 2019 6
CHAIRMAN’S MESSAGE
I am pleased to report to shareholders again this year, that the 2019 financial
year saw The Star Entertainment Group’s portfolio of high-quality tourism,
entertainment and gaming assets continue to expand in our attractive
local destinations of Sydney, the Gold Coast and Brisbane. This continued
expansion was coupled with strong domestic results and a reset of the
organisational structure to ready the Group for the next stage of its growth
and development.
The strong performance of the
domestic business, coupled with
the increase in International VIP
business visitors, is a testament to
the investment being made in our
properties and positioning to
capitalise on opportunities within
both domestic and international
tourism markets.
The Star’s growth strategy
continues to be supported by the
development of The Star’s strategic
alliance with our Hong Kong-based
joint venture partners, Chow Tai
Fook Enterprises (CTF) and Far
East Consortium (FEC), announced
last year. The 2019 financial year
marked five years of this valued
partnership with CTF and FEC - the
$3.6 billion Queen’s Wharf
Brisbane bid being the vehicle that
created the initial joint venture
partnership. In the 2019 calendar
year, we are looking forward to
delivery of the first of the new
public spaces within the Queen’s
Wharf Brisbane development,
including the Mangrove Walk and
Waterline Park.
Pleasingly, the depth of this
partnership continues to develop,
with pursuit of marketing
opportunities through the strategic
alliance and the ongoing
development projects, including
construction underway on the
Dorsett hotel and residential tower
within the Gold Coast masterplan,
and pre-sales commenced for the
residential component of the
second tower, which is to include
another five-star hotel.
The value of existing assets and
proposed investment in
Queensland by The Star and its
partners, CTF and FEC, underline
our commitment to continue as a
leading tourism infrastructure
investor for the State.
The 2019 financial year results
were in line with the earnings
guidance provided in June 2019.
Pleasing growth in domestic
earnings was offset by softer
International VIP Rebate business
results, which were impacted by
market conditions, although visitor
numbers were up.
Statutory NPAT for the Group was
$198 million, up 33.7% on the prior
year (after significant items).
Statutory earnings before interest,
tax, depreciation and amortisation
(EBITDA) increased 14.1% on last
financial year to $553 million
(before significant items). Statutory
results were supported by an actual
THE STAR ENTERTAINMENT GROUP win rate of 1.38% in the
International VIP Rebate business
as compared with 1.16% in
FY2018.
In normalised terms, at a win rate
of 1.35%, the full year normalised
NPAT result was $224 million (after
equity accounted investments, but
before significant items), down
8.4% on FY2018 and normalised
EBITDA was down 2.0% to $557
million (before significant items).
In light of the business
performance overall, and the
strength of the Company’s balance
sheet, the Board declared a final
dividend of 10 cents per share
(fully franked), taking total
dividends for the year to 20.5 cents
per share (fully franked). This total
dividend amount is in line with
FY2018 and reflects a payout ratio
of 84% of normalised NPAT.
The Board has confidence that the
organisational changes and cost
management measures
implemented in 2HFY2019 will
position the Group to continue to
deliver high-quality results in the
context of softening macro-
economic environment and some
challenging market conditions,
both domestically and
internationally.
With the Board’s full support, in
2019 Managing Director and Chief
Executive Officer, Matt Bekier, led
an organisational structure reset,
including changes to the executive
management team. These
changes will support the
company’s further transition over
the coming years, in both a
practical and an attitudinal sense,
from development to readiness to
deliver and operate extensive new
assets in New South Wales and
Queensland.
7
STATUTORY NPAT
INCREASED BY
33.7% TO $198
MILLION
STATUTORY
EBITDA
INCREASED BY
14.1% TO $553
MILLION
MAINTAINED
RECORD FULL
YEAR DIVIDEND
20.5C
The reset structure, under Matt
Bekier’s leadership, provides
confidence that the company is
well positioned to continue to
deliver against the rising
expectations of external
stakeholders, including guests,
investors, regulatory authorities
and the broader community, in
relation to the sustainable and
socially responsible delivery of
services within our industry. The
Board and management remain
cognisant of the need for ongoing
focus and vigilance as a hallmark
of success.
On behalf of the Board, I
congratulate and thank Matt Bekier
and the management team on their
dedication to making The Star
Entertainment Group Australia’s
leading integrated resort company
and returning value to
shareholders.
I also thank my fellow directors on
the Company’s well-established
Board of Directors for their ongoing
commitment.
I extend a warm invitation to all
shareholders to join me and my
fellow directors at the 2019 Annual
General Meeting, which is being
held in Brisbane for the first time as
we prepare to deliver the first stages
of public realm areas within the
Queen’s Wharf Brisbane precinct.
Thank you to all shareholders for
your support for the Company’s
vision and strategy to be
Australia’s leading integrated
resort company.
John O’Neill AO
Chairman
To watch the
Chairman’s message
scan this code with
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ANNUAL REPORT 2019
8
CEO’S MESSAGE
The 2019 financial year was a period of consolidation and executing on
a significant capital works program. Aligned to our vision of becoming
Australia’s leading integrated resort company, transformational projects
across the Gold Coast, Brisbane and Sydney developed momentum as we
welcomed more than 21 million guests to our properties. This growth
strategy continued during a softening economic environment.
At The Star Gold Coast,
construction commenced on a
53-storey mixed use tower that will
herald the entry to Australia of the
internationally-acclaimed Dorsett
hotel brand. The $400 million tower
will deliver a third hotel to the
property, alongside The Star Grand
and The Darling.
There was a further significant
development on the Gold Coast.
The State Government approved in
November 2018 a $2 billion-plus
masterplan. This allows The Star
Entertainment Group and our
partners, Chow Tai Fook and
Far East Consortium, to develop an
additional four towers.
During FY2019, the excavation
stage of the Queen’s Wharf
Brisbane project progressed to plan.
At the same time, the shell, core
and façade contract for the
integrated resort development was
awarded to Multiplex. This
continues to de-risk the
development with 60% of project
costs completed or under lump sum
contract in line with budget. Around
28% of additional project costs are
expected to be contracted by the
end of FY2020.
In Sydney, an application to the
NSW Department of Planning for a
development of state significance at
Pyrmont was submitted during
FY2019. The application includes a
tower to house the return of
The Ritz-Carlton hotel brand to
Sydney. At the time of writing, the
Independent Planning Commission
was deliberating on the proposal.
There was significant progress
elsewhere. The Star Lobby was
completed and the new Grand
Foyer opened with an art, light and
water installation as its showpiece.
The Star also broke new ground in
establishing an off-property dining
experience.
The Japanese-Chinese fusion
restaurant Chuuka opened in June.
The Sovereign Resort upgrade also
progressed to plan. Completion is
scheduled for the final quarter of
FY2020. A transitional Sovereign
experience proved successful
during FY2019, driving positive
guest feedback.
OPERATING PERFORMANCE
The 2019 financial year returned
record domestic gaming results.
Solid increases in domestic revenue
were underpinned by market share
gains at the Gold Coast and Brisbane
and growth in Sydney across both
slots and tables. Domestic Private
Gaming Rooms were the highlight
in Sydney, up 12.4%, to compensate
for a Main Gaming Floor affected
by capital works. The effective
commissioning of new assets and
operational improvements provided
further stimulus, particularly at
the Gold Coast.
THE STAR ENTERTAINMENT GROUP 9
The International VIP Rebate
business produced mixed results.
An impressive sales performance
which delivered 10% growth in
unique visitation on pcp was offset
by a lower spend per customer.
When macro market conditions
improve, we are confident this
ongoing increase in unique patrons
will drive a return to earnings growth
from this segment. Turnover was
down 30.7% on pcp to $42.4 billion,
with front money decreasing 7.1% on
pcp and unusually low turns of 9.6
creating a further negative impact.
Normalised International VIP Rebate
business revenue was down 30.7%
on pcp, while statutory International
VIP Rebate business revenue
declined at a lower rate of 17.6% due
to a higher comparable win rate.
For the past three years the Group
has executed on a diversification
strategy across the International VIP
Rebate business. The aim has been
to drive ongoing growth in non-North
Asian source markets and the
Premium Mass business.
International Premium Mass turnover
in FY2019 grew 19% on pcp.
Operating costs were flat for
FY2019. Increased domestic
volumes and higher wages were
offset by lower international gaming
volumes.
We also introduced Centres of
Excellence in Gaming and
Marketing to streamline operations
and further improve decision
making. It will ensure our business
is more efficient, more agile and
better focussed on delivering
outstanding guest service.
TEAM AND COMMUNITY
destinations. We also remain focussed
on delivering guest service excellence.
There were several initiatives to
celebrate in FY2019 that showcased
our commitment to tourism,
sustainability and the cities in which
we operate. These included:
• Committing to an exclusive
Aboriginal native bee honey
production business on
Minjerribah (North Stradbroke
Island), working alongside the
Quandamooka Yoolooburrabee
Aboriginal Corporation
• Recognition for the third
consecutive year as the Global
Leader in the Casino & Gaming
category of the Dow Jones
Sustainability Index
• Removing more than 7.5 million
plastic straws per year as part of
a single-use plastic reduction
commitment
• Having more than 100
apprentice chefs enrolled in
The Star Culinary Institute
• Achieving ‘Silver Employer’
status in the Australian
Workplace Equality Index
• Continuing to host the ARIA
Awards and AACTA Awards
in Sydney
• Hosting the TV WEEK Logie
Awards for the second time at
The Star Gold Coast
• Becoming the Naming Rights
Partner for the Gold Coast Magic
Millions Carnival and Raceday
• An ongoing partnership with
the Sydney Gay and Lesbian
Mardi Gras
• Celebrating International
Women’s Day with the ‘Walk and
Talk for Women in Leadership’.
The Star Entertainment Group will
significantly expand its workforce on
completion of the projects that will
embed our properties as world-class
tourism and entertainment
CAPITAL EXPENDITURE AND
PRIORITIES
The Star Entertainment Group
incurred capital expenditure of
$320 million in FY2019, down $157
million on the previous financial
year. Key capex projects included
the Oasis Private Gaming Room at
the Gold Coast and the Sydney
Sovereign Resort, with the latter still
under construction.
The Star Entertainment Group has
the following priorities for 2020
financial year:
• Execute on the Centre of
Excellence operating model
• Deliver on the investment
strategy
• Manage the competitive
environment
• Improve capital efficiency,
I would like to extend my gratitude
to the Board and management for
their continued support during
FY2019. Sincere thanks are also
extended to the committed and
enthusiastic team members whose
efforts have been instrumental in
our ongoing growth.
Our vision is to become Australia’s
leading integrated resort company.
To do that, we also need to deliver
thrilling experiences to those who
visit us. So, to the millions of guests
who did come to our properties this
past financial year, we hope you
enjoyed the changes we have made
and will return to be part of an
ongoing transformation.
Matt Bekier
Managing Director and
Chief Executive Officer
To watch the
CEO’s message
scan this code with
your smartphone
ANNUAL REPORT 2019
10
BOARD OF DIRECTORS
JOHN O’NEILL AO | Chairman and 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, as well as a Director
of Tabcorp Holdings 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, as well as a Director of Rugby World Cup Limited.
Mr O’Neill is currently Chairman of Queensland Airports Limited. Mr O’Neill also chairs the Bates Smart
Advisory Board and is a member of the Advisory Council of China Matters.
MATT BEKIER | Managing Director and Chief Executive Officer
Master of Economics and Commerce; PhD in Finance
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.
Matt Bekier is a member of the Board of the Australasian Gaming Council.
GERARD BRADLEY | Non-Executive Director
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.
BEN HEAP | Non-Executive Director
Bachelor of Commerce (Finance); Bachelor of Science (Mathematics)
Ben Heap has wide-ranging experience in asset and capital management as well as technology and
digital businesses. He has extensive business strategy, innovation, investment and governance expertise.
Mr Heap is a Founding Partner of H2 Ventures, a venture capital investment firm and a Director of its
related private companies. He is a Non-Executive Director of Colonial First State Investments Limited (a
subsidiary of the Commonwealth Bank of Australia), the Vice President of Gymnastics Australia and a
member of the Australian Commonwealth Government’s Fintech Advisory Group.
Mr Heap was previously Managing Director for UBS Global Asset Management in Australasia and
prior to this, Head of Infrastructure for UBS Global Asset Management in the Americas. He held a
number of directorships associated with these roles. Earlier in his career, Mr Heap was Group Executive,
E-Commerce & Corporate Development for TAB Limited.
THE STAR ENTERTAINMENT GROUP 11
KATIE LAHEY AM | 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 Chairman Australasia of Korn Ferry International and a Director of Carnival
Corporation & plc.
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.
SALLY PITKIN | Non-Executive Director
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 Lead Independent and Deputy Chairman of Adelaide Brighton Limited
and a member of the Council of the University of Wollongong.
Mr Todorcevski is also a Non-Executive Director of Coles Group Limited.
ANNUAL REPORT 2019 12
EXECUTIVE TEAM
In the 2019 financial year, The Star Entertainment Group undertook a reorganisation
to further enhance guest service and deliver ongoing cost benefits.
As a result, the Group developed ‘centres of excellence’ across its Gaming and
Marketing divisions while a third, Hospitality and Tourism, is being established to
enable the Group to improve capability, processes and decision-making in these areas.
MATT BEKIER | Chief Executive Officer and Managing Director
As CEO of The Star Entertainment Group, Matt has guided the organisation and each of its properties through
a period significant change and transformation including winning the tender for the $3.6 billion Queen’s Wharf
Brisbane development, refurbishment and expansion of The Star Gold Coast – including two luxury hotels and
approved $2 billion master plan and embedding The Star Sydney as the city’s premier tourism, dining and
entertainment destination.
With a focus on domestic and international tourism to the cities and communities in which we operate, Matt is
driving The Star Entertainment Group’s vision of becoming Australia’s leading integrated resort.
HARRY THEODORE | Chief Commercial Officer
Harry joined The Star Entertainment Group in 2011 as Head of Strategy and Investor Relations and was appointed to
the role of Chief Commercial Officer in October 2018. He led the Queen’s Wharf Brisbane bid and leads the Group’s
joint venture partnerships with Chow Tai Fook and Far East Consortium in addition to a number of other commercial
and finance functions.
From November 2019, Harry will be responsible for the finance, strategy, investor relations and IT functions as the
Group’s Chief Financial Officer.
Prior to joining The Star Entertainment Group, Harry held the role of Director – Head of Gaming and Food & Beverage
in the equities research team at the Royal Bank of Scotland and prior to that was a lawyer with Allens Arthur Robinson.
PAULA MARTIN | Chief Legal & Risk Officer and Company Secretary
Paula has over 14 years’ experience in the gaming industry, first with Tabcorp Ltd and continuing with The Star
Entertainment Group.
Following consolidation of the legal, risk, regulatory and compliance functions, Paula was appointed to the role
of Chief Legal & Risk Officer in August 2019.
She has a broad commercial law and regulatory background, having first practiced with King & Wood
Mallesons in the telecommunications, information technology and competition law areas.
GREG HAWKINS | Chief Casino Officer
Greg was appointed to Chief Casino Officer at The Star Entertainment Group in January 2019. Prior to
commencing this role, he was Managing Director of The Star Sydney for over four years.
He has over 22 years’ experience spanning the Australian, Asian and New Zealand gaming markets. Having
managed both a premium VIP hotel and casino and a large-scale integrated resort, Greg provides valuable
insight into the Asian VIP and premium mass market sectors.
THE STAR ENTERTAINMENT GROUP 13
GEOFF HOGG | Group Executive Operations
Geoff has more than 20 years of operational casino experience at a senior executive level. He has group-
wide responsibility for operations at The Star Sydney, The Star Gold Coast, The Gold Coast Convention &
Exhibition Centre and Treasury Brisbane.
Prior to commencing this role in July 2019, Geoff was Managing Director Queensland for The Star
Entertainment Group for over 10 years.
Geoff is an active participant in the Queensland business community and in particular, the tourism and
entertainment industry. He is a member of the Responsible Gambling Advisory Committee, a director on the
National Retail Association, and a governor of the American Chamber of Commerce Queensland Council.
Geoff was recently appointed as a director on the Major Events Gold Coast Board.
GEORGE HUGHES | Chief Marketing Officer
George joined The Star Entertainment Group in 2017 and is responsible for its marketing activities.
He joined from David Jones where he was responsible for direct and digital marketing, customer insights,
loyalty and customer relationship management.
Since his appointment, George has unified the marketing team and sought to drive brand growth nationally.
He has transformed business unit and brought together specialist, functional expertise and talent both
existing within the team as well as that available outside the business and from a variety of sectors.
George is a passionate customer engagement professional with strong commercial and strategic acumen.
He has wealth of executive experience in diverse roles across marketing, customer engagement, finance,
M&A and strategy, gained in the retail, entertainment, postal and banking sectors.
KIM LEE | Chief People and Performance Officer
Kim Lee commenced at The Star Entertainment Group in 2015 and brings with her more than 18 years’
experience in human resource roles across various sectors.
To facilitate The Star Entertainment Group’s expansion across its three properties and significant increase
in its workforce, Kim has led the People and Performance team to ensure those plans are matched with
highly capable leaders and teams which deliver superior customer service outcomes.
Through Kim’s leadership and advocacy, The Star Entertainment Group has become a more diverse and
inclusive environment. The Group has set targets across four key area: gender, multicultural, LGBTI and
age and tracks its performance against internal and external benchmarks. Kim personally champions
gender issues via her association with and directorship on Women in Gaming and Hospitality, a not for
profit organisation aiming to identify and remove barriers for the advancement of women in the gaming,
hospitality and gaming related industries.
ALISON SMITH | Group Executive External Affairs
Alison has been with The Star Entertainment Group since mid-2015. Her role covers government, industry
and media relations, plus internal communications for the Group.
In addition to her role with The Star, Alison is a director on the Brisbane Festival board; an executive
committee member of The Committee for Brisbane; Vice President of the Queensland Futures Institute
Corporate Affairs Council, a member of the Qld Advisory Board for the Accommodation Association of
Australia, and a member of the American Chamber of Commerce Qld Tourism Committee.
Prior to joining The Star Entertainment Group, Aliso worked in the public and private sectors in ICT,
transport, energy, police and corrective services. In 2014 she was the project manager of Queensland’s
international marketing campaign for the G20 Leaders’ Summit in Brisbane.
ANNUAL REPORT 2019 14
FY2019 GROUP PERFORMANCE
Three Year Statutory Financial Results Summary1
REPORTED RESULTS
Gross Revenue
Net Revenue3
EBITDA
EBIT
Significant Items (after tax)
NPAT (before significant items)
Earnings Per Share
Full Year Dividend
FY17
$m
2,432.2
2,110.0
599.7
435.2
8.9
273.3
$m
2,579.5
2,084.0
484.4
297.2
36.7
184.8
32.0 cents
17.5 cents
16.0 cents
20.5 cents
FY18
FY19
% vs pcp2
$m
% vs pcp
↑ 6.1
↓ 1.2
↓ 19.2
↓ 31.7
↑ 312.4
↓ 32.4
↓ 45.3
↑ 28.1
2,514.0
2,158.1
552.8
347.0
18.4
216.4
21.6 cents
↓ 2.5
↑ 3.6
↑ 14.1
↑ 16.8
↑ 49.9
↑ 17.1
↑ 23.4
20.5 cents
-
GROUP PERFORMANCE HIGHLIGHTS
• Increased statutory net revenue and earnings
• Total FY2019 dividends of 20.5 cents per share, unchanged from FY2018 record levels
• Continued effective execution of growth strategy.
Gross Revenue
Net Revenue
EBITDA
NPAT
SOLID DOMESTIC BUSINESS OFFSET BY VIP
• Domestic EBITDA up 5.4% on pcp with margin
expansion, represents 88% of Group EBITDA
• Slots share gains in Brisbane and Gold Coast,
consolidation in Sydney.
• Tables revenue up 4.0% on pcp (PGR5 up 9.1%
on pcp)
• VIP turnover impacted by market conditions.
Unique VIP customers up 10% on pcp to record
levels, offset by lower spend per visit
NORMALISED4
STATUTORY
$m
2,500.9
2,160.5
556.5
223.7
% vs pcp
$m
% vs pcp
↓ 7.2
↓ 0.9
↓ 2.0
↓ 8.4
2,514.0
2,158.1
552.8
198.0
↓ 2.5
↑ 3.6
↑ 14.1
↑ 33.7
RECORD DIVIDEND PAYMENT MAINTAINED
IN FY2019
• Final dividend of 10.0 cents per share fully franked
• Total FY2019 dividends of 20.5 cents per share
fully franked
• Total dividends unchanged from FY2018 record
levels, reflecting confidence in the business and
balance sheet strength.
RESTRUCTURE BENEFITS UNDERWAY
• Approximately $45 million annualised cost benefits
from restructuring by 31 December 2019
• Customer and employee risk management in place.
THE STAR ENTERTAINMENT GROUP
15
CAPITAL PLANS ON SCHEDULE AND DE-RISKED
CAPITAL EFFICIENCY IMPROVED
• Queen’s Wharf Brisbane – approximately 60% under
lump-sum contract, further approximately 28% by
end FY2020
• Growth strategy through capital-efficient investments with
partners progressed – Queen’s Wharf Brisbane,
Gold Coast masterplan, Sydney
• The Star Gold Coast – construction of first joint venture
tower has commenced, second joint venture tower
in pre-sales stage
• Capital expenditure optimised for returns. FY2020-
21 plans reduced by approximately $125 million
(excluding joint venture contributions).
• The Star Sydney – Sovereign Resort expansion and
upgrade to complete in 4Q FY2020.
PROPERTY PERFORMANCE HIGHLIGHTS
SYDNEY
Gross Revenue
Net Revenue
EBITDA
NORMALISED
STATUTORY
$m
1,631.4
1,374.5
367.4
% vs pcp
$m
% vs pcp
↓ 13.0
↓ 4.0
↓ 5.7
1,567.8
1,308.3
307.6
↓ 9.7
↓ 0.5
↑ 7.6
• Domestic growth offset by declines in VIP impacted by market conditions
• Domestic revenue up 3.1% on pcp, domestic EBITDA up 5.0% on pcp
• Slots revenue up 3.4% on pcp (PGR up 9.4% on pcp), consolidating market share
• Tables revenue up 4.0% (PGR up 8.6% on pcp)
• International VIP Rebate business performance affected by market conditions.
Unique VIP customers down 2%, spend per visitor declined, turnover down 39.7% on pcp.
QUEENSLAND
Gross Revenue
Net Revenue
EBITDA
NORMALISED
STATUTORY
$m
869.5
786.0
189.1
% vs pcp
$m
% vs pcp
↑ 6.0
↑ 5.2
↑ 5.9
946.2
849.8
245.2
↑ 12.3
↑ 10.5
↑ 23.5
• Continued growth – normalised and statutory net revenue and EBITDA
• All segments contributed to growth. Gold Coast ramp up continuing
• Slots market share increased at both Treasury Brisbane and The Star Gold Coast
• Tables revenue up 3.9%
• New facilities drive International VIP Rebate business performance. Unique VIP customers up over 100%,
turnover up 23.5% on pcp.
1 For further information, please refer to the financial report contained in the Annual Report for the relevant financial year.
2 Prior comparable period.
3 Net of player rebates and promotional allowances following the adoption of AASB 15 from 1 July 2018. FY2017 comparable have also been restated.
4 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% on actual turnover, taxes and revenue share commissions, unless otherwise stated, and
are before significant items. Normalising for revenue share commissions commenced in 1H FY2019. Normalising for revenue share commissions results in
an increase in commissions of $20 million in FY2018.
5 Private Gaming Room.
ANNUAL REPORT 2019
16
KEY PROJECTS
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 of the
$3.6 billion Queen’s Wharf Brisbane development, which will cover more
than 26 hectares across land and water, transforming Brisbane into a globally
recognised destination by 2022.
Over the 2019 financial year, the
transformational Queen’s Wharf
Brisbane development reached
significant milestones.
These included:
• Major construction planning
commenced for the Rosewood
hotel, the Dorsett hotel and a
double-tower The Star-branded
hotel to be located beneath an
iconic public Sky Deck
• Excavation works progressed
throughout the year, on track to
be completed in early FY2020
• The awarding of contractor
status to Multiplex for major
construction including:
° shell and core works
covering the basement,
base services, tower
structures and the façade of
the main integrated resort
° four high-rise tower shells in
the integrated resort to be
ready for later fit-out works
° podium level to be nestled
between the towers
° an iconic Sky Deck that
will sit 100 metres above
street level
° five levels of basement
carpark
° back of house facilities
including kitchen, laundry,
staff cafeteria, amenities
and central energy plant.
• Works commenced on
foundations at the base of the
development, enabling the
build of the basement which
will feature thousands of car
parks for the precinct, with
construction works expected
to reach George Street level
in late-2020
• The transformation of
Brisbane’s riverfront opposite
South Bank, which commenced
with the creation of a vibrant
new public space comprising a
450 metre above-water
pedestrian Mangrove Walk and
a new public recreational area
called Waterline Park – well
underway, with completion due
in the second half of the 2019
calendar year.
Main construction works have
commenced, with the erection of
10 new tower cranes scheduled
across the second half of the 2019
calendar year marking the
transition from excavation to
construction and will continue
throughout the 2020 calendar year.
The 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.
THE STAR ENTERTAINMENT GROUP 17
© Destination Brisbane Consortium.
All rights reserved. Artist impression only.
Subject to planning approvals.
THE QUEEN’S WHARF BRISBANE DEVELOPMENT INCLUDES A RANGE OF
TOURISM, INFRASTRUCTURE AND RESIDENTIAL DEVELOPMENTS
50
new bars and
restaurants
4 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
HERITAGE
BUILDINGS
Restored and repurposed
PUBLIC SPACE
The equivalent of 12
football fields in size
NEVILLE
BONNER
BRIDGE
connecting South Bank
to the Brisbane CBD
WORLD-CLASS
GAMING
FACILITIES
(to replace Brisbane’s existing
Treasury casino) which will
comprise less than 5% of the
development footprint
2,000
apartments
SKY DECK
More than 100 metres above
William Street
The Queen’s Wharf Brisbane 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.
ANNUAL REPORT 2019 18
THE STAR GOLD COAST
The Star Gold Coast’s transformation has positioned the property as a world-
class integrated resort and the region’s premier entertainment and tourism
destination.
© Destination Gold Coast Consortium.
The Star Gold Coast Master Plan.
Artist impression only.
The 2019 financial year saw the
delivery, as well as commencement
of various key projects at The Star
Gold Coast, including:
• The launch of the Gold
Coast’s ultimate buffet
experience, Harvest Buffet,
with poolside views, stunning
indoor and outdoor spaces
and private dining
• The opening of the new Oasis
premium gaming experiences
at The Star Gold Coast
• The commencement of the
main gaming floor upgrade and
expansion works, with
expected completion in the
second half of the 2019
calendar year.
With these projects delivered and
underway, the next phase of the
redevelopment and expansion is
advancing with the construction of
the Dorsett hotel and apartments
tower by Destination Gold Coast
Consortium (DGCC) progressing
on site, with expected completion
in the 2022 financial year.
THE STAR ENTERTAINMENT GROUP 19
The 700+ key hotel and apartment
tower, being delivered by DGCC,
is a joint venture development
comprising The Star Entertainment
Group and its Hong Kong-based
partners, Chow Tai Fook
Enterprises Limited and Far East
Consortium International Limited.
On 2 November 2018, The Star
Entertainment Group, together
with our partners welcomed the
Queensland Government’s
approval of our broader master
plan concept and future vision for
The Star Gold Coast. The master
plan would see an additional
$2 billion tourism investment at
The Star Gold Coast and deliver
a further four towers and
associated resort facilities on
Broadbeach Island such as new
restaurants and bars, and
increased entertainment
and retail.
Following this approval, the
Group and its partners have
launched the second stage of
The Star Residences, Epsilon.
Subject to pre-sales, Epsilon will
feature a soaring 63-storey
mixed-use tower incorporating
457 residential apartments, and a
200+ suite 5-star hotel with an
exceptional retail offering of
fine-dining, gourmet delis, cafes
and wine bars.
(L-R) John O’Neill AO, The Star Entertainment Group Chairman; Annastacia
Palaszczuk, Queensland Premier; Matt Bekier, The Star Entertainment Group CEO.
ANNUAL REPORT 2019 20
THE STAR SYDNEY
The Star Sydney, one of Sydney’s most awarded and luxurious entertainment
and tourism destinations, has seen further enhancements and premium
product offering unveiled throughout the year.
In the 2019 financial year,
The Star Sydney commenced
or delivered many key projects,
including:
• The relocation and opening of
the interim Sovereign Room
and the Chairman’s premium
gaming areas, enabling the
redevelopment of the current
location into Sydney’s best
private gaming and
entertainment venue,
Sovereign Resort
• Launch of Flying Fish,
The Star Sydney’s seafood
restaurant and bar overlooking
Sydney harbour
• Rebranding of the Astral Tower
and Residences to The Star
Grand and Residences,
aligning our product offering
across Sydney, the Gold Coast
and eventually Brisbane upon
the opening of Queen’s Wharf
Brisbane
• Completion of the new
The Star Grand Lobby and
Porte-Cochère redevelopment
• Launch of G&Tea, a bar and
tea house located in The Star
Grand Lobby
• Launch of Jade Rabbit, the
new feature-bar on the main
gaming floor
• The unveiling of the new Grand
Foyer showcasing the world’s
first permanent indoor light and
interactive digital art foyer in an
integrated resort
• Commencement and
completion of CHUUKA, The
Star Sydney’s newest signature
restaurant and first off-property
establishment, located at Jones
Bay Wharf. CHUUKA opened
in early July 2019.
With these projects at The Star
Sydney fully delivered, the next
phase of redevelopment and
expansion is advancing with the
following works program:
• The advancement of Sydney’s
best private gaming room and
entertainment venue,
Sovereign Resort, expected to
be delivered towards the end of
the 2020 financial year
• The opening of the new Oasis
and Vantage premium gaming
experiences, with the launch
expected to coincide with the
launch of the new Sovereign
Resort.
The Star Entertainment Group
continued to progress additional
proposed development works with
its joint venture partners, Chow
Tai Fook Enterprises Limited and
Far East Consortium International
Limited.
The proposed development works
at The Star Sydney features:
• 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.
At the time of writing, the
Independent Planning
Commission was deliberating on
the proposal.
THE STAR ENTERTAINMENT GROUP 21
CHUUKA, Jones Bay Wharf.
The Star Sydney’s ‘Grand Foyer’ entrance.
ANNUAL REPORT 2019 22
SUSTAINABILITY
HIGHLIGHTS
7.5 MILLION+
plastic straws per year removed
through the launch of the
Group’s Single-Use Plastic
Reduction Commitment
SILVER
EMPLOYER
Australian Workplace
Equality Index
ACHIEVED
Green Star Performance Rating
at The Star Sydney
OBTAINED
limited assurance from EY over
the Group’s carbon emissions
and energy data
FINALIST
Hotel Management Awards
Environmental Program
RELEASED
the Group’s first Global Reporting
Initiative ‘core’ compliant report
ACHIEVED
a 5 Star NABERS Tenancy rating
for the newly refurbished
Sydney corporate office at
60 Union Street, Pyrmont,
New South Wales
‘GLOBAL
LEADER’
of the Casino & Gaming
category Dow Jones
Sustainability Index
2016, 2017, 2018
100+
apprentice chefs enrolled in
The Star Culinary Institute
FINALIST
City of Sydney CitySwitch
Awards, NSW Signatory of
the Year over 2,000 square
metre category
9,000+ BARS
of soap made from recycling
hotel soaps through Soap Aid
13,600+
KILOGRAMS
of food donated to Oz Harvest
creating over 4,100 meals
OVER $35,000
raised for OzHarvest’s
CEO Cookout
21 MILLION+
visitors welcomed across
our three properties
BEST
INNOVATION
PROJECT
WINNER
Tourism Accommodation
Australia (NSW)
The Darling Sydney
THE STAR ENTERTAINMENT GROUP
23
SUSTAINABILITY STRATEGY
The Star Entertainment Group develops and operates world class, liveable,
environmentally sustainable and resilient integrated resorts and precincts.
The Star Entertainment Group
has lifted performance and
standards across its sustainability
portfolio in the 2019 financial
year. The Group’s commitment to
sustainability continues to focus
on creating long term value in the
management of environmental,
social and governance (ESG)
risks and opportunities, and
increasing performance and
disclosures year on year. In the
2019 financial year, the Group’s
Sustainability Strategy ‘Our
Bright Future’ was expanded to
align with the business priorities
and plans and remains focused
on material issues that are
reaffirmed annually through our
rigorous materiality assessment
process.
MATERIALITY
Our Sustainability Strategy is
underpinned by a structured
materiality assessment process.
The annual materiality assessment
identifies the Group’s key
emerging and operational ESG
issues and seeks to respond to
these as part of the Sustainability
Strategy’s key priorities. In line
with a series of standards,
material ESG issues relevant to
our business and industry are
identified, prioritised and
responded to accordingly through
policy, process, targets and within
our reporting. Material issues
have been mapped to the United
Nations Sustainable Development
Goals which have also been
addressed within the
Sustainability Strategy. Each year
our materiality assessment
process is conducted to ensure
material issues remain relevant
and current. The material issues
matrix demonstrates the
relevance of these material issues
to our business and stakeholders.
MATERIALITY MATRIX
The following Materiality Matrix outlines our significant issues assessed by their ‘Importance to The Star’ and
‘Importance to external stakeholders’. All issues have been classified as ‘Emerging/Strategic’ or ‘Ongoing/Operational’.
S
R
E
D
L
O
H
E
K
A
T
S
O
T
E
C
N
A
T
R
O
P
M
I
Most Material Issues
Community wellbeing
and trust~
Responsible gaming~
Privacy and
security^
Ethical Business
Operation~
Guess safety &
security~
Employee health,
safety & wellbeing~
Climate resilience^
Sustainable precincts^
Healthy environments~
Sustainable and
ethical supply chain^
Minimising environmental
impacts~
Sustainable business
performance^
Employee engagement
and development~
ESG transparency~
Diversity inclusion
and equal opportunity~
IMPORTANCE TO THE STAR
LEADING
COMPANY
GUEST
WELLBEING
WORLD CLASS
PROPERTIES
TALENTED
TEAMS
^
EMERGING/
STRATEGIC
~
ONGOING/
OPERATIONAL
ANNUAL REPORT 2019
24
OUR APPROACH
The Materiality approach adhered to
the requirements of the following:
(i) Global Reporting Initiative (GRI);
(ii) AccountAbility AA1000
Materiality Principle and Assurance
Standard International;
(iii) the integrated Reporting Council
Framework; and
(iv) consider the United Nations
Sustainable Development Goals
(SDGs).
The SDGs capture global
sustainable development priorities
and demonstrate where corporations
can have an impact on global
environmental and social issues.
MATERIAL ISSUE
UNITED NATIONS SUSTAINABLE
DEVELOPMENT GOALS
LEADING
COMPANY
WORLD CLASS
PROPERTIES
GUEST
WELLBEING
TALENTED
TEAMS
Ethical business
operation
Community
well-being and trust
Privacy and security
Sustainable and
ethical supply chain
ESG transparency
Sustainable Business
Performance
9
16
16
9, 12, 17
9
8
Climate resilience
6, 7, 13, 14, 15
Minimising
environmental
impacts through
operating efficiently
6, 7, 13, 14, 15
Sustainable
precincts
Responsible
gaming
Safety and
security
Healthy
environments
11
3, 11
3
3
Diversity, inclusion
and equal
opportunity
5, 8, 10
Employee engagement
and development
8, 4
Employee health,
safety and
well-being
3, 8
1
NO
POVERTY
2
ZERO
HUNGER
3
GOOD
HEALTH AND
WELLBEING
4
QUALITY
EDUCATION
5
GENDER
EQUALITY
6
CLEAN
WATER AND
SANITATION
7
AFFORDABLE
AND CLEAN
ENERGY
8
DECENT
WORK AND
ECONOMIC
GROWTH
9
INDUSTRY,
INNOVATION AND
INFRASTRUCTURE
10
REDUCED
INEQUALITIES
11
SUSTAINABLE
CITIES AND
COMMUNITIES
12
RESPONSIBLE
CONSUMPTION
AND PRODUCTION
13
CLIMATE
ACTION
14
LIFE BELOW
WATER
15
LIFE ON LAND
16
PEACE, JUSTICE
AND STRONG
INSTITUTIONS
17
PARTNERSHIPS
FOR THE GOALS
THE STAR ENTERTAINMENT GROUP
25
The Star Entertainment Group’s
Sustainability Strategy continues
to combine key priorities and
objectives in a four-pillar
framework that supports our
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
Group continues to improve
sustainability reporting and
disclosures year on year. Over the
last financial year, the Group
released its first report applying a
‘core’ level of compliance against
the Global Reporting Initiative
(GRI) and received limited
assurance from EY for the Group’s
carbon and energy data and
reporting processes.
CLIMATE CHANGE RESPONSE
The Star Entertainment Group
recognises that its properties may
be susceptible to future changes
in climate and that we have a
responsibility to reduce resource
consumption. Accordingly, we are
committed to improving the
resilience of our business
operations, our assets, and the
precincts in which our properties
are located.
We are doing this by continuing to
conduct external climate risk
assessments, managing our
carbon emissions towards meeting
our targets and continuing to
embed mitigation and adaptation
actions in the Group’s Sustainable
Design and Operational Standards
that are required to be applied to
all major projects.
The company recognises the
recommendations of the Financial
Stability Board Task Force on
Climate-related Financial
Disclosures (TCFD) and is
working to align current and new
projects to the framework. As part
of progressing this commitment, in
the 2019 financial year, the Group
conducted a gap analysis to
understand its progress to date
against the four disclosure
categories in the TCFD
recommendations. As a result of
this analysis, recommendations
were identified for future activities
to further support the
understanding and disclosure of
climate-related physical and
transition risks and opportunities
in accordance with the TCFD
recommendations.
INVESTING IN
RENEWABLE ENERGY
The Group has commenced plans
to reduce its carbon footprint
through the way we purchase
energy in addition to other
emission reduction activities. In
FY2019, a power purchase
agreement viability assessment
was completed and the company
is expecting to secure an
agreement in the 2020 financial
year to ensure a minimum of 25%
of the Group’s load is sourced
from renewable sources.
SUSTAINABILITY EDUCATION
AND ENGAGEMENT
The Group prioritised sustainability
engagement in the 2019 financial
year by increasing training,
workshops and communications.
Quarterly Sustainability Team
Leadership Workshops were
established at The Star Sydney,
Treasury Brisbane and The Star
Gold Coast, with each of the
properties’ Chief Operating
Officers in attendance to drive
business engagement, innovation
and sustainability performance
across all work streams.
Through the celebration of
domestic and international
environmental campaigns such as
National Recycling Week and
Earth Hour, the Group supported
the promotion of recycling and
raised awareness of carbon and
water reduction targets by
providing team members with face
to face education.
Sustainability performance is
monitored by the Property
Sustainability Committees and is
governed by the Group
Sustainability Steering Committee
which continues to report to the
Board’s People, Culture and
Social Responsibility Committee.
The Star Entertainment Group
became a founding partner of the
City of Sydney’s Sustainable
Destination Partnership and is
represented at the Leadership
Panel and Technical Working
Groups to work collaboratively to
increase environmental
performance and lift industry
standards in sustainability.
DELIVERING WORLD CLASS
PROPERTIES
The Group focusses on delivering
world class properties by committing
to voluntary national accreditation
programs that measure and report
on environmental performance
including Green Star and the
National Australian Built
Environment Rating System
(NABERS).
During FY2019, The Star Sydney
obtained its first Green Star
Performance Rating to assess and
benchmark the integrated resort’s
baseline operational performance.
The Star Entertainment Group’s
refurbished corporate office located
at 60 Union Street, Pyrmont, New
South Wales obtained its first 5 Star
NABERS Tenancy rating to
complement the 5 Star Green Star
Interiors Rating attained in the 2018
financial year.
ANNUAL REPORT 2019 26
Seabin Project Co-Founder & CEO and City of
Sydney Councillor Cristine Forster and team members
install Seabin at Sydney Wharf Marina.
Destination Gold Coast
Consortium (on behalf of its joint
venture partners) continued to
work towards its 5 Star Green
Star Design and As Built Green
Star Rating commitment for the
Dorsett hotel and apartments
tower, currently under
construction on Broadbeach
Island, Broadbeach, Queensland.
achieved a 6 Star Green Star
Communities rating for the
Queen’s Wharf Brisbane
development. Other commitments
include the 6 Star Green Star
Design & As Built ratings for all
new buildings, and Australian
best practice sustainability
outcomes on the repurposing of
existing heritage buildings.
Destination Brisbane Consortium
(on behalf of The Star
Entertainment Group and its joint
venture partners) continues to
focus on its commitments, having
The Queen’s Wharf Brisbane
development has progressed
significantly with its Communities
and Design and As Built Green
Star commitments by recycling
100% of the recyclable material
from the shoring and excavation
and 660,363 tonnes of the
non-recyclable material being
diverted for reuse on other
infrastructure projects around
Brisbane including the Auto Mall
site at Brisbane Airport and the
Trade Coast site.
The Star Sydney has maintained
its commitment to achieving a 5
Star Green Star Design & As
Built v1.1 rating for the proposed
The Ritz-Carlton hotel and
apartments tower.
THE STAR ENTERTAINMENT GROUP 27
THE STAR ENTERTAINMENT GROUP IS A COMMITTED
TO THE FOLLOWING GREEN STAR AND NABERS
DEVELOPMENT AND OPERATIONAL RATINGS.
Queen’s Wharf Brisbane
ACHIEVED a 6 Star Green Star Communities Rating v1
COMMITTED to achieving a 6 Star Green Star Design & As Built
rating for non–residential new buildings
COMMITTED to achieving Australian best practice sustainability
outcomes for existing heritage buildings
COMMITTED to achieving Green Star Performance ratings for
each non-residential building
+
+
+
THE DORSETT HOTEL AND APARTMENTS TOWER,
BROADBEACH ISLAND, BROADBEACH, QLD
+
COMMITTED to achieving a 5 Star Green Star Design & As Built rating
The Star Gold Coast
The Star Sydney
THE STAR ENTERTAINMENT GROUP’S SYDNEY
CORPORATE OFFICE, 60 UNION STREET, PYRMONT, NSW
ACHIEVED a 5 Star Green Star Interiors rating
ACHIEVED a 5 Star NABERS Tenancy Rating
THE STAR SYDNEY, 80 PYRMONT STREET, PYRMONT, NSW
ACHIEVED a Green Star Performance rating
THE STAR SYDNEY – PROPOSED THE RITZ-CARLTON
HOTEL AND APARTMENTS TOWER
+
COMMITTED to achieving a 5 Star Green Star Design & As Built rating
ANNUAL REPORT 2019 28
DELIVERING RESOURCE
EFFICIENCY PROJECTS
In FY2019, 13 projects were completed within the Energy and
Water Project Pipeline delivering cost benefits of $1.5 million.
The Star Entertainment Group
continues to target reductions in
resource use through the
allocation of capital and through
operational energy and water
improvement projects.
Now in its fifth year, the Group’s
‘Energy and Water Project
Pipeline’ identifies, prioritises and
measures the outcomes of energy
and water projects based on their
cost savings, and combined
energy and carbon benefit.
In the 2019 financial year, a further
13 projects were completed within
the Energy and Water Project
Pipeline delivering cost benefits of
$1.5 million against a business as
usual model. To date, the Group
has reached a milestone by
delivering 50 projects from large
scale capital upgrades to
optimisation and lighting
replacements. These 50 projects
have delivered environmental and
maintenance savings and over
$4.3 million in cost savings in the
last five financial years against a
business as usual model.
Resource consumption continues
to be measured and reported in
absolute terms and as an intensity
metric measured on a per visitor
and per square metre basis.
Measuring energy, water, carbon
and waste by intensity assists with
measuring performance with
growing visitation and an
increasing portfolio. As more
efficient buildings activate, we
expect the consumption per
square metre to decline as
buildings become more efficient
over time.
With development and
enhancement projects underway
increasing the floorspace and
scale of the property portfolio, the
Group continues to prioritise
energy efficiency through
optimisation projects, green
building ratings and sustainable
design to limit the rise in absolute
resource consumption. To support
a decrease in future resource
consumption intensity within the
portfolio, the Group continues to
set minimum standards within
The Star Entertainment Group’s
Sustainable Design and
Operational Standards (located on
the company website) for the
building and large-scale
redevelopment of assets. The
Standards specify mandatory and
voluntary requirements for
development projects across eight
material categories aligned to
Green Star and the National
Australian Built Environment
Rating System (NABERS).
The following resource saving
projects were delivered in the
2019 financial year:
• A building optimisation and
analytics system has been
implemented at The Star Gold
Coast which has led to 42
controls, tuning and
optimisation opportunities
implemented within the year,
delivering energy and cost
savings
• The Star Sydney continued with
air handling unit and fan
replacement initiatives and
completed a lighting
replacement project (replacing
LED lighting in internal
corridors, fire stairs and
The Darling carpark) which is
expected to deliver $53,000 in
cost savings annually
•The Star Gold Coast retrofitted
all existing ‘waterless’ woks
with knee levers to improve
water efficiency. These
improvements are estimated to
deliver 4,577 kilolitres in water
savings and $35,800 in cost
savings annually
• As part of water usage audits
previously conducted across
the properties in FY2018 and
ongoing testing and leak
rectification, flow management
of showers and taps and
operating practices are
continually being upgraded
or replaced.
THE STAR ENTERTAINMENT GROUP 29
ENERGY AND CARBON
EMISSIONS
The Star Entertainment Group
previously set 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 metre basis.
In the 2019 financial year, the
Group’s total emissions in carbon
dioxide equivalents (CO2-e) from
purchased gas and electricity
were 106,845 tonnes. This
footprint equates to an increase
of 1,276 tonnes from FY2018,
however an overall decrease of
1.6% from base year FY2013
which was 108,595 tonnes. On
an intensity basis, carbon
emissions remain relatively in
line with FY2018 at 0.35 tonnes
CO2-e/ per square meter and
carbon emissions per visitor at
5.69 kilograms CO2-e/ visitor for
the financial year 2019 despite a
small reduction in visitor
numbers and a reduction in
overall square metres due to
redevelopment works for the new
Sovereign Resort at The Star
Sydney. Overall carbon
emissions intensity per square
metre have reduced 15.5% from
base year FY2013 towards the
Group’s targets.
A small increase in absolute
emissions was expected due to
the opening of The Darling Gold
Coast in FY2018 which has now
operated for a full year in
FY2019 and the increase of
construction activities at The Star
Gold Coast.
The Group’s total energy
consumption from purchased gas
and electricity for the 2019
financial year was 639,726
gigajoules (GJ), which was a
2.4% increase from FY2018.
Energy consumption per visitor
increased in FY2019 by 2.6%
from 33.18 MJ/visitor in FY2018
however decreased 8.5% overall
from base year FY2013. Energy
consumption intensity per square
metre also increased over the
last financial year by 2.6% from
2.06 to 2.11, however reduced
overall by 9.6% against base year
FY2013. Energy consumption
intensity increased in FY2019
due to the increase of onsite
construction and is expected to
reduce once enhancements and
build activities conclude.
POTABLE WATER USE
The Group’s total potable water
consumption was 825,971 kL in
the 2019 financial year, an
increase of 2.5% from FY2018
and an increase of 20% from base
year 2013. On a visitor intensity
basis, the Group’s water intensity
increased from 42.78 litres per
visitor in FY2018 to 43.96 litres
per visitor in FY2019 and
increased 4.2% against base year.
CARBON EMISSIONS
ENERGY CONSUMPTION
6.65
108,595
0.42
FY13
5.61
5.69
105,569
106,845
0.35
FY18
0.35
FY19
37.22
607,476
2.34
FY13
34.05
5.69
639,726
33.18
624,729
2.06
FY18
2.11
FY19
CARBON EMISSIONS (TONNES CO2-E)
EMISSIONS INTENSITY (KG CO2-E/VISITOR)
EMISSIONS INTENSITY (TONNES CO2-E/SQM)
ENERGY CONSUMPTION (GJ)
ENERGY INTENSITY (MJ/VISITOR)
ENERGY INTENSITY (GJ/SQM)
Notes:
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, 1.6% of FY2019 utility invoices were unbilled at
the time of reporting (from water), based on cost. The missing usage has been estimated as 0.0% (12MWh) for electricity, 0.0% (122GJ) for gas.
Square metres, are square metres 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.
ANNUAL REPORT 2019 30
WATER CONSUMPTION
RECYCLING RATES
42.19
42.78
43.96
805,570
825,971
2.65
FY18
2.73
FY19
0.03
10%
0.002
FY13
688,440
2.65
FY13
WATER CONSUMPTION (KL)
WATER INTENSITY (L/VISITOR)
WATER INTENSITY (KL/SQM)
RECYCLING RATE (%)
RECYCLING RATE INTENSITY (KG/VISITOR)
RECYCLING INTENSITY (TONNES/SQM)
0.16
38%
0.16
39%
5.69
0.010
FY18
0.010
FY19
Notes:
1.6% of FY2019 utility invoices were unbilled at the time of reporting based on cost. The missing usage has been estimated as 8.15% (67ML)
for water. The FY2013 baseline for waste has been recalculated. ‘Recycling intensity’ kg/visitor has been used in FY2019 to FY2017, not ‘waste
to landfill intensity kg/visitor’ as used in FY2016, which better reflects recycling performance.
Square metres, are square metres 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.
Measuring water intensity by
square metre, consumption has
increased by 2.7% from 2.65
litres per square metre in FY2018
to 2.73 litres per square metre in
FY2019 and increased 3% from
base year FY2013.
Absolute water use was expected to
increase from base year due to the
opening of new floor space including
The Star Event Centre and
The Darling Gold Coast since
FY2013. The ongoing construction
activities onsite at The Star Gold
Coast including the building of
The Darling and the Dorsett hotel, in
addition to the ongoing refurbishment
works, have affected water intensity.
Water use remains a material issue
and efficiency projects have been
prioritised for FY2020 including
maximising recycling water
opportunities and expanding the
existing water auditing and leak
detection projects. Post
construction, water intensity is
expected to decrease.
INCREASING RECYCLING
As waste is a material issue,
The Star Entertainment Group
sets increased recycling targets
each year to lift performance and
continues to provide ongoing
employee training and education.
Waste and recycling includes all
waste from operations, with
recycling programs focusing on
organic waste diversion, and
increasing the number of recycling
streams and the percentage of
landfill diverted.
The Group has been tracking
recycling performance against a
base year of FY2013 to ensure
that improvements are
measurable, continue to divert
increased waste volumes from
landfill and promote behavioural
change across the organisation.
Across the Group’s properties,
total recycling rates have
increased from 10% diversion in
FY2013 to 39% diversion across
all operations in the 2019 financial
year. Recycling rates continue to
be measured and performance
reported monthly and annually.
The Property Sustainability
Committees have been tasked
with innovation in waste reduction
THE STAR ENTERTAINMENT GROUP 31
and process improvement.
The Star Sydney continues to
lead the individual property
performance by achieving a
recycling rate of 57% within the
year, which is an increase from
54% in financial year 2018. On
an intensity basis, recycling per
square metre in tonnes has
increased as the Group’s
recycling performance increased.
During the 2019 financial year a
number of initiatives were
introduced to achieve continuous
improvement in recycling, including:
• Launch of the Group’s
‘Single-Use Plastic Reduction
Commitment’ which targets the
removal of plastics in favour of
Forest Stewardship Council
certified wooden, cornstarch
(compostable) and
paper alternatives
• Working in partnership with
OzHarvest, The Star Gold
Coast and The Star Sydney
have redistributed 13,669
kilograms of food, contributing
to the charity’s school program
and providing the equivalent of
41,007 meals to vulnerable
communities
• The Star Sydney redistributed
4.5 tonnes of obsolete
furniture, equipment, uniforms
and hotel linen to charities in
FY2019 – resulting in a total of
17 tonnes of redistributed
items since the program began
• Multiple site audits across the
Group’s hotels, retail outlets,
restaurants and bars have
been undertaken and
specialised training was
conducted in waste
management for housekeeping,
public area and food and
beverage teams to maximise
recycling rates
• Through Soap Aid’s used soap
recycling program, the Group
has recycled 905kgs of soap,
creating 9,050 soap bars
critical to communities facing
major hygiene challenges
• The Group expanded its
Nespresso recycling program
and recycled 29,200 capsules,
an increase of 17,200 on the
last financial year
• Mei Wei at The Star Gold
Coast introduced reusable
portion containers in their
kitchen, reducing the purchase
of 300 cases of disposable lids
and containers annually.
SINGLE-USE PLASTIC REDUCTION
As part of the Group’s wider
sustainability strategy, during the
2019 financial year, The Star
Entertainment Group launched its
‘Single-Use Plastic Reduction
Commitment’ targeting the
reduction and substitution of single
use plastics items with alternatives
where they exist on the market.
This commitment focussed upon
removing or replacing single-use
plastics including straws, cutlery,
and packaging over time in favour
of sustainable paper, Forest
Stewardship Council certified
wood and compostable
alternatives across the Group’s 60
bars and restaurants. The initiative
has removed over 7.5 million
plastic straws and a number of
plastic cutlery items and
takeaway packing lines from
landfill within the year.
Part of the ongoing commitment
is to continue to test and improve
our use of sustainable products
over time as new alternatives
come to market. The Group has
taken an innovation approach
with its partners to create and
manufacture new sustainable
cutlery and restaurant supplies
where needed that deliver on
exceptional guest experiences
setting new industry benchmarks.
Working across the food and
beverage, procurement and
sustainability teams, team
members and restaurant managers
have been trained as part of the
consolidation and replacement
project with single-use plastic
stocks being depleted over a
number of months to reduce
wastage. Water fountains have
been specified in new designs to
reduce water bottles and other
practices (including offering straws
on request) are in place.
Supporting this on-going
commitment, The Star Sydney is a
founding signatory to the City of
Sydney’s Plastic Reduction Pledge.
ANNUAL REPORT 2019
32
SUSTAINABILITY IN OUR SUPPLY CHAIN
DEVELOPING A MORE
SUSTAINABLE SUPPLY CHAIN
and the extension of our supplier
risk assessment activities.
our single use plastic reduction
commitments.
The Star Entertainment Group
continues to take a long-term view
to managing and maintaining
relationships with suppliers and
contractors and is committed to
continuous improvement in supply
chain management and the
sustainable sourcing of products
and services.
As part of our supply chain
improvement program in financial
year 2019, the Group continued to
implement recommendations from
the supply chain assessment and
gap analysis conducted in
financial year 2018, supported by
the Group Sustainability Strategy
and materiality assessment
process. In the material and higher
risk spend areas of food and
capital developments, further
progress was made to mitigate the
impacts of our procurement via
embedding sustainability
considerations into all relevant
tendering activities and adhering
to sustainable construction
guidelines for capital works.
In the 2019 financial year, the
Group progressed with its
Sustainable Supply Chain Plan
which included preparations to
ensure compliance with the
Modern Slavery Act 2019 (Cth)
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.
Our Queensland-based
roadshows offer an opportunity for
us to directly present our growth
story and strategy to various
agencies and potential vendors,
providing the opportunity to build
pathways to regional suppliers
including those who have a
specific sustainability offering.
One supplier identified during
these roadshows offered
sustainable and natural cleaning
products which were
subsequently trialled and utilised
in our commercial kitchens.
In line with our Single-Use Plastics
Reduction Commitment, supplier
roadshows have been held to
match sustainable and
compostable packaging
alternatives with the dishes that
chefs produce meeting both a food
presentation and customer
requirement. This activity will see
the Group reduce single use
takeaway packaging in line with
The Group undertook the following
projects and initiatives during the
2019 financial year:
• Plastic straws have been
replaced by paper and
compostable alternatives
• Additional still and sparkling
water fountains have been
provided to reduce single-use
water bottles
• Single-use portion containers
for internal use are being
phased out at The Star Gold
Coast and The Star Sydney in
favour of reusable alternatives
• Nineteen at The Star continues
to lead in sustainable cuisine,
sourcing and chef education on
sustainable cooking practices
• Napkins procured across our
properties continue to be made
with Forest Stewardship
Council (FSC)-certified pulp
and are carbon neutral
• Following a company-wide
review of washroom paper
consumables (including hand
towels and toilet rolls) in
FY2019, the Group switched
to FSC certified paper
washroom products.
THE STAR ENTERTAINMENT GROUP PRIDES ITSELF ON SOURCING
LOCAL PRODUCE AND SUPPORTING OUR LOCAL COMMUNITIES. IN
FY2019 WE CONTINUED TO ESTABLISH STRONG RELATIONSHIPS
WITH FARMERS, FISHERIES AND SUPPLIERS ACROSS NEW SOUTH
WALES, QUEENSLAND AND AUSTRALIA TO DELIVER THE BEST
QUALITY PRODUCE TO OUR GUESTS.
THE STAR ENTERTAINMENT GROUP 33
NINETEEN AT THE STAR’S
SUSTAINABLE SOURCING
Nineteen at The Star prides itself
on sourcing its produce from
ethical farmers that produce
sustainable ingredients
including fruit, vegetables,
meat and seafood.
As part of Nineteen at The Star’s
strategy, the restaurant aims for all
of our seafood suppliers to be
recognised by the Marine
Stewardship Council (MSC). The
MSC regularly reviews global
fishing standards aiming to
eliminate over-fishing and ensure
the supply of seafood for future
generations. Since the over fishing
of certain species of tuna has
recently become apparent, we
have sourced Walker Seafoods
Australia to supply our tuna.
Walker Seafoods is an ethical and
sustainable supplier based on the
Sunshine Coast and is the only
tuna supplier in the world that is
recognised by the MSC.
We also pride ourselves on
supporting local farmers and
suppliers such as our sheep
yoghurt supplier out of the Lockyer
Valley in Toowoomba. Other
examples of local, sustainable
produce are our tomato and
mushroom supplies from farmers
on the Sunshine Coast.
Part of being a sustainable
restaurant is incorporating
sustainable cooking practices.
We aim to have zero waste by
using all elements of our
ingredients. For example, our fish
arrive whole so that we can break
them down and use every part of
the animal - from making sauces,
to using the bones to create our
broths. To further showcase our
sustainability credentials, Nineteen
at The Star has developed a
bespoke themed menu series.
The six-part series includes a
focus on sustainable seafood and
ethical, local farming.
South Australian Rock Lobster
Bolognese, Nineteen at The Star
ANNUAL REPORT 2019 34
TRUSTED COMMUNITY PARTNERS
The Star Entertainment Group aims to foster and maintain close connections
with the local communities and cities in which we operate. Reflecting this
core value, in the 2019 financial year, we contributed more than $9 million
to local community groups, events, charities and sporting organisations.
LEADING COMPANY
Our team members proudly
volunteer their time and expertise
to assist in various charitable
events as well as participating in
the “Open Your Heart” program,
while our properties also provide
in-kind support with the use of
world-class venues, including the
provision of event management
and food and beverage supplies.
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).
Since 2014, our Queensland
properties have continually
supported Ronald McDonald
House South East Queensland
(RMHSEQ). Over $3 million has
been donated to RMHSEQ over
this period, including more than
$100,000 in the 2019 financial
year. In addition to raising vital
funds and awareness, team
members at Treasury Brisbane
have volunteered their time at
“Make-a-Meal” events during
Easter and Christmas to provide
assistance to families and
alleviate their stress through
challenging times.
In the 2019 financial year, our
“Open Your Hearts” program
celebrated its 10-year anniversary.
Over this time, team members at
The Star Gold Coast and Treasury
Brisbane nominated and
supported local community
organisations and charities,
donating more than $220,000
through direct contributions.
In April 2019, The Star
Entertainment Group announced
that it had committed to an
exclusive Aboriginal native bee
honey production business on
Minjerribah (North Stradbroke
Island). The Group will work
alongside the Quandamooka
Yoolooburrabee Aboriginal
Corporation (QYAC), representing
the island’s Traditional Owners,
the Quandamooka People to
harvest up to 140 hives and a
future supply of authentic and
exclusive indigenous product.
The Star Entertainment Group will
be the only organisation outside
of the Quandamooka People that
can use the native bee honey –
securing 50% of supply for gifts
and as a key ingredient across its
restaurants and bars.
“WE ARE PROUD TO
HAVE THE STAR’S
SUPPORT AND SEE
THIS TRIAL GROW
INTO A LONG-TERM
PARTNERSHIP THAT
WILL CREATE MANY
ECONOMIC GROWTH
OPPORTUNITIES
FOR OUR
QUANDAMOOKA
PEOPLE –
ESPECIALLY IN JOBS
AND TRAINING.”
CAMERON COSTELLO,
CEO QYAC
THE STAR ENTERTAINMENT GROUP 35
THE STAR GOLD COAST
(L-R) Michael Hodgson, General Manager Tourism, Food &
Beverage, Strategy & Partnerships at The Star Entertainment
Group; Cheyenne Doyle; Dr Tim Heard, Sugarbag Bees
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 celebrated its
25 years’ support as a ‘Community
Partner’ of Surf Life Saving
Queensland in the 2019 financial
year. Through this relationship,
Surf Life Savers across the Gold
Coast received around $40,000 of
equipment including 17 marquees,
2 rescue boards and 124 water
safety rash vests. Representing a
commitment of over 20 years,
The Star Gold Coast continued to
raise awareness for cancer
patients alongside Cancer Council
Queensland. The Star Gold Coast
was an Event Partner of the
organisation’s Gold Coast ‘Relay
for Life’ and donated over $26,000
in the 2019 financial year.
The Gold Coast Hospital
Foundation (GCHF) received a
Charity Quarter Donation (Q2) of
$23,454.28. GCHF is a Gold
Coast based not-for-profit charity
that exists to support sick and
injured child and adult patients
suffering distress and hardship in
Gold Coast local public hospitals
and across community health
centres, as well as advancing
treatment to improve patient
outcomes for all.
involved in developing tourism and
visitation to the region through
various events and sporting
partnerships, including as:
• Official venue and a major
partner of the TV WEEK
Logie Awards
• Naming Rights Partner of Gold
Coast Magic Millions Carnival
and Raceday
• Official Partner of ‘Blues on
Broadbeach’ (an iconic
Australian blues music festival
that nurtures Australian talent
and provides a stage for
international acts)
In the 2019 financial year,
The Star Gold Coast was also
• Groundwater Country
Music Festival.
ANNUAL REPORT 2019 36
THE STAR SYDNEY
Launch of Lunar New Year at The Star Sydney
The Star Sydney is an integral
member of the local Pyrmont
community.
In FY2019, The Star Sydney was a
major sponsor of local community
events including the Pyrmont Food
and Wine Festival and Christmas
in Pyrmont.
The Star Sydney is also proud to
support its neighbours in the City
of Sydney, local community groups
and charities through the annual
Grants Program. In the 2019
financial year, groups we assisted
included:
• Glebe TreeHouse
• Before and After School Care
• Beehive Industries
• The Freedom Hub
• Culture at Work
• PCYC Marrickville Club
• Ultimo Public School P&C
Association Fun Run
• Seabin Project.
In the 2019 financial year,
The Star Sydney extended its
partnership with the Sydney FC to
include both the men’s Hyundai
A-League and women’s Westfield
W-League squads. During this
period, both teams were crowned
champions of their respective
leagues.
The Star Sydney continued their
strong partnership with the NSW
Rugby League and encouraged
NSW Blues fans to “Get into it”
across the series by creating
unique experiences for fans both
on property and at games. The 24/7
Origin Shout promotion rewarded
fans for vocally expressing their
support for the team. 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 Lunar New Year
Festival.
The Star Sydney continues to
support Australia’s creative
industries, holding long-term
partnerships with the ARIA Awards
and AACTA Awards.
THE STAR ENTERTAINMENT GROUP TREASURY BRISBANE
37
Treasury Brisbane team
members presenting a
cheque to Children’s Hospital
Foundation fundraiser.
During the 2019 financial year,
Treasury Brisbane supported
numerous community focussed
and charitable organisations.
Treasury Brisbane returned as
Presenting Partner of Brisbane
Festival for the fifth consecutive
year. The festival is one of
Australia’s major international arts
and cultural events, and
complements the property’s focus
on city pride and local spirit.
Treasury Brisbane is a proud long-
term supporter of CPL - Choice,
Passion, Life (formerly the
Cerebral Palsy League) and in the
2019 financial year, it extended its
relationship to 17 consecutive
years. CPL is the leading provider
of integrated support, therapy and
advice for people living with a
disability in Queensland, and their
families. Our $50,000 donation to
CPL, in addition to raising over
$14,000 for the organisation’s
annual ‘We’ll Make a Change’
fundraising event, contributed to
helping over 8,000 people in
Queensland receive much
needed support.
Treasury Brisbane has also
continued its support of a variety
of multicultural and community
events including:
• Festitalia Italian Festival
• Vietnamese Lunar Festival
• Participating in the National Trust
of Queensland’s ‘Brisbane Open
House’ event by opening the
Treasury Brisbane building to the
public and conducting tours
• Being partner of the Brisbane
Racing Club with naming rights
for Treasury Brisbane Ladies
Oaks Day.
ANNUAL REPORT 2019 38
LEADING COMPANY
The Star Entertainment Group provides a variety of engaging entertainment
experiences at its properties.
RESPONSIBILE GAMBLING
Most of our guests enjoy
gambling as part of their leisure
and entertainment experience
and do so within their financial
means. Unfortunately, a small
percentage of our guests may
experience some difficulty in
controlling their gambling.
The Group’s responsible gambling
program promotes early
identification and intervention with
guests who may be exhibiting signs
of problem gambling.
The objective of the responsible
gambling program is to minimise
the potential harm caused by
gambling (such as financial
hardship, emotional distress and
relationship breakdown), and to
provide guests with the ability 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.
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
• Where we believe there is
sufficient reason to do so, we
exclude people who are at risk
of gambling problems,
including on the basis of third
party information
• 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)
Key operational elements of our
responsible gambling program are:
• We do not allow betting on
credit terms
• 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
• 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.
• We have a dedicated
Responsible Gambling Team
that oversees all areas of the
responsible gambling program
(including compliance with the
Responsible Gambling Policy)
across the Group.
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 from the
Responsible Gambling Team
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
Manager Responsible Gambling.
The position of Group Manager
Responsible Gambling was
introduced in April 2019 to
manage the Responsible
Gambling Team and to drive
continuous improvement of the
responsible gambling program.
The newly created position reports
directly to the Group General
Manager Compliance and
Responsible Gambling.
In Queensland, a Patron Liaison
Manager attends Responsible
Gambling Network meetings on the
Sunshine Coast, the Gold Coast
and in Brisbane.
THE STAR ENTERTAINMENT GROUP 39
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).
In the 2019 financial year, the
Group contributed $19.3 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.
$100 MILLION+
CONTRIBUTED TO
QUEENSLAND’S
GAMBLING
COMMUNITY
BENEFIT FUND
SINCE 1987
$19.3 MILLION
TO THE
RESPONSIBLE
GAMBLING FUND
(NSW)
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
finalising arrangements to provide
the same support services for our
Queensland casinos.
In New South Wales and the Gold
Coast we have completed Guest
Support Centres, readily accessible
from the main gaming area, to offer
guests safe and discrete access to
specialist gambling support and
counselling services. The Guest
Support Centre in our Brisbane
casino will be completed in
FY2020.
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
supported by a group RSA policy
framework
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.
SECURITY AND SURVEILLANCE
• 24/7 security and surveillance
operations
• Over 400 team members
ensuring continuous guest
safety, security and monitoring
across all three properties
• Each property maintains and
incidents register, while an
internal compliance team
reviews all requirements and
conducts regular audits to
support compliance with relevant
legislation and policies
• $10 million total surveillance
technology investment including
introduction of facial recognition
at The Star Sydney.
ANNUAL REPORT 2019
40
TALENTED TEAMS
RECOGNITION AND AWARDS
50% FEMALE
REPRESENTATION
in leadership levels
1-4 by 2020
20% ASIAN
REPRESENTATION
in leadership levels
1-3 by 2020
Australian Human Resource
Institute Awards Finalist
5% YEAR-ON-YEAR
INCREASE
in the Australian Workplace
Equality Index Score
PROVIDING A
WELCOMING CULTURE
for our mature aged
team members
Australian Workplace Equality Index
DIVERSITY AND INCLUSION
• Supported by our Diversity and
The Star Entertainment Group is
committed to promoting and
fostering diversity and inclusion in
the workplace and recognises the
important contribution each team
member’s unique perspectives
and background brings to our
organisation.
Through our Diversity and Inclusion
program, which is embedded in
every aspect of the organisation, we
aim to provide an environment that
enables our team members 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.
Our Diversity and Inclusion
program is:
• Based on our company values of
Ownership, True Teamwork,
Welcoming and City Pride
• Underpinned by our Diversity and
Inclusion Policy
Inclusion Strategy.
The Group’s Diversity and
Inclusion Strategy focuses on four
key areas - Gender, Multicultural,
Age and LGBTQI (lesbian, gay,
bisexual, transgender, questioning
and intersex).
Each of these focus areas have
measurable targets, with progress
towards these goals reported back
to the Board of Directors regularly
throughout the year. The Group also
tracks performance against external
benchmarks, including the
Workplace Gender Equality Agency
report and the Australian Workplace
Equality Index for LGBTQI inclusion.
The Group’s Diversity & Inclusion
Survey, launched in 2017, provides
team members with an opportunity
to provide feedback on experiences
relating to inclusion, and enables the
Group to continually enhance
its approach to diversity
and inclusion.
Throughout the year, our team
members have participated in a
wide range of initiatives and local
and global events, and this year
saw the Group celebrate its
inaugural Diversity and Inclusion
Month during March.
GENDER
We promote gender equality in many
ways and continue to focus on
developing careers for female team
members through education,
targeted recruitment practices,
flexible working practices and
networking opportunities.
As a founding partner of Women in
Gaming and Hospitality Australasia
(WGH), alongside Aristocrat Leisure
Limited, the Group has assisted in
the expansion of the organisation
across several cities in Australia and
in New Zealand throughout the last
financial year. The Group held
several events at its properties,
empowering women in the gaming
and hospitality industries by helping
them to ‘Step Forward’ and influence
their careers, and providing them
with mentorship guidance.
For the third consecutive year, the
Group celebrated International
Women’s Day with the annual ‘Walk
and Talk for Women in Leadership’
THE STAR ENTERTAINMENT GROUP 41
event across all three properties.
The event pairs groups of team
members with leaders and opens
dialogue on work place and gender
topics affecting our female
workforce. In 2019, more than 360
team members participated in the
event, representing an increase of
63% since the first event in 2017.
MULTICULTURAL
More than half of the Group’s 9,000
team members come from culturally
diverse backgrounds, and
collectively are fluent in over
70 languages.
In recognition of the rich diversity in
our workforce, we celebrate Lunar
New Year and Harmony Day across
our properties. In 2019 we
launched new name badges for our
guest-facing employees – these
badges enable guest-facing
employees to display flags or icons
on their name badges to represent
the languages they speak. This
showcases our cultural and
linguistic diversity and also makes it
easier for our guests to identify
someone who can assist them in
their preferred language.
LGBTQI
The Group champions LGBTQI
inclusion both internally and
externally. In FY2019, the Group
introduced a provision of up to five
days of gender transitioning leave.
The integration of the Group’s
diversity and inclusion and
marketing strategies have resulted
in a comprehensive portfolio of
strategic LGBTQI-related
partnerships.
The Star Sydney has been a proud
partner of the Sydney Gay and
Lesbian Mardi Gras for four
consecutive years. Our sponsorship
includes property activations, 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
The Group’s CEO Matt Bekier and
CMO George Hughes with team
members celebrating the 2019 Sydney
Gay and Lesbian Mardi Gras.
Film Festival and the Queer Screen
Film Festival).
In addition, the Group partners
with the following LGBTQI
organisations and events: Pride in
Diversity, Pride in Practice
Conference, Australian LGBTI
Awards and Wear it Purple Day.
Significant dates and awareness
campaigns are celebrated and
promoted throughout the year,
including International Day Against
Homophobia, Biphobia, Intersexism
and Transphobia, Wear it Purple
Day (to support LGBTQI youth) and
World AIDS Day (raising awareness
about the issues surrounding HIV
and AIDS).
MATURE AGE
The Group aims to provide a
welcoming culture for mature age
employees. This involves the
provision of greater career support
to encourage everyone to be their
best self at every age and every
stage of their lives. 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 engage older workers in
continued learning and
development via a self-paced,
online platform, and we offer
workshops that support mature age
team members in planning
for the later stages of their
careers and lives.
Education, awareness and training
form a key part of the Group’s
Diversity and Inclusion Strategy.
On-site and online training
programs in fostering diversity and
inclusion, cultural awareness and
LGBTI awareness are offered to all
our employees.
ANNUAL REPORT 2019 42
TALENTED TEAMS
The Star Entertainment Group recognised that it is training the next
generation of world-class hospitality and tourism team members. We are
committed to developing talented teams who deliver exceptional guest
experiences, and in turn, create shareholder value.
5% YEAR-ON-YEAR
INCREASE
in Australian
Workplace Equality
Index Score
The Star Culinary Institute apprentices
plating at Nineteen at The Star
DEVELOPING FUTURE TALENT
In FY2019, The Star Entertainment
Group continued to build on the
success of its award-winning
training arm – The Star Culinary
Institute – which had registered
more than 100 apprentice chefs
across its three properties, making
it one of the largest private culinary
training programs in Australia.
The Star Entertainment Group’s
partnership with New South Wales
Department of Education and
Queensland Department of
Education has provided a talent
development pathway to The Star
Culinary Institute through the
schools-based apprenticeship and
traineeship program.
The success of the apprenticeship
program over the last financial year
is showcased through the awards
and recognition our apprentices
have received, including:
• Representing The Star and
Australia in the 2019 WorldSkills
final to be hosted in Russia
• Ryde TAFE Excellence in
Commercial Cookery
Certificate III
• Silver Medal: Global Skills
Challenge; Cookery Melbourne
• Gold Medal: La Chaine
Rotisseurs Regional Competition
• Silver Medal: La Chaine
Rotisseurs National Competition
• Australian Representative Global
Young Chefs Award Asia Pacific
• Nestlé Professional 30 Under
30 recipient.
THE STAR ENTERTAINMENT GROUP 43
The Group has made a significant
investment to showcase the
benefits of the tourism and
hospitality industry and career
pathways through a formulised
school work experience program.
This program hosted over 180
students to spend a week at one
of the Group’s properties,
providing them with an opportunity
to gain experience in, and learn
about, a career in hospitality and
tourism. In addition, 112 internships
were offered to tertiary students
studying in the fields of business,
hospitality and tourism.
Following a pilot program, the
investment resulted in the Group
officially launching its Leadership
and Technical Graduate program in
FY2019. The program attracted
highly talented, enthusiastic and
diverse university graduates to our
talented teams. The graduates
learn on-the-job career skills and
real-world experiences.
The Group’s hospitality and gaming
leadership programs continue to
upskill and develop internal talent,
providing them with a growth mind
set, supervisory skills and a solid
framework reflecting the Group’s
leadership competencies.
WORLD-CLASS BAR STAFF
The Star Gold Coast has
introduced ‘The Master Bartender
Project’ – a learning and
development initiative to upskill
bar enthusiasts from across the
property. This project will be a
tiered training package of micro-
learning, classroom learning,
workshops, masterclasses and
practical assessments.
In the 2019 financial year,
The Star Sydney launched
‘The Star Spirits Academy’ and
invited 15 highly engaged and
high-performing team members
from around the property to join
the program. This 6-month
training platform provides team
members with comprehensive
Matt Bekier, The Star Entertainment Group CEO with
chefs and apprentices at Nineteen at The Star.
skills and knowledge of the history
of spirits, cocktail techniques and
emerging trends from around the
globe. The Star Spirits Academy
concludes with team members
completing the Wine and Spirits
Education Trust (WSET) Level 1
& 2 Award, which is a globally
certified and recognised
accreditation.
PLAYING TO OUR STRENGTHS
The Star launched Strengths
Finder in FY2015, which to date
has delivered 690 strengths
development coaching
assignments, 40 team strengths
sessions and leadership focus
across the organisation.
The Star’s strengths-based
cultural transformation is
influenced by a dedicated group
of internal certified coaches. This
group is comprised of 12
members from across the Group’s
People & Performance team. The
coaches’ responsibilities include
conducting individual and team
coaching and other strength-
based interventions, linking
strength-based activities with
strategic priorities, and influencing
a change and transformation
mindset across the business.
HIGHLIGHTS
100+
APPRENTICES
NATIONALLY
180 WORK
EXPERIENCE
PLACEMENTS
112 TERTIARY
INTERNSHIPS
11 TECHNICAL
AND
LEADERSHIP
GRADUATE
ROLES
The Group continues to deliver
‘just in time’ development
offerings to team members
working in a 24/7 environment
through online eLearning
platforms, and has created
micro-learning programs to inspire
and engage team members to
embrace and self-manage their
own learning and development.
ANNUAL REPORT 2019 44
WORK, HEALTH & SAFETY
At The Star Entertainment Group, the health and safety of our team
members and our guests is paramount. We believe that everyone has a
right to return home healthy and safely every day, and that everyone has a
responsibility to care for themselves and those around them.
Our goals include eliminating work related injuries, illnesses and unsafe work
practices and promoting the health and welfare of our team members. In FY2019
we continued to drive improvements in six key areas.
Our safety
management
system
Reporting
and quality
of data
The management of
our critical
risks
Learning
from every
incident
Assurance
activities
Injury
management
53% REDUCTION OF
WORK-RELATED
INJURIES OVER THE
LAST FIVE YEARS
While we have continued to
enhance our properties with
significant construction activity,
we have worked closely with
contractors to ensure minimal
disruption to guests whilst ensuring
a safe environment for all who work
and play on our properties. In
addition, we have continued to
stage significant events without
incident, which is evidence of our
effective processes and fabulous
teamwork.
Training sessions aimed at
improving how we care for our team
members in relation to injury
prevention, reporting and
management of workplace injuries
have been delivered to more than
550 managers and supervisors.
The Group has also increased
initiatives focussing on
psychological safety. Mental Health
Awareness training aimed at
increasing our managers’
confidence and skills in identifying
and supporting our team members
with mental health issues has
commenced. Wellness and
coaching sessions incorporating
principles of positive psychology are
also now available to all team
members through our enhanced
Employee Assistance Program.
To achieve the Group’s goal of
always working and playing safely,
we will continue to focus on
operational safety at the design
stage of construction, assessing
and managing risk when planning
and executing building projects,
managing our health and safety risk
in a disciplined and consistent
manner, and engaging our people to
create a culture of consistently
caring for ourselves and others.
THE STAR ENTERTAINMENT GROUP 45
REWARD AND RECOGNITION
At The Star Entertainment Group,
we recognise the importance of
sharing and celebrating our team
members and leaders as well as
their individual and collective
stories. Together they set the
benchmark for the delivery of guest
service excellence. The Star
Awards are our way of recognising
and rewarding our top performers.
Following team member feedback,
in the 2019 financial year the Group
has made several changes ensuring
that the significance and prestige of
these awards are widely recognised.
These changes include:
• Aligning celebrations and events
across the Group
• Creation of a new ‘Team Award’
category to recognise our core
value of true teamwork
• A clear and transparent scoring
system for nominees
• An easier process to nominate
recipients – with an online form.
Additionally, to demonstrate the
Group’s appreciation of its team
members, we have created the
Annual Star Awards Gala – a red-
carpet event which celebrates ‘Star
Award’ winners and other ‘heroes’.
SAMANTHA LEVETT
Junior Sous Chef,
Momofuku Seiōbo
VICKI ELDRIDGE
Dealer/Floor Manager,
Treasury Brisbane
WAYNE DESIRA
Sous Chef, The Star
Gold Coast
Samantha is a talented
chef, who’s dedicated and
thoughtful work ethic has
allowed her to take on a
myriad of challenges where
she has excelled beyond
expectations.
Since commencing with
The Star Culinary Institute
in December 2014,
Samantha has continually
impressed our head chefs
and the Institute’s
management through her
commitment to her craft.
Samantha has delivered
outstanding six-star
hospitality experiences
across The Star Sydney’s
food and beverage
offerings including the
property’s signature
restaurants, BLACK Bar &
Grill, Sokyo and Momofuku
Seiōbo where she is now a
junior sous chef.
An energetic team player,
Samantha is an inspiration
to those around her and for
the future of the industry.
Vicki is the absolute
epitome of all our Star
Qualities and she delivers
them with such boundless
energy and enthusiasm.
She is also a proactive
supporter of all things that
represent City Pride,
diversity and culture, as
well as team engagement
initiatives.
Vicki is a true guest
service champion and
pro-actively drives guest
promotions and offers,
especially encouraging
guests to join our loyalty
program.
Vicki sets the bar high –
the positive guest
experiences she creates
and the wonderful rapport
she builds with others are
a true inspiration, and we
are fortunate to have Vicki
as a representative of our
team and The Star
Entertainment Group.
Wayne embodies the
essence of what our values
at The Star Gold Coast
represent. He takes
ownership daily, is a true
team player and assists all
outlets with their
requirements.
Generous with his time and
expertise, Wayne welcomes
and guides new starters and
work experience students to
take their first steps into the
business. He leads by
example and his leadership
qualities are highlighted by
the longevity of his team.
Outside of his role, Wayne
also inspires all our staff by
creating and executing
specialty themed meals for
Christmas, Chinese New
Year and Halloween, which
reinvigorates the whole
property.
Wayne is an understanding
and passionate individual
who is willing to go the extra
mile to provide our internal
and external guests with the
best possible meals.
REBECCA FIRMAN
Learning & Development
Coordinator, The Star
Entertainment Group
Rebecca is an integral
member of The Star
Entertainment Group’s
People and Performance
team for over nine years.
In this time, she has led
The Star Gold Coast’s
‘Welcome Day’ which
introduces new team
members to the property
and has since inducted over
1,000 team members.
Rebecca is quick to support
others, whilst also ensuring
she is available for any task
– nothing is too big or too
small. Her authenticity and
optimistic nature contribute to
a positive work environment
where everyone feels valued,
which resonates throughout
the organisation.
She consistently inspires
team members to strive to
be their best selves and
deliver exceptional
guest experiences.
ANNUAL REPORT 2019
46
DIRECTORS’, REMUNERATION
AND FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2019
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
DIRECTORS’, REMUNERATION AND 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
80
81
82
83
84
85
86
91
102
101
110
117
127
135
136
THE STAR ENTERTAINMENT GROUP 47
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
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 2019.
1. Directors
The names and titles of the Company's Directors in office during the financial year ended 30 June 2019 and until the
date of this report are set out below. Directors were in office for this entire period.
Directors
John O'Neill AO
Matt Bekier
Gerard Bradley
Ben Heap
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Zlatko Todorcevski
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
2. Operating and Financial Review
The Operating and Financial Review for the year ended 30 June 2019 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 on time and budget to deliver value and returns for shareholders;
•
Increase visitation from local, domestic and international markets through continued emphasis on loyalty, signature
gaming, premium hotels and diversity of food and beverage offerings;
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:
• Continued above-system growth in domestic gaming with slots market share gains at all properties, solid tables
growth and continued private gaming room (PGR) growth;
• Capital works delivered to plan, including the Sydney and Gold Coast PGR upgrades and the Sydney lobby and
•
•
porte cochere;
Joint venture capital works delivering to plan including Queenʼs Wharf Brisbane and the Gold Coast tower;
Improving capital efficiency in a low growth environment by targeted reductions and commencement of a process
to release further capital; and
• Focus on shareholder returns through continuous cost management and operational leadership in moving to the
Centres of Excellence model.
Looking forward into FY2020, the focus will be on the following key strategic priorities:
•
Leveraging the Centre of Excellence operating model to continue to build on solid PGR member growth and
improve main gaming floor (MGF) performance as well as extract and retain efficiencies;
• Delivering on the next stage of the capital development programs with joint venture partners including Queenʼs
Wharf Brisbane and Gold Coast masterplan;
• Continuing to seek approvals for the proposed construction of The Ritz-Carlton Hotel and Residences in Sydney;
• Managing the competitive environment for the Sydney new entrant and Gold Coast market; and
1
ANNUAL REPORT 2019 48
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
• Continuing to improve capital efficiency, through reduced capital outlook and potential capital recycling of
supporting assets.
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, before commissions, of $2,514.0 million was down 2.5% on the prior comparable period (pcp), largely
due to an unusually low turn rate in the International VIP Rebate business given the higher win rate of 1.38% (1.16% in
the pcp). This was partially offset by broad based growth in domestic gaming and non-gaming. Normalised1 gross
revenue decreased 7.2% for the period to $2,500.9 million, down from $2,694.7 million in the pcp, as a result of lower
International VIP Rebate business volumes, down 30.7%.
Operating costs were flat on pcp, reflecting domestic volume growth, higher wages and higher interim service levels for
recently commissioned Gold Coast assets and Sydney transition to Sovereign Resort, offset by lower International VIP
Rebate business volumes and continuing cost management. Gaming taxes and levies were up 1.0%, in line with
increased revenue. Significant expense items ($32.4 million before tax) relate to restructuring and redundancy costs of
$42.1 million partially offset by a gain on disposal of land of $9.7 million.
Earnings before interest, tax, depreciation, amortisation (EBITDA) (excluding significant items) of $552.8 million was
up 14.1% on the pcp. Normalised EBITDA, excluding significant items, was $556.5 million, down 2.0% on the pcp.
Depreciation and amortisation expense of $205.8 million was up 9.9% on the pcp as new investments are
commissioned. Finance costs of $35.3 million were up 2.9% on the pcp (excluding significant items).
Net profit after tax (NPAT) was $198.0 million, up 33.7% on the pcp. Normalised NPAT, excluding significant items,
was $223.7 million, down 8.4% on the pcp.
Basic and Diluted Earnings per Share were both 21.6 cents (both 17.5 cents in the pcp). A final dividend of 10.0 cents
fully franked was declared. The full year dividend totalling 20.5 cents per share is equal to the pcp. This reflects the
dividend payout policy of a minimum dividend of 70% of normalised NPAT. This amounts to 84% of normalised NPAT
(95% of statutory NPAT) for the year ended 30 June 2019.
2.4. Group financial position
The Groupʼs net asset position was in line with the pcp.
Receivables remain well managed, with receivables not impaired less than one year comprising 95% of the total. Net
receivables past due, not impaired, greater than 30 days of $54.7 million, were up 90.6% on the pcp, reflecting a small
number of high value players.
Net debt2 was $972.6 million (30 June 2018: $678.0 million). On 3 July 2019, the Group refinanced its bank facilities,
increasing the total facility limit to $1.2 billion and average drawn debt maturity to 5.3 years. Gearing levels support
investment plans at 1.9 times FY2019 net debt to statutory EBITDA. This, coupled with refinancing the Groupʼs bank
facilities in July 2019, positions the Group well to continue executing on its growth projects. Operating cash flow before
interest and tax was $478.8 million (30 June 2018: $496.7 million) with an EBITDA to cash conversion ratio of 92% (30
June 2018: 105%).
Trade and other payables of $340.9 million were down 6.8%, predominately relating to players' funds deposited at 30
June 2019, which decreased in line with the International VIP Rebate business volumes.
1 Normalised results reflect the underlying performance of the business as they remove the inherent win rate volatility of the
International VIP Rebate business. Until FY18, normalised results were adjusted using an average win rate of 1.35% on turnover and
taxes. Commencing FY19, the Group also normalises commissions on revenue share programs with the impact on the prior year
comparative being an increase in commissions of $20.1m. Normalised earnings exclude significant items.
2 Net debt is shown as interest bearing liabilities, less cash and cash equivalents, less net position of derivative financial instruments.
2
THE STAR ENTERTAINMENT GROUP 49
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
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 $1,567.8 million, down 9.7% on the pcp and EBITDA (excluding significant items) was $307.6
million, up 7.6% on the pcp. Normalised EBITDA was $367.4 million, down 5.7% on the pcp.
Normalised gross revenue in Sydney was $1,631.4 million, down 13.0% on the pcp. Revenue decreased due to lower
International VIP Rebate business volumes (down 39.7% on the pcp), partially offset by continued domestic revenue
growth. Electronic gaming machine market share remained consistent with the pcp. Non-gaming revenue was down
1.3% with increased hotel capacity offset by impact from food and beverage vendor refurbishments.
Gaming taxes and levies of $360.0 million were down 2.4% on the pcp as a result of lower International VIP Rebate
business volumes. Sydneyʼs average non-rebate tax rate was 31.0%, down from 32.0% in the pcp (top marginal tax
rate of 50.0% in both years). Operating expenditure of $640.7 million was down 2.9% on the pcp, reflecting increased
domestic volumes and higher wages offset by lower International VIP Rebate business volumes. Normalised EBITDA
margin of 22.5% was up 1.7% on the pcp.
The Sydney property is a Leadership Partner for Sydneyʼs Lunar Festival, a proud major sponsor and 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, the world's richest race on turf. 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 $946.2 million up 12.3% on the pcp and EBITDA (excluding significant items) was $245.2 million,
up 23.5% on the pcp. Normalised EBITDA was $189.1 million, up 5.9% on the pcp.
Normalised gross revenue in Queensland was $869.5 million, up 6.0% on the pcp. Revenue increased due to higher
International VIP Rebate business volumes up 23.5% on the pcp and win rate of 2.06% (1.61% in the pcp).
Queensland revenue increased with all business segments contributing to growth. Non-gaming revenue was up 2.4%
on the pcp, with customers continuing to respond to the enlarged and upgraded offering.
Gaming taxes and levies were up 8.5% on the pcp, driven by increased International VIP Rebate business volumes
through the period. Operating expenses of $420.6 million across the Queensland properties were up 4.9% on the pcp.
This was driven by increased domestic and international volumes, higher wages and newly commissioned assets on
the Gold Coast, offset by continued cost management. Normalised EBITDA margin of 21.7% was flat on the pcp.
The Gold Coast property is the home of the TV Week Logie Awards and major sponsor of The Star Magic Millions
Raceday and Carnival. The Brisbane property was a sponsor of the Brisbane Festival and Brisbane Racing Club.
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 $42.4 billion, down 30.7% on the pcp. The actual win rate of 1.38%
was above both the win rate for the pcp of 1.16% and the theoretical rate of 1.35%. Statutory revenue was $586.0
million, down 17.6% on the pcp, compared to normalised International VIP Rebate business revenue of $572.9 million
(down 30.7% on the pcp). Player rebates and levies of $355.9m were down 28.2% on pcp, reflecting the lower turnover
offset by win rate improvements.
3
ANNUAL REPORT 2019 50
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
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 Chow Tai Fook Enterprises Limited (CTF) and Far
East Consortium International Limited (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). On 25 July 2019, the NSW Government Department of Planning, Industry and Environment
recommended against the proposed construction of The Ritz-Carlton Hotel and Residences. The Star continues to
seek approval for the development from the NSW Government Independent Planning Commission, which is the
decision making authority.
Capital expenditure in the year was approximately $240.0 million, including the completion of the redevelopment of
The Star Grand lobby and porte cochere. The Sovereign Resort 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 of the tower continues and is
expected to cost approximately $370 million. Presales on the second tower have commenced (construction is subject
to presales and all other approvals). 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).
As announced on 5 March 2019, the Group has been invited into the second stage of the Queensland Government's
process in relation to a global tourism hub on the Gold Coast. The second stage is to provide an expression of interest
for the Gold Coast tourism hub. This stage has not yet been commenced.
Capital expenditure in the current year was approximately $70 million. This included redevelopment of the Harvest
Buffet and Oasis Lounge.
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 excavation work completed in July 2019.
Target total project costs are estimated to be approximately $2.4 billion, excluding Government payments and
Treasury Brisbane repurposing costs. In July 2019 DBC secured contracts for approximately 60% of the project costs
for the development of the shell, core and façade stage. The fit-out stage is expected to be contracted in FY2020,
securing a further 28% of the project costs.
4
THE STAR ENTERTAINMENT GROUP 51
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
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
in
the Groupʼs key markets of Sydney,
Brisbane and 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
interests
satisfy
without
the Groupʼs operations or
compromising
strategic
achievement of
objectives.
the Groupʼs
competing
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 Groupʼs vision is to be Australiaʼs leading integrated resort
company. Substantial investments have been made to develop new
or improved venue facilities in all key markets, and to improving
customer service capabilities of employees. Revenue sources have
also been diversified.
The Group has implemented a comprehensive project management
framework and employed appropriately skilled and experienced
project managers to reduce the risk of delays in completion and/or
overruns in costs of capital projects. The Group continues to improve
capital efficiency, through reduced capital outlook and potential
capital recycling of supporting assets. The Group markets and
promotes 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. It undertakes
training and development programs to provide employees with career
development opportunities. The Group regularly conducts employee
engagement surveys 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, key Federal and State regulators, 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. This includes matters core to
the integrity of gaming operations such as gaming regulatory
compliance, responsible gaming and service of alcohol and Anti-
Money Laundering and Counter-Terrorism Financing (AML & CTF)
Act compliance. The Group has dedicated regulatory and compliance
teams and a specialist AML & CTF compliance team that has
recently enhanced the Group's AML Program. The Group also makes
representations to government and industry groups to promote
effective, appropriate and consistent regulatory and policy outcomes.
5
ANNUAL REPORT 2019 52
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
Risk and description
Mitigation strategy
the
to protect
Data and systems security and reliability
The ability
integrity of
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.
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 the Group's 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 Group has a dedicated IT security function which continuously
tests and monitors technology systems to detect and block viruses
and other threats to the security of the Company's data. Employees
are regularly trained on the importance of maintaining effective cyber
security and data privacy processes.
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 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 metre basis. An
6
THE STAR ENTERTAINMENT GROUP 53
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
active energy and water project pipeline, first established in FY2014, 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 obtaining its first Green Star Performance Rating, enabling the benchmarking of operational
performance of The Star's assets. The Companyʼs offices at 60 Union Street, Pyrmont, New South Wales have
achieved a 5 Star Green Star Interiors Rating as part of the refurbishment process.
The Group retained the global leadership position in the Casino and Gaming Industry in the Dow Jones Sustainability
Index for the third year running. The Sydney property achieved finalist status for the Groupʼs ʻEnvironmental Programʼ
at the HM Awards in September 2018 and won a sustainability award at the ʻGlobal Trend Marketing Awardsʼ for the
video case study promoting water savings by using waterless works.
The Group's Global Reporting Index (GRI) report is published on the Company's website, demonstrating a ʻcoreʼ level
of compliance. The GRI Reporting Standards are the most widely used standards for sustainability reporting, and
represent global best practice for reporting on economic, environmental and social impacts.
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 each 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 and diluted EPS for the financial year was 21.6 cents (2018: 17.5 cents), 23.4% up on the pcp as a result of the
increase in net profit after tax. EPS is disclosed in note F3 of the Financial Report.
4. Dividends
4.1. Dividend payout
An interim dividend of 10.5 cents per share (fully franked) was paid on 3 April 2019.
A final dividend per share of 10.0 cents (fully franked) was declared. The full year dividend totalling 20.5 cents per
share is equal to the pcp and reflects a payout ratio of 84% of normalised NPAT (95% of statutory NPAT) for the year
ended 30 June 2019.
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 23 August 2019. 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 (22 August
2019). 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 3 July 2019, the Company successfully refinanced its bank facilities, with new bilateral bank facilities replacing all
Syndicated Bank Facilities, which have been repaid and cancelled.
The new bilateral facilities have a total limit of $1.2 billion (increased from $0.8 billion of bank facilities at 30 June
2019). The new facilities have maturities of between three and five years, increasing the weighted average maturity of
the company's debt facilities from 3.8 to 5.3 years. Unamortised borrowing costs of $1.7 million associated with the
existing facilities will be expensed to the income statement in FY2020.
On 25 July 2019, the NSW Government Department of Planning, Industry and Environment recommended against the
proposed construction of The Ritz-Carlton Hotel and Residences in Sydney. The Star continues to seek approval for
the development from the NSW Government Independent Planning Commission, which is the decision making
authority.
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 2019 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
ANNUAL REPORT 2019 54
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
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; Officer
of the Order of Australia; French decoration of Chevalier de la Legion d'Honneur
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, as well as a Director of Tabcorp Holdings 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, as well as a Director of
Rugby World Cup Limited.
Mr O'Neill is currently Chairman of Queensland Airports Limited. Mr O'Neill also chairs the
Bates Smart Advisory Board and is 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
THE STAR ENTERTAINMENT GROUP 55
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
Current Directors
Gerard Bradley
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 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
• Member of the Investment and Capital Expenditure Review Committee
Directorships of other Australian listed companies held during the last 3 years:
• Pinnacle Investment Management Group Limited (1 September 2016 to present)
Ben Heap
Non-Executive Director (from 23 May 2018)
Bachelor of Commerce (Finance); Bachelor of Science (Mathematics)
Experience:
Ben Heap has wide-ranging experience in asset and capital management as well as
technology and digital businesses. He has extensive business strategy, innovation,
investment and governance expertise.
Mr Heap is a Founding Partner of H2 Ventures, a venture capital investment firm and a
Director of its related private companies. He is a Non-Executive Director of Colonial First
State Investments Limited (a subsidiary of the Commonwealth Bank of Australia), the Vice
President of Gymnastics Australia and a member of the Australian Commonwealth
Governmentʼs Fintech Advisory Group.
Mr Heap was previously Managing Director for UBS Global Asset Management in
Australasia and prior to this, Head of Infrastructure for UBS Global Asset Management in
the Americas. He held a number of directorships associated with these roles. 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
ANNUAL REPORT 2019 56
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
Current Directors
Katie Lahey AM
Sally Pitkin
Non-Executive Director (from 1 March 2013)
Bachelor of Arts (First Class Honours); Master of Business Administration; Member of the
Order of Australia
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 Chairman Australasia of Korn Ferry International and a Director of
Carnival Corporation & plc.
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 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 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.
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
THE STAR ENTERTAINMENT GROUP 57
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
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 the Lead Independent and Deputy Chairman of Adelaide
Brighton Limited and a member of the Council of the University of Wollongong. Mr
Todorcevski is also a Non-Executive Director of Coles Group Limited.
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)
• Coles Group Limited (19 November 2018 to present)
11
ANNUAL REPORT 2019 58
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
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
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Zlatko Todorcevski
80,858
1,006,320
50,000
30,000
36,907
45,900
150,000
70,000
Nil
2,097,569
Nil
Nil
Nil
Nil
Nil
Nil
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.
9. Board and Committee meeting attendance
During the financial year ended 30 June 2019, the Company held 10 meetings of the Board of Directors (including two
unscheduled meetings which were attended by a majority of 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
10
10
10
10
10
9
9
10
10
10
10
10
10
10
10
10
4
-
4
3
2
4
4
4
4
-
4
-
-
4
4
4
4
-
4
4
4
4
4
4
4
-
4
4
4
-
4
4
4
-
-
4
4
4
-
2
4
-
-
4
4
4
-
-
4
-
-
4
4
4
-
3
4
-
-
4
4
4
-
-
3
-
3
1
-
2
3
3
3
-
3
-
-
-
3
3
Directors
John O'Neill AO
Matt Bekier c
Gerard Bradley
Ben Heap
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Zlatko Todorcevski
A - Number of meetings attended as a Board or Committee member.
B - Maximum number of meetings available for attendance as a Board or Committee member.
c
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.
12
THE STAR ENTERTAINMENT GROUP 59
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
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 2019. 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.
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
Total of all non-audit and other services
$000
10.0
78.9
88.9
Amounts paid or payable by the Company for audit and non-audit services are disclosed in note F12 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.
13
ANNUAL REPORT 2019 60
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Report
for the year ended 30 June 2019
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 2019. 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
16 August 2019
14
THE STAR ENTERTAINMENT GROUP AUDITOR’S INDEPENDENCE DECLARATION
FOR THE YEAR ENDED 30 JUNE 2019
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 financial report of The Star Entertainment Group for the financial
year ended 30 June 2019, 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
16 August 2019
61
15
ANNUAL REPORT 2019
6262
THE STAR ENTERTAINMENT GROUP
REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES
THE STAR ENTERTAINMENT GROUP
REMUNERATION REPORT (UNAUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
63
16
ANNUAL REPORT 2019 64
REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
65
66
66
67
75
76
77
78
78
79
79
17
THE STAR ENTERTAINMENT GROUP REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
65
18
ANNUAL REPORT 2019 66
REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
54 to 57.
19
THE STAR ENTERTAINMENT GROUP REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
67
20
ANNUAL REPORT 2019 68
REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
21
THE STAR ENTERTAINMENT GROUP REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
69
22
ANNUAL REPORT 2019 70
REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
23
THE STAR ENTERTAINMENT GROUP REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
71
24
ANNUAL REPORT 2019 72
REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
25
THE STAR ENTERTAINMENT GROUP REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
73
26
ANNUAL REPORT 2019 74
REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
27
THE STAR ENTERTAINMENT GROUP REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
75
8
2
ANNUAL REPORT 2019 76
REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
9
2
THE STAR ENTERTAINMENT GROUP REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
77
30
ANNUAL REPORT 2019 78
REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
31
THE STAR ENTERTAINMENT GROUP REMUNERATION REPORT (AUDITED)
FOR THE YEAR ENDED 30 JUNE 2019
79
2
3
ANNUAL REPORT 2019 80
80
THE STAR ENTERTAINMENT GROUP
FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2019
THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES
THE STAR ENTERTAINMENT GROUP
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated income statement
For the year ended 30 June 2019
Revenue
Other income
Government taxes and levies
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 income 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
81
2019
$m
2018
Restated*
$m
2,158.1
2,084.0
Note
A2,G
A3
A3
A3
A4
A3
D5
A5
F2
F1
F3
F3
A6
11.5
(544.0)
(704.9)
(205.8)
(95.0)
(81.5)
(107.3)
(116.5)
(0.6)
314.0
(35.3)
278.7
(80.7)
198.0
-
(538.5)
(669.4)
(187.2)
(91.5)
(81.9)
(115.9)
(111.9)
(0.1)
287.6
(77.2)
210.4
(62.3)
148.1
(5.4)
192.6
(3.4)
144.7
21.6 cents
17.5 cents
21.6 cents
20.5 cents
17.5 cents
20.5 cents
The above consolidated income statement should be read in conjunction with the accompanying notes.
* 2018 comparatives have been restated as part of the transition to AASB 15 Revenue from Contracts with Customers. Refer to note G(i)
for further information.
33
ANNUAL REPORT 2019 82
CONSOLIDATED BALANCE SHEET
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated balance sheet
For the year ended 30 June 2019
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
Other liabilities
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
F7
F9
F9
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
2019
$m
114.3
235.5
17.5
7.9
52.0
427.2
2,779.8
1,861.4
82.7
385.0
47.6
5,156.5
5,583.7
340.9
196.4
12.2
99.9
5.6
18.8
673.8
965.9
170.7
16.9
9.6
5.9
1,169.0
1,842.8
3,740.9
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
3,063.0
693.5
(15.6)
3,070.2
718.3
(7.0)
3,740.9
3,781.5
34
THE STAR ENTERTAINMENT GROUP CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated statement of cash flows
For the year ended 30 June 2019
83
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
Purchase of treasury shares
Issuance fees on purchase of shares
Net cash inflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
2019
$m
2018
Restated*
$m
2,162.7
(1,158.8)
(525.1)
0.4
(67.8)
2,084.4
(1,068.7)
(519.0)
1.0
(100.6)
411.4
397.1
(327.6)
(105.4)
(433.0)
546.0
(250.0)
-
(215.6)
(47.6)
-
(6.7)
(0.5)
25.6
4.0
110.3
114.3
(475.6)
(76.5)
(552.1)
1,268.4
(1,517.1)
102.5
(132.1)
(59.5)
489.4
-
-
151.6
(3.4)
113.7
110.3
Note
F2
F10
E2
E2
E2
A6
F9
F8
B1
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
* 2018 comparatives have been restated as part of the transition to AASB 15 Revenue from Contracts with Customers. Refer to note G(i)
for further information.
35
ANNUAL REPORT 2019 84
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
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T
THE STAR ENTERTAINMENT GROUP
85
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
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
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
B Key balance sheet disclosures
A1 Segment information
A2 Revenue
A3 Other income and expenses
A4 Depreciation and amortisation
A5 Net finance costs
A6 Dividends
A7 Significant items
38
39
39
40
40
41
42
86
87
87
88
88
89
90
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
Intangible assets
Impairment testing and goodwill
43
43
45
46
47
48
91
91
93
94
95
96
Assets
B1 Cash and cash equivalents
B2
Trade and other receivables
B3 Derivative financial instruments
B4 Property, plant and equipment
B5
B6
Liabilities
B7
Interest bearing liabilities
98
50
52
52
52
100
100
100
Investment in associate and joint venture entities
Financial risk management objectives and policies
C1 Commitments
C2 Contingent liabilities
C3 Subsequent events
E1
E2 Additional financial instruments disclosures
D1 Related party disclosures
D2 Parent entity disclosures
D3 Deed of cross guarantee
D4 Key Management Personnel disclosures
D5
................................................................................................................................................................................................................................................................
C Commitments, contingencies and subsequent events
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
D Group structure
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
E Risk Management
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
F Other disclosures
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
................................................................................................................................................................................................................................................................
G Accounting policies and corporate information
F1 Other comprehensive income
F2
F3
F4 Other assets
Trade and other payables
F5
F6
Provisions
F7 Other liabilities
F8
F9
F10 Reconciliation of net profit after tax to net cash inflow from operations
F11 Employee share plans
F12 Auditor's remuneration
Treasury shares
Share capital and reserves
Income tax
Earnings per share
69
69
72
72
72
73
74
74
74
76
77
78
79
117
117
120
120
120
121
122
122
122
124
125
126
127
101
103
104
105
106
53
55
56
57
58
110
114
62
66
37
ANNUAL REPORT 2019 86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
A Key income statement disclosures
A1 Segment information
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 Group has three reportable segments:
Sydney
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
Comprises Treasury's casino operations, including hotel, restaurants and bars.
2019
Gross revenues - VIP a
Gross revenues - domestic a
Segment revenue
tax,
Segment
depreciation, amortisation and significant items
earnings
interest,
before
Depreciation and amortisation (refer to note A4)
Capital expenditure
2018
Gross revenues - VIP a
Gross revenues - domestic a
Segment revenue
Segment earnings before interest, tax, depreciation,
amortisation and significant items
Depreciation and amortisation (refer to note A4)
Capital expenditure
Sydney
$m
364.5
1,203.3
1,567.8
307.6
123.6
238.4
Sydney
$m
571.4
1,165.3
1,736.7
285.8
114.2
192.0
Gold Coast
$m
Brisbane
$m
213.8
384.4
598.2
148.2
54.9
69.9
7.7
340.3
348.0
97.0
27.3
25.6
Gold Coast
$m
Brisbane
$m
132.8
376.9
509.7
116.9
42.3
258.5
7.3
325.8
333.1
81.7
30.7
39.5
Total
$m
586.0
1,928.0
2,514.0
552.8
205.8
333.9
Total
$m
711.5
1,868.0
2,579.5
484.4
187.2
490.0
a
Gross revenue is presented as the gross gaming win before player rebates and promotional allowances of $355.9 million
(2018: $495.5 million).
Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation (refer to note A4)
Significant items (refer to note A7)
Unallocated items:
- net finance costs (refer to note A5)
- share of net loss of associate and joint venture entities accounted for using
the equity method (refer to note D5)
Profit before income tax (PBT)
2019
$m
552.8
(205.8)
(32.4)
2018
$m
484.4
(187.2)
(52.4)
(35.3)
(34.3)
(0.6)
278.7
(0.1)
210.4
38
THE STAR ENTERTAINMENT GROUP NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
A2 Revenue
Domestic gaming
International VIP Rebate business
Non-gaming
Other
87
2019
$m
1,342.4
255.9
548.8
11.0
2,158.1
2018
Restated*
$m
1,304.9
245.9
524.0
9.2
2,084.0
*2018 comparatives have been restated as part of the transition to AASB 15 Revenue from Contracts with Customers. Refer to note
G(i) for further information.
Revenue is up $74.1 million or 3.6% on the prior comparable period (pcp) mainly due to growth in domestic
gaming driven by the successful opening of Sovereign Resort in Sydney.
Revenue
Revenue is recognised when the Group satisfies its obligations in relation to the provision of goods and services to its
customers in the ordinary course of business. Revenue is measured at an amount that reflects the consideration to
which the Group expects to be entitled in exchange for performing these obligations, including any discounts, rebates,
price concessions, incentives or performance bonuses. Revenue is constrained such that the significant reversal of
revenue in a future period is not highly probable. Revenue comprises net gaming win, less player and gaming
promoter rebates and promotional allowances, as well as other non-gaming revenue from hotels, restaurants and bars.
Customer loyalty programs
The Group operates customer loyalty programs enabling customers to accumulate award credits for gaming and on-
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
income statement when the award is redeemed or expires. The stand alone selling price of complimentary services
(including hotel room nights, food and beverage, and other services) that are provided to casino guests as incentives
related to gaming play are recorded as revenues related to the respective goods or services, as they are provided to
the patron. The residual amount is recorded as gaming revenue.
A3 Other income and expenses
Profit before income tax is stated after charging the following expenses and significant items:
Other income
Net foreign exchange gain
Gain on disposal of assets a
a Balance includes $9.7m gain on disposal of Gold Coast land (refer to note A7).
Government taxes and levies (including gaming GST):
New South Wales
Queensland
Employment costs:
Salaries, wages, bonuses, redundancies and other benefits
Defined contribution plan expense (superannuation guarantee charges)
Share based payment expense (refer to note F11)
2019
$m
0.9
10.6
11.5
360.0
184.0
544.0
652.7
50.1
2.1
704.9
2018
$m
-
-
-
368.9
169.6
538.5
616.7
47.2
5.5
669.4
39
ANNUAL REPORT 2019 88
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Cost of inventories recognised as an expense during the year
Impairment of trade receivables (refer to note B2)
Operating lease charges
Significant items (refer to note A7)
A4 Depreciation and amortisation
Property, plant and equipment (refer to note B4)
Intangible assets (refer to note B5)
Other
2019
$m
95.0
5.5
11.1
32.4
172.3
32.3
1.2
205.8
2018
$m
91.5
7.6
12.0
52.4
155.2
30.8
1.2
187.2
Depreciation is calculated using a straight line method. The useful lives over which the assets are depreciated are as
follows (for further details of the useful lives of intangible assets refer to note B5):
Freehold and leasehold buildings
Leasehold improvements
Plant and equipment
Software
Licences
10 - 95 years
4 - 75 years
5 - 20 years
3 - 10 years
Until expiry
Operating equipment (which includes uniforms, casino chips, kitchen utensils, crockery, cutlery and linen) is
recognised as a depreciation expense based on usage. The period of usage depends on the nature of the operating
equipment and averages up to 3 years.
The residual values and useful lives are reviewed annually, and adjusted if appropriate, at each financial reporting
date.
A5 Net finance costs
Interest paid on borrowings
Capitalised to property, plant and equipment a
Borrowing costs
US Private Placement premium unwind
Fair value hedging adjustment
Interest income
Net finance costs before significant items
US Private Placement tender and reissue costs
Net finance costs recognised in the income statement
44.0
(7.1)
4.7
(5.3)
(0.6)
(0.4)
35.3
-
35.3
49.1
(10.0)
3.3
(5.2)
(1.9)
(1.0)
34.3
42.9
77.2
a
Borrowing costs of $7.1 million (2018: $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.
Net finance costs of $35.3 million were down 54.3% on the pcp predominately due to the US Private Placement
tender and reissue costs in FY2018.
40
THE STAR ENTERTAINMENT GROUP NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
A6 Dividends
Dividends per share
Interim dividend
Final dividend
Total dividend
89
2019
Cents per
share
2018
Cents per
share
10.5 b
10.0 c
20.5
7.5
13.0a
20.5
A final dividend per share of 10.0 cents fully franked was declared. The full year dividend totalling 20.5 cents
per share is equal to the pcp and in line with the dividend payout policy.
Dividends declared and paid during the year on ordinary shares
Final dividend paid during the year in respect of the year ended 30 June 2018 a
Interim dividend paid during the year in respect of the half year ended 31
December 2018 b
2019
$m
119.2
96.4
215.6
2018
$m
70.2
61.9
132.1
a A final dividend of 13.0 cents per share fully franked for the year ended 30 June 2018 (30 June 2017: 8.5 cents) was declared on
23 August 2018 and paid on 4 October 2018 (2017: declared on 22 August 2017 and paid on 26 September 2017).
b An interim dividend of 10.5 cents per share fully franked for the half year ended 31 December 2018 (31 December 2017: 7.5
cents) was declared on 20 February 2019 and paid on 3 April 2019 (2018: declared on 15 February 2018 and paid on 22 March
2018).
Dividends declared after balance date
Final dividend declared for the year ended 30 June 2019 c
2019
$m
2018
$m
91.7
119.3
c Since the end of the financial year, the Directors have declared a final dividend of 10.0 cents per ordinary share (2018: 13.0
cents), fully franked. The aggregate amount is expected to be paid on 26 September 2019 out of retained earnings at 30 June
2019, but not recognised as a liability at the end of the year.
Franking credit balance
Amount of franking credits available to shareholders
146.9
165.8
41
ANNUAL REPORT 2019 90
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
A7 Significant items
Profit before income tax (PBT) is stated after charging the following significant items:
Gain on Disposal a
Restructuring and redundancy costs b
Finance costs relating to US Private Placement tender and reissue c
Pre opening expenses d
Net significant items
Tax on significant items
Significant items net of tax
2019
$m
(9.7)
42.1
-
-
32.4
(14.0)
18.4
2018
$m
-
-
42.9
9.5
52.4
(15.7)
36.7
a
b
c
d
Gain on disposal of Gold Coast land to the Destination Gold Coast Consortium joint venture for construction of the first
residential, hotel and retail tower.
One-off restructuring and redundancy costs relating to Group reorganisation.
In August 2017, the Group completed a tender and reissue offer in relation to 73% of the Group's US Private Placement
borrowings. This was undertaken to extend the Group's tenor on average drawn debt maturity by 3 years to 5.2 years, reduce
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
one-off loss relating to the crystallisation of an existing obligation for the related out of the money interest rate swaps and other
costs.
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.
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:
− not in the ordinary course of business (for example, the cost of significant reorganisations or restructuring); or
− part of the ordinary activities of the business but unusual due to their size and nature (for example, impairment of
assets).
42
THE STAR ENTERTAINMENT GROUP NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
B Key balance sheet disclosures
Assets
B1 Cash and cash equivalents
Cash on hand and in banks
Short term deposits, maturing within 30 days
B2 Trade and other receivables
Trade receivables
Less provision for impairment
Net trade receivables
Other receivables
Past due not impaired receivables of $54.7 million were up from $28.7 million in the pcp.
(i) Provision for impairment reconciliation
Balance at beginning of year
Impairment of trade receivables a
Less amounts written off as uncollectible
Transition to AASB 9 opening adjustment
Balance at end of year
a These amounts are included in other expenses in the income statement (refer to note A3).
Trade receivables are non-interest bearing and are generally on 30 day terms.
(ii) Ageing of trade and other receivables
91
2018
$m
95.4
14.9
110.3
208.4
(16.0)
192.4
29.1
221.5
(14.0)
(7.6)
5.6
-
(16.0)
2019
$m
104.3
10.0
114.3
218.9
(11.3)
207.6
27.9
235.5
(16.0)
(5.5)
20.5
(10.3)
(11.3)
Trade receivables
2019
Not yet due
Past due not impaired
Considered impaired
2018
Not yet due
Past due not impaired
Considered impaired
0 - 30 days
$m
30 days - 1
year
$m
1 - 3 years
$m
Total
$m
152.9
-
2.8
155.7
163.7
0.5
1.0
165.2
-
44.5
1.3
45.8
-
17.8
0.6
18.4
-
10.2
7.2
17.4
-
10.4
14.4
24.8
152.9
54.7
11.3
218.9
163.7
28.7
16.0
208.4
43
ANNUAL REPORT 2019 92
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Other receivables
Other receivables are not past due or considered impaired. It is expected that these balances will be received as they
fall due.
The chart below compares the ageing of trade receivables and amounts considered impaired as at 30 June 2019 and
30 June 2018 respectively.
Impairment of trade receivables
The Group impairment analysis is performed at each reporting date using a provision matrix to measure expected
credit losses. The provision rates are based on days past due for groupings of various customer segments with similar
loss patterns by geographical region, product type, customer type and rating, and coverage by letters of credit or other
forms of credit insurance. The calculation reflects the probability-weighted outcome, reasonable and supportable
information that is available at the reporting date about past events, current conditions and forecasts of future
economic conditions.
44
THE STAR ENTERTAINMENT GROUP NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
B3 Derivative financial instruments
Current assets
Cross currency swaps
Forward currency contracts
Non current assets
Cross currency swaps
Current liabilities
Cross currency swaps
Interest rate swaps
Non current liabilities
Cross currency swaps
Interest rate swaps
Net financial assets
93
2019
$m
2018
$m
7.9
-
7.9
82.7
82.7
-
5.6
5.6
-
9.6
9.6
75.4
3.6
0.3
3.9
57.4
57.4
0.3
3.9
4.2
18.4
7.0
25.4
31.7
Net derivative assets up $43.7 million due to decline in the AUD/USD exchange rate and Bank Bill Swap Rate.
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
value of the instrument fluctuates on a daily basis and the actual amounts realised may differ materially from their
value at the balance sheet date.
Refer to note E2 for additional financial instruments disclosure.
45
ANNUAL REPORT 2019 94
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
B4 Property, plant and equipment
Freehold
and
leasehold
buildings
Freehold
land
Leasehold
improvements
Plant and
equipment
Note
$m
$m
$m
$m
Total
$m
2019
Cost
Opening balance at beginning of the year
Additions
Disposals
Reclassification / transfer
Closing balance at end of the year a
Accumulated depreciation
Opening balance at beginning of the year
Depreciation expense
Disposals / transfers
Closing balance at end of the year
Carrying Amount
Opening balance at beginning of the year
Closing balance at end of the year
2018
Cost
Opening balance at beginning of the year
Additions
Disposals
Reclassification / transfer b
A4
81.5
-
(4.5)
-
2,340.0
292.7
1,135.1
3,849.3
209.0
(1.6)
(17.5)
8.6
(4.8)
(3.3)
82.1
(22.9)
20.8
299.7
(33.8)
-
77.0
2,529.9
293.2
1,215.1
4,115.2
-
-
-
-
402.6
64.0
(0.8)
465.8
81.5
77.0
1,937.4
2,064.1
109.4
9.2
(4.8)
113.8
183.3
179.4
678.7
99.1
(22.0)
1,190.7
172.3
(27.6)
755.8
1,335.4
456.4
459.3
2,658.6
2,779.8
81.5
2,047.9
286.1
1,001.7
3,417.2
-
-
-
281.6
(1.5)
12.0
7.0
-
(0.4)
160.9
(18.7)
(8.8)
449.5
(20.2)
2.8
Closing balance at end of the year
81.5
2,340.0
292.7
1,135.1
3,849.3
Accumulated depreciation
Opening balance at beginning of the year
Depreciation expense
Disposals
Closing balance at end of the year
Carrying Amount
A4
-
-
-
-
341.6
63.7
(2.7)
402.6
98.7
10.7
-
616.4
80.8
(18.5)
1,056.7
155.2
(21.2)
109.4
678.7
1,190.7
Opening balance at beginning of the year
81.5
1,706.3
Closing balance at end of the year
81.5
1,937.4
187.4
183.3
385.3
2,360.5
456.4
2,658.6
a Includes capital works in progress of:
Buildings - at cost
Leasehold improvements - at cost
Plant and equipment - at cost
Total capital works in progress
2019
$m
140.2
6.9
46.5
193.6
2018
$m
40.7
3.0
147.2
190.9
b
Includes reclassifications of $2.8 million from intangibles to plant and equipment (refer to note B5).
Additions of $299.7 million, down 33.3% on the pcp consist predominantly of redevelopment works in the
Sydney property. For details on capital activities refer to section 2.6 of the Directors' Report.
46
THE STAR ENTERTAINMENT GROUP 95
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Property, plant and equipment is comprised of the following assets:
− Freehold land - Gold Coast property;
− Freehold and leasehold buildings - Brisbane, Gold Coast and Sydney properties;
− Leasehold improvements - Brisbane and Sydney properties; and
− Plant and equipment - operational and other equipment.
Asset useful lives and residual values
For the accounting policy on depreciation and useful lives of property, plant and equipment refer to note A4.
Capital works in progress
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.
Impairment
Refer to note B6 for details of the accounting policy and key assumptions included in the impairment calculation.
B5 Intangible assets
Sydney and
Brisbane
casino
licences
Sydney
casino
concessions
Goodwill
Software a
Note
$m
$m
$m
$m
Other
$m
Total
$m
2019
Cost
Opening balance at beginning of the year
Additions a
Disposals
1,442.2
294.7
100.0
-
-
-
-
-
-
229.8
34.2
(1.3)
20.1
2,086.8
-
-
34.2
(1.3)
Closing balance at end of the year
1,442.2
294.7
100.0
262.7
20.1
2,119.7
Accumulated amortisation
Opening balance at beginning of the year
Amortisation expense
A4
Disposals
Reclassification / transfer
Closing balance at end of the year
Carrying Amount
Opening balance at beginning of the year
Closing balance at end of the year
2018
Cost
Opening balance at beginning of the year
Additions
Disposals
Reclassification / transfer b
-
-
-
-
-
1,442.2
1,442.2
69.3
3.0
-
-
72.3
225.4
222.4
26.0
2.7
-
-
127.4
26.1
(1.3)
(0.8)
28.7
151.4
5.4
0.5
-
-
5.9
228.1
32.3
(1.3)
(0.8)
258.3
74.0
71.3
102.4
111.3
14.7
14.2
1,858.7
1,861.4
1,442.2
294.7
100.0
-
-
-
-
-
-
-
-
-
195.7
40.5
(3.6)
(2.8)
27.2
-
(7.1)
-
2,059.8
40.5
(10.7)
(2.8)
Closing balance at end of the year
1,442.2
294.7
100.0
229.8
20.1
2,086.8
Accumulated amortisation
Opening balance at beginning of the year
Amortisation expense
A4
Disposals
Closing balance at end of the year
Carrying Amount
Opening balance at beginning of the year
Closing balance at end of the year
-
-
-
-
1,442.2
1,442.2
66.1
3.2
-
69.3
228.6
225.4
23.1
2.9
-
26.0
76.9
74.0
108.6
22.4
(3.6)
127.4
87.1
102.4
10.2
2.3
(7.1)
208.0
30.8
(10.7)
5.4
228.1
17.0
14.7
1,851.8
1,858.7
a
b
Includes capital works in progress of $29.9 million (2018: $27.2 million).
Includes reclassifications of $2.8 million to property, plant and equipment (refer to note B4).
47
ANNUAL REPORT 2019 96
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Intangible asset additions relate predominantly to software as the Group progresses its strategic priority to
maximise value from technology, including further enhancing gaming and loyalty experience and delivering
new integrated IT platforms.
Asset useful lives and residual values
Intangible assets are amortised using the straight line method as follows:
− The Sydney casino licence is amortised from its date of issue until expiry in 2093.
− 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.
− The Brisbane casino licence is amortised over the remaining life of the lease to which the licence is linked, which
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
2022.
− Software is amortised over useful lives of 3 to 10 years.
− Other assets include the contribution to the construction costs of the state government owned Gold Coast
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.
Goodwill and impairment testing
Goodwill is assessed for impairment on an annual basis and is carried at cost less accumulated impairment losses.
Refer to note B6 for the accounting policy on asset impairment and details of key assumptions included in the
impairment testing calculation.
B6 Impairment testing and goodwill
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.
Carrying amount of goodwill allocated to each cash generating unit
Cash generating unit
(Reportable segment)
2019
2018
Sydney
$m
Gold Coast
$m
Brisbane
$m
1,013.5
1,013.5
165.5
165.5
263.2
263.2
Total carrying
amount
$m
1,442.2
1,442.2
The recoverable amount of each of the three cash generating units at year end (Sydney, Gold Coast and Brisbane) is
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
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% (2018: 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 8.8% (2018:
8.3% to 8.9%). The pre-tax discount rates range between 10.4% to 11.3% (2018: 10.2% to 11.0%).
No impairment was recognised in any of the cash generating units at 30 June 2019 (2018: nil). The performance of the
Group was driven by growth in the domestic business revenue (+3.1%). The International VIP Rebate Business (IRB)
had mixed results, with a high win rate partially offset by reduced turnover.
Key assumptions
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
disposal' are as follows:
i. Cash flow forecasts
The cash flow forecasts are based upon Board approved business plans for a five-year period, together with longer
term projections, growth rates and approved capital investment plans for each cash generating unit.
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).
iii. Discount rates
Discount rates applied are based on the post tax weighted average cost of capital applicable to the relevant cash
generating unit.
48
THE STAR ENTERTAINMENT GROUP 97
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
iv. Regulatory changes
Brisbane
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.
The Group currently holds a perpetual casino licence in Brisbane that is attached to the lease of the current Brisbane
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
25 years.
The Group will surrender the Brisbane casino licence in exchange for the right to operate the new QWB casino.
Gold Coast
The Star continues to participate in the Queensland Governmentʼs process in relation to a global tourism hub on the
Gold Coast. The Star has been invited into the second stage of the process to provide an expression of interest for the
Gold Coast tourism hub.
Sydney
On 8 July 2014, Liquor and Gaming NSW issued a restricted gaming licence to Crown Resorts Limited (Crown) to
operate a restricted gaming facility at Barangaroo South, Crown Sydney Hotel Resort (Crown Sydney). On 28 June
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
impact of Crown Sydney has been taken into consideration in determining the recoverable amount of Sydney's cash
generating unit at 30 June 2019. As further details of the final scope and timing of the proposed gaming facility
become known, management will continue to consider the impact that this may have on the cash generating unit's
carrying value.
v. Sensitivities
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
its recoverable value, requiring an impairment charge to be recognised.
For the Gold Coast, management considers that a 2% reduction in the expected growth rate is a reasonably possible
change that could give rise to a potential impairment.
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
increase in market size. A reasonably possible change in any of the assumptions used does not result in an
impairment charge at 30 June 2019. However, management will continue to monitor the assumptions with regards to
the expected impact of Crown Sydney on Sydney's carrying value.
Impairment of assets
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
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.
49
ANNUAL REPORT 2019 98
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Liabilities
B7 Interest bearing liabilities
Current
Bank loans - unsecured (net of unamortised borrowing costs) (i)
Private placement - US dollar - amortised cost (ii)
Non current
Bank loans - unsecured (net of unamortised borrowing costs) (i)
Private placement - US dollar (ii)
2019
$m
191.3
5.1
196.4
322.6
643.3
965.9
2018
$m
128.7
5.1
133.8
88.3
597.9
686.2
The Group successfully refinanced its bank facilities on 3 July 2019, with new bilateral bank facilities replacing
all Syndicate Bank Facilities, which have been repaid and cancelled. The new bilateral facilities have a total
limit of $1.2 billion (increased from $0.8 billion of bank facilities at 30 June 2019). The new facilities have
maturities of between three and five years (compared to one month to five years), increasing the weighted
average maturity of the Group's debt facilities from 3.8 to 5.3 years. Refer to note C3.
Net debt was $972.6 million, up 43.5% on the pcp with gearing levels increased to 1.9x at 30 June 2019
compared to 1.4x at 30 June 2018.
Refer to note F9 (iii) for Capital management disclosures and the calculation of the gearing ratio.
(i) Bank loans - unsecured (net of unamortised borrowing costs)
Interest on bank facilities is variable, linked to Bank Bill Swap Bid Rate (BBSY), plus a margin tiered against the
reported gearing ratio at the end of certain test dates.
Syndicated revolving facility
The Group has drawn down $382.0 million of the syndicated revolving facility (SFA).
2019
Unutilised at 30 June
Type
Syndicated revolving facility - tranche A
Syndicated revolving facility - tranche B
Syndicated revolving facility - tranche C
Syndicated revolving facility - tranche D
2018
Type
Syndicated revolving facility - tranche A
Syndicated revolving facility - tranche B
Syndicated revolving facility - tranche C
Syndicated revolving facility - tranche D
Working capital facility
2019
Type
Working capital facility
Facility amount
$m
$m
Maturity date
100.0
250.0
100.0
200.0
650.0
-
58.0
10.0
200.0
268.0
Facility amount
$m
Unutilised at 30 June
$m
100.0
250.0
100.0
200.0
650.0
10.0
250.0
100.0
200.0
560.0
July 2021
July 2019
July 2022
July 2023
Maturity date
July 2021
July 2019
July 2022
July 2023
Facility amount
$m
150.0
Unutilised at 30 June
$m
16.0
Maturity date
July 2020
50
THE STAR ENTERTAINMENT GROUP 99
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
2018
Type
Working capital facility
Facility amount
$m
Unutilised at 30 June
$m
150.0
20.0
Maturity date
January 2019
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
to fixed rate borrowings. Further details about the Group's exposure to interest rate movements are provided in notes
E1 and E2.
(ii) US Private Placement (USPP)
The Group's USPP borrowings are summarised below.
2019
Type
Series B
Series C
Series D
Series E
Series F
Series G
Series H
2018
Type
Series B
Series C
Series D
Series E
Series F
Series G
Series H
$m USD
$m (AUD)
Maturity date
105.0
9.0
12.5
10.0
60.0
31.0
215.9
443.4
98.1
11.5
16.0
12.8
76.9
39.7
276.5
531.5
June 2021
August 2025
August 2027
August 2025
August 2027
August 2025
August 2027
$m USD
$m (AUD)
Maturity date
105.0
9.0
12.5
10.0
60.0
31.0
215.9
443.4
98.1
11.5
16.0
12.8
76.9
39.7
276.5
531.5
June 2021
August 2025
August 2027
August 2025
August 2027
August 2025
August 2027
The $531.5 million (2018: $531.5 million) USPP borrowings are stated in the table above at the AUD amount repayable
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 US$443.4 million (2018: US$443.4
million) translated at 30 June 2019 spot rate is $632.3 million AUD (2018: $598.8 million).
Fair value disclosures
Details of the fair value of the Group's interest bearing liabilities are set out in note E2.
Financial Risk Management
As a result of the USPP borrowings, the Group is exposed to foreign currency risk through the movements in
USD/AUD exchange rate. The Group has entered into cross currency swaps in order to hedge this exposure. As at 30
June 2019, 100% of the USPP borrowings balance of US$443.4 million (2018: US$443.4 million) is hedged.
The Group is also exposed to the interest rate risk as a result of bank loans and the USPP borrowings. To hedge
against this risk, the Group has entered into interest rate swaps. As at 30 June 2019, 38.8% (2018: 56.2%) of interest
bearing liabilities had been hedged. Further details about the Group's exposure to interest rate and foreign currency
movements are provided in notes E1 and E2.
51
ANNUAL REPORT 2019 100
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
C Commitments, contingencies and subsequent events
C1 Commitments
(i) Operating lease commitments a
Not later than one year
Later than one year but not later than five years
Later than five years
2019
$m
9.2
43.7
90.2
2018
$m
10.4
29.0
97.0
143.1
136.4
a The Group leases property (including Sydney and Brisbane property leases) under operating leases expiring between 1 to 74
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.
(ii) Other commitments b
Not later than one year
Later than one year but not later than five years
Later than five years
116.2
-
-
116.2
64.3
1.3
-
65.6
b Other commitments as at 30 June 2019 mainly include capital construction and related costs in connection with the Sydney
redevelopment.
The Group has current capital commitments of approximately $1.0 billion in Destination Brisbane Consortium and $0.1
billion in Destination Gold Coast Consortium to fund the construction of the Integrated Resort which is expected to
open in 2022 (subject to various approvals) and the new residential and hotel tower on the Gold Coast respectively.
Refer to note D5 for commitments in respect of investment in associate and joint venture entities.
C2 Contingent liabilities
Legal challenges
There are outstanding legal actions between the Company and its controlled entities and third parties as at 30 June
2019. The Group has notified its insurance carrier of all relevant litigation and believes that any damages (other than
exemplary damages) that may be awarded against the Group, in addition to its costs incurred in connection with the
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
provided for.
Financial guarantees
Refer to note E1 for details of financial guarantees provided by the Group at the reporting date.
C3 Subsequent events
On 3 July 2019, the Company successfully refinanced its bank facilities, with new bilateral bank facilities replacing all
Syndicated Bank Facilities, which have been repaid and cancelled.
The new bilateral facilities have a total limit of $1.2 billion (increased from $0.8 billion of bank facilities at 30 June
2019). The new facilities have maturities of between three and five years (compared to one month to five years),
increasing the weighted average maturity of the company's debt facilities from 3.8 to 5.3 years. Unamortised
borrowing costs of $1.7 million associated with the existing facilities will be expensed to the income statement in July
2019.
On 25 July 2019, the NSW Government Department of Planning, Industry and Environment recommended against the
proposed construction of The Ritz-Carlton Hotel and Residences in Sydney. The Star continues to seek approval for
the development from the NSW Government Independent Planning Commission, which is the decision making
authority.
Other than those events disclosed in the Directors' Report or elsewhere in these financial statements, there have been
no other significant events occurring after the balance sheet date and up to the date of this report, which may
materially affect either the Group's operations or results of those operations or the Group's state of affairs.
52
THE STAR ENTERTAINMENT GROUP 101
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
D Group structure
D1 Related party disclosures
(i) Parent entity
(ii)
The ultimate parent entity within the Group is The Star Entertainment Group Limited.
Investments in controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following controlled entities in
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).
Name of controlled entity
Parent entity
The Star Entertainment Group Limited
Controlled entities
The Star Entertainment Sydney Holdings Limited
The Star Pty Limited
The Star Entertainment Pty Ltd
The Star Entertainment Sydney Properties Pty Ltd
The Star Entertainment Sydney Apartments Pty Ltd
Star City Investments Pty Limited
Star City Share Plan Company Pty Ltd
The Star Entertainment QLD Limited
The Star Entertainment QLD Custodian Pty Ltd
The Star Entertainment Gold Coast Trust
The Star Entertainment International No.1 Pty Ltd
The Star Entertainment International No.2 Pty Ltd
The Star Entertainment (Macau) Limited
The Star Entertainment International No.3 Pty Ltd
EEI Services (Hong Kong) Holdings Limited
EEI Services (Hong Kong) Limited
EEI C&C Services Pte Ltd
The Star Entertainment RTO Pty Ltd
The Star Entertainment Finance Limited
Destination Cairns Consortium Pty Limited
e
The Star Entertainment Technology Services Pty Ltd
The Star Entertainment Training Company Pty Ltd
PPIT Pty Ltd
The Star Entertainment International No.4 Pty Ltd
The Star Entertainment Online Holdings Pty Ltd
The Star Entertainment Online Pty Ltd
The Star Entertainment Brisbane Holdings Pty Ltd
The Star Entertainment Brisbane Operations Pty Ltd
The Star Entertainment DBC Holdings Pty Ltd
The Star Brisbane Car Park Holdings Pty Ltd
The Star Entertainment Gold Coast Holdings Pty Ltd
The Star Entertainment GC Investments Pty Ltd
The Star Entertainment GC Investments No.1 Pty Ltd
The Star Entertainment International No.5 Pty Ltd
EEI Services Holdings No.1 Pty Ltd
EEI Services Holdings No.2 Pty Ltd
EEI Services (Macau) Limited
The Star Entertainment International Tourism Pty Ltd
Note
Country of
incorporation Equity type
Australia
ordinary shares
a b
a b
a
a b
a
a
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Macau
Australia
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
units
ordinary shares
ordinary shares
ordinary shares
ordinary shares
Hong Kong
ordinary shares
Hong Kong
ordinary shares
Singapore
ordinary shares
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Macau
Australia
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
ordinary shares
Equity
interest at
30 June
2019
%
Equity
interest at
30 June
2018
%
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
53
ANNUAL REPORT 2019 102
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Name of controlled entity
Note
Country of
incorporation Equity type
Equity
interest at
30 June
2019
%
Equity
interest at
30 June
2018
%
Destination Sydney Consortium Pty Limited
The Star Entertainment Pyrmont Investments No.1 Pty Ltd
The Star Entertainment GC No.1 Pty Ltd
c e
c
d
The Star Entertainment GC No.2 Pty Ltd
d
The Star Entertainment Group Limited Employee Share Trust f
Australia
Australia
Australia
Australia
Australia
ordinary shares
ordinary shares
ordinary shares
ordinary shares
units
100.0
100.0
100.0
100.0
0.0
0.0
0.0
0.0
0.0
0.0
a These companies entered into a deed of cross guarantee with The Star Entertainment Sydney Holdings Limited on 31 May 2011,
and as such are members of the closed group as defined in Australian Securities and Investments Commission Instrument
2016/785 (refer to note D3).
b These companies have provided a charge over their assets and undertakings as explained in note E1.
c
Incorporated on 10 October 2018
Incorporated on 18 April 2019
d
e The following entities changed their company name on 5 April 2019:
- Destination Cairns Consortium Pty Limited was previously known as The Star Entertainment International Pty Ltd
- Destination Sydney Consortium Pty Limited was previously known as The Star Entertainment Pyrmont Holdings Pty Ltd
f
Formed on 11 September 2018
(iii) Transactions with controlled entities
The Star Entertainment Group Limited
During the period, the Company entered into the following transactions with controlled entities:
− loans of $46.5 million were repaid by controlled entities (2018: the Company advanced loans of $602.6 million);
and
− income tax and GST paid on behalf of controlled entities was $211.6 million (2018: $230.3 million).
The amount receivable by the Company from controlled entities at year end is $835.8 million (2018: $882.3 million). All
the transactions were undertaken on normal commercial terms and conditions.
(iv) Transactions with other related parties
Other transactions
During the period, in addition to equity contributions (refer to note D5), the Group entered into the following
transactions with related parties:
− Amount recharged to Destination Brisbane Consortium Integrated Resort Holdings Pty Ltd was nil (2018: $0.3
million);
− Amount paid to Destination Brisbane Consortium Integrated Resort Holdings Pty Ltd was $0.1 million (2018: nil)
relating to capital works;
− Amount recharged to Destination Gold Coast Consortium Pty Ltd was $1.9 million (2018: $8.3 million), of which
$0.1 million (2018: $4.7 million) was held as a receivable at 30 June 2019; and
− Amount paid to Destination Gold Coast Consortium Pty Ltd was $3.4 million (2018: nil) relating to capital works.
54
THE STAR ENTERTAINMENT GROUP 103
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
D2 Parent entity disclosures
The Star Entertainment Group Limited, the parent entity of the Group, was incorporated on 2 March 2011.
Result of the parent entity
Profit for the year
Total comprehensive income for the year a
2019
$m
158.5
158.5
2018
$m
263.2
263.2
a
Since the end of the financial year, the Company has declared a final dividend of 10.0 cents per ordinary share (2018: 13.0
cents), which is expected to be paid to its shareholders on 26 September 2019 out of retained earnings at 30 June 2019 (refer to
note A6).
Financial position of the parent entity
Current assets
Non current assets
Total assets
Current liabilities
Non current liabilities
Total liabilities
Net assets
Total equity of the parent entity
Issued capital
Retained earnings
Shared based payments benefits reserve
Total equity
1,865.8
2,590.3
4,456.1
34.5
1,034.0
1,068.5
1,912.3
2,590.1
4,502.4
22.3
1,031.4
1,053.7
3,387.6
3,448.7
3,069.7
311.2
6.7
3,387.6
3,070.2
368.4
10.1
3,448.7
Contingent liabilities
There were no contingent liabilities for the parent entity at 30 June 2019 (2018: nil).
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 2019 (2018: nil).
Guarantees
The Star Entertainment Group Limited has guaranteed the liabilities of The Star Entertainment Finance Limited and
The Star Entertainment International No.3 Pty Ltd. As at 30 June 2019, the carrying amount included in current
liabilities at 30 June 2019 was nil (2018: nil), and the maximum amount of these guarantees was $121.9 million (2018:
$118.3 million) (refer to note E1). The Company has also undertaken to support its controlled entities when necessary
to enable them to pay their debts as and when they fall due.
Accounting policy for investments in controlled entities
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.
55
ANNUAL REPORT 2019 104
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
D3 Deed of cross guarantee
The Star Entertainment Sydney Holdings Limited, The Star Pty Limited, The Star Entertainment Pty Ltd, The Star
Entertainment Sydney Properties Pty Ltd, The Star Entertainment Sydney Apartments Pty Ltd and Star City
Investments Pty Limited are parties to a deed of cross guarantee under which each company guarantees the debts of
the others. By entering into the deed, the wholly-owned entities have been relieved from the requirements to prepare a
Financial Report and Directors' Report under Instrument 2016/785 issued by the Australian Securities and Investments
Commission.
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
to the deed of cross guarantee that are controlled by The Star Entertainment Sydney Holdings Limited, they also
represent the 'extended closed group'.
Set out below is a consolidated income statement and a summary of movements in consolidated retained earnings for
the year ended 30 June 2019 of the closed group.
Consolidated income statement
Revenue
Other income
Government taxes and levies
Employment costs
Depreciation, amortisation and impairment
Cost of sales
Property costs
Advertising and promotions
Other expenses
Earnings before interest and tax (EBIT)
Net finance costs
Profit before income tax (PBT)
Income tax expense
Net profit after tax (NPAT)
Total comprehensive income for the period
2019
$m
1,321.9
0.6
(360.0)
(351.6)
(100.8)
(51.0)
(46.1)
(62.4)
(188.8)
161.8
11.3
173.1
(54.8)
118.3
118.3
2018*
Restated
$m
1,325.5
(0.2)
(368.9)
(349.5)
(103.7)
(50.6)
(48.1)
(73.4)
(209.9)
121.2
-
121.2
(37.1)
84.1
84.1
* 2018 comparatives have been restated as part of the transition to AASB 15 Revenue from Contracts. Refer to note G(i) for further
information.
Summary of movements in consolidated retained earnings
Accumulated profit/(loss) at the beginning of the financial year
Profit for the year
Transition to AASB 9 adjustment
Dividends paid
Accumulated profit at the end of the financial year
23.1
118.3
(6.8)
(81.0)
53.6
130.0
84.1
-
(191.0)
23.1
Consolidated balance sheet
Set out below is a consolidated balance sheet as at 30 June 2019 of the closed group consisting of The Star
Entertainment Sydney Holdings Limited, The Star Pty Limited, The Star Entertainment Pty Ltd, The Star Entertainment
Sydney Properties Pty Limited, The Star Entertainment Sydney Apartments Pty Limited, and Star City Investments Pty
Limited.
56
THE STAR ENTERTAINMENT GROUP NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Consolidated balance sheet
ASSETS
Cash assets
Trade and other receivables
Inventories
Other
Total current assets
Property, plant and equipment
Intangible assets
Other assets
Total non current assets
TOTAL ASSETS
LIABILITIES
Trade and other payables
Provisions
Other liabilities
Total current liabilities
Deferred tax liabilities
Provisions
Total non current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Retained Earnings
TOTAL EQUITY
D4 Key Management Personnel disclosures
Compensation of Key Management Personnel
Short term
Long term
Share based payments
Total compensation
105
2019
$m
2018
$m
48.9
176.6
8.8
27.7
262.0
1,460.9
278.6
10.3
1,749.8
2,011.8
713.9
35.1
10.1
759.1
54.9
4.3
59.2
52.7
190.9
8.5
26.2
278.3
1,341.4
281.1
11.1
1,633.6
1,911.9
647.3
34.8
11.3
693.4
51.3
4.2
55.5
818.3
748.9
1,193.5
1,163.0
1,139.9
53.6
1,193.5
2019
$000
6,047
314
779
7,140
1,139.9
23.1
1,163.0
2018
$000
7,842
334
2,973
11,149
The above reflects the compensation for individuals who are Key Management Personnel of the Group. The note
should be read in conjunction with the Remuneration Report.
57
ANNUAL REPORT 2019 106
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
D5 Investment in associate and joint venture entities
Set out below are the investments of the Group as at 30 June 2019 which, in the opinion of the Directors, are material
to the Group. The entities listed below have share capital consisting solely of ordinary shares, which are held by the
Group. The country of incorporation is also their principal place of business, and the proportion of ownership interest is
the same as the proportion of voting rights held.
2019
Name of entity
Destination Brisbane Consortium Integrated Resort
Holdings Pty Ltd (i)
Festival Car Park Pty Ltd (ii)
Destination Gold Coast Investments Pty Ltd (iii)
Destination Gold Coast Consortium Pty Ltd (iv)
Total equity accounted investments
Country of
incorporation
% of
ownership
Nature of
ownership
Measurement
method
Australia
Australia
Australia
Australia
50
50
50
Associate
Equity method
Joint venture
Equity method
Joint venture
Equity method
33.3
Joint venture
Equity method
Carrying
amount
$m
312.9
14.3
45.6
12.2
385.0
(i) Destination Brisbane Consortium Integrated Resort Holdings Pty Ltd
The Group has partnered with Hong Kong-based organisations Chow Tai Fook Enterprises Limited (CTF) and Far East
Consortium International Limited (FEC) to form Destination Brisbane Consortium (DBC) for the Queenʼs Wharf
Brisbane Project. The parties have formed two vehicles (the Integrated Resort Joint Venture and the Residential Joint
Venture), which together are responsible for completing the Queenʼs Wharf Brisbane project.
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
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 components of the broader Queenʼs Wharf Brisbane
development. The Group is not a party to the residential apartments development joint venture.30 June 2019
Commitments and contingent liabilities
DBC has current capital commitments of approximately $2.0 billion (2018: $2.2 billion) to fund the construction of the
Integrated Resort, which is expected to open in 2022 (subject to various approvals).
Summarised financial information
The financial statements of the associate is prepared for the same reporting period as the Group and follow the same
accounting policies of the Group.
Balance sheet
Total current assets
Total non current assets
Total current liabilities
Total non current liabilities
Net assets
Reconciliation to investment carrying amount:
Carrying amount at the beginning of the year
Share of equity contributions for the Group
Share of loss for the period
Carrying amount at the end of the year
2019
$m
139.0
564.5
(39.3)
(52.8)
611.4
223.7
90.0
(0.8)
312.9
2018
$m
112.1
423.2
(17.4)
(75.0)
442.9
152.6
72.2
(1.1)
223.7
58
THE STAR ENTERTAINMENT GROUP NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Income statement
Loss before tax
Income tax benefit
Loss for the year (continuing operations)
Total comprehensive loss for the year (continuing operations)
Group's share of loss for the year
Dividends received from the associate entity
(ii) Festival Car Park Pty Ltd
107
2019
$m
(1.5)
-
(1.5)
(1.5)
(0.8)
-
2018
$m
(2.2)
-
(2.2)
(2.2)
(1.1)
-
The Group has a 50% interest in Festival Car Park Pty Ltd, a joint venture that operates the Festival Car Park on
Charlotte Street in Brisbane. This is a joint venture with CTF and FEC.
Commitments and contingent liabilities
The joint venture had no capital commitments as at 30 June 2019 (2018: $0.1 million). There were no other contingent
liabilities.
Summarised financial information
The financial statements of the joint venture are prepared on financial information that is unaudited and prepared for
reporting purposes. The joint venture has a financial year end date of 31 March.
Balance sheet
Cash and cash equivalents
Total current assets excluding cash and cash equivalents
Total non current assets
Total current liabilities
Total non current liabilities - financial liabilities
Net assets
Reconciliation to investment carrying amount:
Carrying amount at the beginning of the year
Share of profit for the period
Carrying amount at the end of the year
Income statement
Revenue
Interest expense
Other expenses
Profit before tax
Income tax expense
Profit for the year (continuing operations)
Total comprehensive income for the year (continuing operations)
Group's share of profit for the year
2019
$m
3.3
-
48.4
(0.3)
(22.5)
28.9
13.8
0.5
14.3
3.3
(0.7)
(1.3)
1.3
(0.4)
0.9
0.9
0.5
2018
$m
2.7
0.1
48.3
(0.6)
(22.5)
28.0
13.5
0.3
13.8
3.4
(0.7)
(1.3)
1.4
(0.4)
1.0
1.0
0.3
59
ANNUAL REPORT 2019 108
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
(iii) Destination Gold Coast Investments Pty Ltd
On 20 October 2016, a 50% interest was acquired in Destination Gold Coast Investments Pty Ltd (DGCI). DGCI is a
joint venture with CTF and FEC involved in the operation of the Sheraton Grand Mirage Resort, Gold Coast. The
Group's interest is accounted for using the equity method.
The Securityholdersʼ Deed for Destination Gold Coast Investments Pty Ltd requires unanimous consent for each Board
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
investment has therefore been classified as a joint venture.
Commitments and contingent liabilities
The joint venture had no capital commitments as at 30 June 2019 (2018: $0.3 million). There were no other contingent
liabilities.
Summarised financial information
The financial statements of the joint venture are prepared for the same reporting period as the Group and follow the
same accounting policies of the Group.
Balance sheet
Cash and cash equivalents
Total current assets excluding cash and cash equivalents
Total non current assets
Total current liabilities
Total non current liabilities - financial liabilities
Other non current liabilities
Net assets
Reconciliation to investment carrying amount:
Carrying amount at the beginning of the year
Share of profit for the period
Share of equity contributions for the Group
Carrying amount at the end of the year
Income statement
Revenue
Interest expense
Depreciation expense
Operating expenses
Profit before tax
Income tax expense
Profit for the year (continuing operations)
Total comprehensive income for the year (continuing operations)
Group's share of profit for the year
2019
$m
12.8
0.9
171.9
(10.7)
(72.4)
(14.5)
88.0
44.6
1.0
-
45.6
45.1
(2.6)
(3.2)
(36.9)
2.4
(0.4)
2.0
2.0
1.0
2018
$m
11.1
4.4
173.6
(12.4)
(72.2)
(15.1)
89.4
46.3
2.4
(4.1)
44.6
47.0
(1.8)
(3.1)
(36.4)
5.7
(0.9)
4.8
4.8
2.4
60
THE STAR ENTERTAINMENT GROUP 109
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
(iv) Destination Gold Coast Consortium Pty Ltd
On 22 November 2016, a 33.3% interest was acquired in Destination Gold Coast Consortium Pty Ltd (DGCC). DGCC
is a joint venture with CTF and FEC for the purpose of constructing a new residential and hotel tower in Gold Coast.
The Group's interest is accounted for using the equity method.
Commitments and contingent liabilities
On 16 August 2018, DGCC entered in to an agreement to commence construction in relation to the first residential,
hotel and retail tower in Gold Coast. DGCC's total commitments for the development of the tower is $370.0 million, 8%
lower than initial expectations. The joint venture had no capital commitments as at 30 June 2019.
Summarised financial information
The financial statements of the joint venture are prepared for the same reporting period as the Group and follow the
same accounting polices of the Group.
Balance sheet
Cash and cash equivalents
Total current assets excluding cash and cash equivalents
Total non current assets
Total current liabilities
Total non current liabilities
Net assets
Reconciliation to investment carrying amounts:
Carrying amount at the beginning of the year
Share of loss for the period
Share of equity contributions for the Group
Elimination of gain on sale of land
Carrying amount at the end of the year
Income statement
Loss before tax
Income tax benefit
Loss for the year (continuing operations)
Total comprehensive loss for the year (continuing operations)
Group's share of loss for the year
2019
$m
6.5
0.5
61.3
(4.1)
(28.2)
36.0
6.8
(1.4)
15.3
(8.5)
12.2
(4.1)
-
(4.1)
(4.1)
(1.4)
2018
$m
4.5
0.6
22.7
(7.3)
-
20.5
-
(1.7)
8.5
-
6.8
(5.1)
-
(5.1)
(5.1)
(1.7)
61
ANNUAL REPORT 2019 110
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
E Risk Management
E1 Financial risk management objectives and policies
The Group's principal financial instruments, other than derivatives, comprise cash, short term deposits, bank bills,
Australian denominated bank loans, and foreign currency denominated notes.
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
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
Group's operations and sources of finance.
The Group's risk management policy is carried out by the Corporate Treasury function under the Group Treasury
Policy approved by the Board. Corporate Treasury reports regularly to the Board on the Group's risk management
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.
The main risks arising from the Group's financial instruments are interest rate risk, foreign currency risk, credit risk and
liquidity risk.
Details of significant accounting policies and methods adopted, including criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument, are disclosed in note G.
Interest rate risk
The Group manages interest rate risk by using a floating versus fixed rate debt framework. The relative mix of fixed
and floating interest rate funding is managed by using interest rate swap contracts. The Group manages its cash flow
interest rate risk by using floating-to-fixed interest rate swap contracts.
At 30 June 2019 after taking into account the effect of interest rate swaps, approximately 38.8% (2018: 56.2%) of the
Group's borrowings are at a fixed rate of interest.
Foreign currency risk
As a result of issuing private notes denominated in US Dollars (USD), the Group's balance sheet can be affected by
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
amount for an agreed Australian Dollar (AUD) amount with swap counterparties, and re-exchange this again at
maturity. These swaps are designated to hedge the principal and interest obligations under the private notes.
Credit risk
Credit risk on financial assets which have been recognised on the balance sheet, is the carrying amount less any
allowance for non recovery. The Group minimises credit risk via adherence to a strict credit risk management policy.
Collateral is not held as security.
Customer credit risk
Credit risk in trade receivables is managed in the following ways:
− The provision of cheque cashing facilities for casino gaming patrons is subject to detailed policies and procedures
designed to minimise any potential loss, including the use of a central credit agency which collates information from
the major casinos around the world; and
− The provision of non gaming credit is covered by a risk assessment process for customers using the Credit
Reference Association of Australia, bank opinions and trade references.
Receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is
carefully managed and controlled.
Financial institution credit risk
Credit risk arising from other financial assets of the Group, which comprise cash, cash equivalents and derivative
contracts, is reduced by transacting with relationship banks that have acceptable credit ratings, as determined by a
recognised ratings agency.
Cash investments, derivative financial instruments, bank guarantees, and other contingent instruments create credit
risk in relation to the relevant counterparties, which are principally large relationship banks.
The maximum counterparty credit exposure on forward currency and cross currency swaps is the fair value amount
that the Group receives when settlement occurs, should the counterparty fail to pay the amount which it has committed
to pay the Group. The credit risk on interest rate hedges is limited to the positive mark to market amount to be received
from counterparties over the life of contracts that are favourable to the Group. The Group's maximum credit risk
exposure in respect of interest rate swap contracts, cross currency swap contracts and forward currency contracts is
detailed in note E2.
62
THE STAR ENTERTAINMENT GROUP 111
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Credit risk includes liabilities under financial guarantees
For financial guarantee contract liabilities, the fair value at initial recognition is determined using a probability weighted
discounted cash flow approach. The fair value of financial guarantee contract liabilities has been assessed as nil
(2018: nil), as the possibility of an outflow occurring is considered remote. Details of the financial guarantee contracts
in the balance sheet are outlined below.
Fixed and floating charges
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
obligations which they have to Liquor and Gaming NSW.
Guarantees and indemnities
The controlled entities denoted (b) in note D1 have entered into a guarantee and indemnity agreement in favour of
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
and guarantees given.
The Star Entertainment Finance Limited and The Star Entertainment International No. 3 Pty Ltd are called upon to give
in the ordinary course of business, guarantees and indemnities in respect of the performance of their contractual and
financial obligations. The maximum amount of these guarantees and indemnities is $121.9 million (2018: $118.3
million).
Liquidity risk
Liquidity risk arises from the financial liabilities of the Group and the Group's subsequent ability to meet its obligations
to repay its financial liabilities as and when they fall due.
The Group manages liquidity risk through maintaining sufficient cash and adequate amount of committed credit
facilities to be held above the forecast requirements of the business. The Group manages liquidity risk centrally by
monitoring cash flow forecasts and maintaining adequate cash reserves and debt facilities. The debt portfolio is
periodically reviewed to ensure there is funding flexibility across an appropriate maturity profile.
Refer to notes B7 and E2 for maturity of financial liabilities.
The contractual timing of cash flows on derivatives and non-derivative financial assets and liabilities at the reporting
date, including drawn borrowings and estimated interest, are set out in the tables below:
(i) Non-derivative financial instruments
Financial assets
Cash assets
Short term deposits
Trade and other receivables
Financial liabilities
Trade and other payables
Bank loans - unsecured
Private placement - US dollar
2019
2018
< 1 year
$m
1 - 5 years
$m
> 5 years
$m
< 1 year
$m
1 - 5 years
$m
> 5 years
$m
104.3
10.0
235.5
349.8
338.3
201.6
33.5
573.4
-
-
-
-
-
-
-
-
-
335.4
191.1
526.5
-
-
490.4
490.4
95.4
14.9
221.5
331.8
363.3
132.3
32.9
528.5
-
-
-
-
-
-
-
-
-
99.8
246.4
346.2
-
-
531.5
531.5
Net outflow
(223.6)
(526.5)
(490.4)
(196.7)
(346.2)
(531.5)
63
ANNUAL REPORT 2019 112
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
(ii) Derivative financial instruments
2019
2018
< 1 year
$m
1 - 5 years
$m
> 5 years
$m
< 1 year
$m
1 - 5 years
$m
> 5 years
$m
Financial assets
Interest rate swaps - receive AUD floating
Cross currency swaps - receive USD fixed
Forward currency contract - receive USD
fixed
Financial liabilities
Interest rate swaps - pay AUD fixed
Cross currency swaps - pay AUD floating
Cross currency swaps - pay AUD fixed
Forward currency contract - pay AUD
fixed
Net inflow/(outflow)
2.4
33.5
-
5.3
191.1
-
490.4
-
-
35.9
196.4
490.4
13.9
137.5
54.2
-
231.5
266.8
-
-
205.6
498.3
8.4
13.1
13.6
-
35.1
0.8
4.2
32.9
1.2
38.3
8.4
15.7
13.5
0.9
38.5
12.5
246.4
1.9
531.5
-
-
258.9
533.4
21.3
144.9
54.2
-
220.4
38.5
2.4
235.0
280.3
-
517.7
15.7
(9.2)
(7.9)
(0.2)
For floating rate instruments, the amount disclosed is determined by reference to the interest rate at the last repricing
date. For foreign currency receipts and payments, the amount disclosed is determined by reference to the AUD/USD
rate at balance sheet date.
(iii) Financial instruments - sensitivity analysis
Interest rates - AUD and USD
The following sensitivity analysis is based on interest rate risk exposures in existence at year end.
At 30 June, if interest rates had 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:
2019
AUD
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
USD
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
2018
AUD
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
USD
+ 0.5% (50 basis points)
- 0.50% (50 basis points)
Net profit after tax
higher/(lower)
$m
Other
comprehensive
income
higher/(lower)
$m
(1.6)
1.6
-
-
(1.0)
1.0
-
-
12.9
(13.3)
(11.2)
11.7
12.8
(13.3)
(20.7)
21.6
64
THE STAR ENTERTAINMENT GROUP 113
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
The movements in profit are due to higher/lower interest costs from variable rate debt and investments. The movement
in other comprehensive income is due to an increase/decrease in the fair value of financial instruments designated as
cash flow hedges.
The numbers derived in the sensitivity analysis are indicative only.
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
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;
− price sensitivity of derivatives is based on a reasonably possible movement of spot rates at the balance sheet
dates; and
− the net exposure at the balance sheet date is representative of what the Group was, and is expecting to be,
exposed to in the next twelve months.
Foreign Exchange
The following sensitivity analysis is based on foreign currency risk exposures in existence at the balance sheet date. At
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:
Judgements of reasonably possible movements:
Net profit after tax
higher/(lower)
Other
comprehensive
income
higher/(lower)
Net profit after tax
higher/(lower)
Other
comprehensive
income
higher/(lower)
2019
$m
-
-
2019
$m
(17.0)
16.4
2018
$m
-
-
2018
$m
(11.1)
14.6
AUD/USD + 10 cents
AUD/USD - 10 cents
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
designated as cash flow hedges. Management believes the balance sheet date risk exposures are representative of
the risk exposure inherent in the financial instruments. The numbers derived in the sensitivity analysis are indicative
only.
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
years' historical movements and economic forecaster's expectations;
− the reasonably possible movement of 10 cents was calculated by taking the USD spot rate as at balance sheet
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;
− price sensitivity of derivatives is based on a reasonably possible movement of spot rates at the balance sheet
dates; and
− the net exposure at the balance sheet date is representative of what the Group was, and is expecting to be,
exposed to in the next twelve months.
65
ANNUAL REPORT 2019 114
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
E2 Additional financial instruments disclosures
(i)
Fair values
The fair value of the Group's financial assets and financial liabilities approximates their carrying value as at the
balance sheet date.
There are various methods available in estimating the fair value of a financial instrument. The methods comprise:
Level 1
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).
the fair value is estimated using inputs for the asset or liability that are not based on observable market
data.
Level 3
All of the Group's derivative financial instruments are valued using the Level 2 valuation techniques, being observable
inputs. There have been no transfers between levels during the year.
Interest rate swaps and cross currency swaps
The fair value of cross currency contracts is calculated as the present value of expected future cash flows of these
instruments. Key variables include market pricing data, discount rates and credit risk of the group or counterparty
where relevant. Variables reflect those which would be used by the market participants to execute and value the
instruments.
Forward currency contracts
Fair value is calculated using forward exchange market rates at the balance sheet date.
USPP
Fair value is calculated using discounted future cash flow techniques, where estimated cash flows and estimated
discount rates are based on market data at the balance sheet date, in combination with restatement to current foreign
exchange rates.
(ii) Financial instruments - interest rate swaps
Interest rate swaps meet the requirements to qualify for cash flow hedge accounting and are stated at fair value.
These swaps are 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 in the
cash flows attributable to such movements. Hedge effectiveness is measured by comparing the change in the fair
value of the hedged item and the hedging instrument respectively each quarter. Any difference represents
ineffectiveness and is recorded in the income statement.
The notional principal amounts and periods of expiry of the interest rate swap contracts are as follows:
2019
$m
2018
$m
Less than one year
One to five years
More than five years
Notional Principal
-
198.0
-
198.0
-
148.0
50.0
198.0
Fixed interest rate range p.a.
2.4% - 6.0% 2.4% - 6.0%
Net settlement receipts and payments are recognised as an adjustment to interest expense on an accruals basis over
the term of the swaps, such that the overall interest expense on borrowings reflects the average cost of funds achieved
by entering into the swap agreements.
(iii) Financial instruments - cross currency swaps (cash flow hedges)
Cross currency swap contracts are classified as cash flow hedges and are stated at fair value.
These cross currency swaps, in conjunction with interest rate swaps are being used to hedge the exposure to the cash
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
fair value of the hedged item and the hedging instrument respectively each quarter. Any difference represents
ineffectiveness and is recorded in the income statement.
66
THE STAR ENTERTAINMENT GROUP 115
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Financial instruments - cross currency swaps (fair value hedges)
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
assessed as highly effective. The decrease in fair value of the cross currency swaps at fair value of $17.9 million
(2018: $12.1 million) has been recognised in finance costs and offsetting gain on the USPP borrowings. The
ineffectiveness recognised in FY2019 was immaterial.
The principal amounts and periods of expiry of the cross currency swap contracts are as follows:
Less than one year
One to five years
More than five years
Notional principal
2019
2018
AUD $m
USD $m
AUD $m
USD $m
-
98.1
433.4
531.5
-
105.0
338.4
443.4
-
98.1
433.4
531.5
-
105.0
338.4
443.4
Fixed interest rate range p.a.
4.3% - 5.9%
4.3% - 5.9%
The terms and conditions in relation to interest rate and maturity of the cross currency swaps are similar to the terms
and conditions of the underlying hedged USPP borrowings as set out in note B7.
(iv) Financial instruments - forward currency contracts
Forward currency contracts meet the requirements to qualify for cash flow hedge accounting and are stated at fair
value.
These contracts are used to hedge the exposure to variability in the movement USD exchange rate arising from 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.
The notional amounts and periods of expiry of the foreign currency contracts are as follows:
Buy USD / sell AUD
Less than one year
One to five years
More than five years
Notional principal
Average exchange rate (AUD/USD)
(v) Reconciliation of movement in financing activities
2019
$m
-
-
-
-
-
2018
$m
0.9
-
-
0.9
0.97
Cash
flows
$m
Changes
in fair
values
$m
Foreign
exchange
movement
$m
2018
$m
Option
premium
$m
Borrowing
costs
$m
2019
$m
liabilities
Interest bearing
(refer to note B7)
Net derivative assets (refer
to note B3)
(820.0)
(296.0)
(17.9)
(32.7)
31.7
-
43.7
-
5.3
-
(1.0)
(1,162.3)
-
75.4
67
ANNUAL REPORT 2019 116
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Cash
flows
$m
Changes
in fair
values
$m
Foreign
exchange
movement
$m
2017
$m
Option
premium
$m
Borrowing
costs
$m
2018
$m
liabilities
Interest bearing
(refer to note B7)
Net derivative assets (refer
to note B3)
(1,045.0)
248.7
12.1
(19.9)
(16.4)
0.5
(820.0)
143.8
(102.5)
(9.6)
-
-
-
31.7
68
THE STAR ENTERTAINMENT GROUP NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
F Other disclosures
F1 Other comprehensive income
Net loss on derivatives
Transfer of hedging reserve to the income statement a
Tax on above items recognised in other comprehensive income
117
2019
$m
(7.7)
-
2.3
(5.4)
2018
$m
(18.9)
14.1
1.4
(3.4)
a The transfer related to the foreign exchange spot retranslation of the foreign debt is offset by the retranslation on the cross
currency swaps in other income in the income statement.
F2 Income tax
(i)
Income tax expense
The major components of income tax expenses are:
Current tax expense
Adjustments in respect of current income tax of previous years
Deferred income tax (expense)/benefit
Income tax expense reported in the income statement
Aggregate of current and deferred tax relating to items charged
or credited to equity:
Current tax benefit reported in equity
Deferred tax benefit reported in equity
Income tax benefit reported in equity
Income tax expense
A reconciliation between income tax expense and the product of
accounting profit before income tax multiplied by the income tax rate
is as follows:
Accounting profit before income tax expense
At the Group's statutory income tax rate of 30%
- Non assessable gain on sale
- Recognition/(derecognition) of temporary differences
- Research & Development tax offset
- Tax consolidation reset
- Over provision in prior years
- Other items
Aggregate income tax expense
Effective income tax rate
2019
$m
(80.0)
(0.6)
(0.1)
(80.7)
0.8
2.2
3.0
278.7
(83.6)
2.9
1.3
0.6
-
(0.6)
(1.3)
(80.7)
2018
$m
(77.2)
4.3
10.6
(62.3)
0.5
1.7
2.2
210.4
(63.1)
-
(2.2)
2.9
2.6
-
(2.5)
(62.3)
%28.9
%29.6
69
ANNUAL REPORT 2019 118
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
(ii) Deferred tax balances
The balance comprises temporary differences attributable to:
2019
Employee provisions
Other provisions and accruals
Impairment of trade receivables*
Unrealised financial liabilities
Other
Deferred tax assets set off
Intangible assets
Property, plant and equipment
Unrealised financial assets
Other
Balance
1 July 2018
$m
Recognised
in the
income
statement
$m
Recognised
directly in
equity
$m
Balance
30 June 2019
$m
19.9
14.9
7.9
30.1
4.2
77.0
(72.1)
(134.3)
(18.2)
(25.2)
(249.8)
1.0
6.7
(4.5)
18.1
(2.0)
19.3
3.9
3.0
(19.8)
(6.5)
(19.4)
-
-
-
(8.8)
-
(8.8)
-
-
11.0
-
11.0
20.9
21.6
3.4
39.4
2.2
87.5
(68.2)
(131.3)
(27.0)
(31.7)
(258.2)
Net deferred tax (liabilities)/assets
(172.8)
(0.1)
2.2
(170.7)
* Opening balance has increased by $3.1 million for AASB 9 transition adjustment to retained earnings
2018
Employee provisions
Other provisions and accruals
Impairment of trade receivables
Unrealised financial liabilities
Other
Deferred tax assets set off
Intangible assets
Property, plant and equipment
Unrealised financial assets
Other
Balance
1 July 2017
$m
Recognised
in the
income
statement
$m
Recognised
directly in
equity
$m
Balance
30 June 2018
$m
18.3
10.7
4.2
67.0
6.4
106.6
(73.7)
(135.7)
(59.7)
(25.7)
(294.8)
1.6
4.2
0.6
(38.7)
(2.5)
(34.8)
1.6
1.4
41.9
0.5
45.4
-
-
-
1.8
0.3
2.1
-
-
(0.4)
-
(0.4)
19.9
14.9
4.8
30.1
4.2
73.9
(72.1)
(134.3)
(18.2)
(25.2)
(249.8)
Net deferred tax (liabilities)/assets
(188.2)
10.6
1.7
(175.9)
70
THE STAR ENTERTAINMENT GROUP 119
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
(iii) Tax consolidation
Effective June 2011, The Star Entertainment Group Limited (the Head Company) and its 100% owned subsidiaries
formed an income tax consolidation group. Members of the tax consolidation group entered into a tax sharing
arrangement that provides for the allocation of income tax liabilities between the entities should the Head Company
default on its tax payment obligations. At balance date, the possibility of default is remote.
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
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
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
reporting purposes.
The allocation of taxes under the tax funding agreement is recognised as either an increase or decrease in the
subsidiaries' intercompany accounts with the Head Company. The Group has chosen to adopt the Group Allocation
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
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.
(iv)
Income tax payable
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
paid exceed current tax.
The income tax (payable) balance is attributable to:
2019
Tax consolidated group - year ended
30 June 2019
Tax consolidated group - year ended
30 June 2018 a
Prior years
Total Australia
Overseas subsidiaries
Total
(Payable) /
receivable
1 July 2018
(Increase) /
decrease in
tax payable
Tax
instalment
paid
Over
provision of
tax
$m
-
(2.1)
1.8
(0.3)
-
(0.3)
$m
$m
$m
(84.2)
2.5
0.4
(81.3)
-
(81.3)
65.8
2.0
-
67.8
-
67.8
-
1.5
-
1.5
-
1.5
(Payable) /
receivable
30 June
2019
$m
(18.4)
4.0
2.2
(12.2)
-
(12.2)
Other
$m
-
0.1
-
0.1
-
0.1
a
The decrease in tax payable is an amendment to the income tax return relating to the application of the tax consolidation
reset.
2018
Tax consolidated group - year ended
30 June 2018
Tax consolidated group - year ended
30 June 2017
Prior years
Total Australia
Overseas subsidiaries
Total
(Payable)
1 July 2017
$m
(Increase) /
decrease in
tax payable
$m
Tax
instalment
paid
$m
Over
provision of
tax
$m
(Payable) /
receivable
30 June
2018
$m
Other
$m
-
(76.7)
(28.8)
-
(28.8)
-
(28.8)
1.7
-
(75.0)
-
(75.0)
74.6
26.0
-
100.6
-
100.6
-
2.6
-
2.6
-
2.6
-
0.3
-
0.3
-
0.3
(2.1)
1.8
-
(0.3)
-
(0.3)
71
ANNUAL REPORT 2019 120
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
F3 Earnings per share
Net profit after tax attributable to ordinary shareholders
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
2019
$m
198.0
21.6
21.6
2018
$m
148.1
17.5
17.5
2019
Number
2018
Number
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares issued at the beginning of the year
Adjustment for issue of new share capital on 16 April 2018 a
917,322,730
825,672,730
-
19,083,288
Weighted average number of shares used as the denominator
917,322,730
844,756,018
Adjustment for calculation of diluted earnings per share:
Adjustment for Performance Rights
1,589,665
1,243,216
Weighted average number of ordinary shares and potential ordinary shares
as used as the denominator in calculating diluted earnings per share at the
end of the year
918,912,395
845,999,234
a New shares issued in FY2018 of 91,650,000, being a weighted average for 76 days of 19,083,288.
F4 Other assets
Current
Prepayments
Other assets
Non current
Rental paid in advance
Other assets
Other assets above are shown net of impairment of nil (2018: nil).
F5 Trade and other payables
Trade creditors and accrued expenses
Interest payable
2019
$m
49.4
2.6
52.0
9.7
37.9
47.6
2018
$m
41.4
3.4
44.8
9.7
1.5
11.2
338.3
2.6
340.9
363.3
2.5
365.8
Trade and other payables of $340.9 million were down 6.8%, predominately relating to the reduction in safe
keeping and patron deposits linked to the decrease in IRB volume on pcp.
72
THE STAR ENTERTAINMENT GROUP NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
F6 Provisions
Current
Employee benefits
Workers' compensation
Other a
Non-current
Employee benefits
Other
121
2019
$m
60.9
6.6
32.4
99.9
8.6
8.3
16.9
2018
$m
57.6
6.9
-
64.5
7.9
5.0
12.9
a Restructuring and redundancy provision relating to Group reorganisation.
Reconciliation
Reconciliations of each class of provision, except for employee benefits and other, at the end of each financial year are
set out below:
Workers' compensation reconciliation
2019
Carrying amount at beginning of the year
Provisions made during the year
Provisions utilised during the year
Carrying amount at end of the year
2018
Carrying amount at beginning of the year
Provisions made during the year
Provisions utilised during the year
Carrying amount at end of the year
Workers'
compensation
(current)
$m
Other (non-
current)
$m
6.9
1.4
(1.7)
6.6
7.6
0.9
(1.6)
6.9
5.0
3.3
-
8.3
1.7
3.3
-
5.0
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
estimated claims liability for workers' compensation is undertaken annually by an independent actuary. The valuations
are prepared in accordance with the relevant legislative requirements of each state and 'Professional Standard 300' of
the Institute of Actuaries. The estimate of claims liability includes a margin over case estimates to allow for the future
development of known claims, the cost of incurred but not reported claims and claims handling expenses, which are
determined using a range of assumptions. The timing of when these costs will be incurred is uncertain.
73
ANNUAL REPORT 2019 122
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
F7 Other liabilities
Current
Customer loyalty deferred revenue a
Other deferred revenue
Non current
Other
2019
$m
17.1
1.7
18.8
5.9
5.9
2018
$m
18.7
1.6
20.3
-
-
a
The Group operates customer loyalty programs enabling customers to accumulate award credits for gaming and on-property
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.
F8 Treasury shares
During the year, the Group purchased 1,458,361 of its own shares for use to settle future employee share based
payments scheme.
Value of treasury shares purchased
Number of treasury shares purchased
F9 Share capital and reserves
(i) Share capital
Ordinary shares - issued and fully paid a
Issue of share capital b
Purchase of treasury shares c
Issuance fees
2019
$m
6.7
2018
$m
-
2019
Number
1,458,361
2018
Number
-
2019
$m
2018
$m
3,070.2
2,580.5
-
(6.7)
(0.5)
489.7
-
-
3,063.0
3,070.2
a There is only one class of shares (ordinary shares) on issue. These ordinary shares entitle the holder to participate in dividends
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.
b On 16 April 2018, the Company issued fully paid ordinary shares to nominated entities of CTF and FEC, as announced to the
market on 29 March 2018.
c
The Group purchased 1,458,361 of its own shares for use to settle future employee shared based payment schemes.
74
THE STAR ENTERTAINMENT GROUP NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Movements in ordinary share capital
Balance at beginning of the year
Issue of fully paid ordinary shares on 16 April 2018
Balance at the end of the year
(ii) Reserves (net of tax)
Hedging reserve a
Cost of hedging reserve b
Share based payments reserve c
123
2019
Number of
shares
2018
Number of
shares
917,322,730
825,672,730
-
91,650,000
917,322,730
917,322,730
2019
$m
(27.5)
4.9
7.0
(15.6)
2018
$m
(17.2)
-
10.2
(7.0)
Nature and purpose of reserves
a The hedging reserve records the spot element of fair value changes on the portion of the gain or loss on a hedging instrument in
a cash flow hedge that is determined to be an effective hedge.
b The spot element of derivative contracts are designated as hedging instruments with fair value changes recorded in the hedging
reserve. The forward element is recognised in other comprehensive income and accumulated in a separate component of equity
under costs of hedging reserve.
c
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 F11 for further details on these
plans.
(iii) Capital management
The Group's objectives when managing capital are to ensure the Group continues as a going concern while providing
optimal returns to shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends to be paid to
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
of associate and joint venture entities.
Net debt comprises interest bearing liabilities, with US dollar borrowings translated at the 30 June 2019 USD/AUD spot
rate of 1.4261 (2018: 1.3505), after adjusting for cash and cash equivalents and derivative financial instruments.
The Groupʼs capital management also aims to ensure that it meets financial covenants attached to the interest bearing
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
Group is not subject to externally imposed capital requirements.
Gross Debt
Net Debt a
EBITDA b
Gearing ratio (times)
2019
$m
1,162.3
972.6
519.8
1.9
x
2018
$m
820.0
678.0
474.8
1.4
x
a Net debt is stated after adjusting for cash and cash equivalents less the net position of derivative financial instruments.
b EBITDA is a non-IFRS disclosure and stands for earnings before interest, tax, depreciation and amortisation.
75
ANNUAL REPORT 2019 124
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
F10 Reconciliation of net profit after tax to net cash inflow from operations
Net profit after tax
- Depreciation and amortisation
- Employee share based payments expense
- Unrealised foreign exchange gain
- Impairment of trade receivables
- Gain on disposal of property, plant and equipment
- Finance costs
- Share of net loss of associate and joint venture entities
- Gain on disposal of Gold coast land
Working capital changes
- Increase in trade and other receivables and other assets
- Increase in inventories
- Increase in trade and other payables, accruals and provisions
- Increase/(decrease) in tax provisions
Net cash inflow from operating activities
Note
A4
F11
A3
A3
A5
D5
2019
$m
198.0
205.8
2.1
(0.9)
5.5
(0.9)
35.7
0.6
(9.7)
(39.4)
(2.0)
7.7
8.9
411.4
2018
$m
148.1
187.2
5.5
-
7.6
-
78.2
0.1
-
(19.8)
(3.6)
32.2
(38.4)
397.1
Operating cash flow before interest and tax was $478.8 million, down 3.6% on the pcp, with 92% EBITDA to
cash conversion ratio.
76
THE STAR ENTERTAINMENT GROUP 125
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
F11 Employee share plans
Long term incentive plan
During the current and prior periods, the Company issued Performance Rights under the long term incentive plan to
eligible employees. The share based payment expense of $0.7 million (2018: $5.5 million) in respect of the equity
instruments granted is recognised in the income statement.
The number of Performance Rights granted to employees and forfeited or lapsed during the year are set out below.
2019
Grant Date
26 September 2014
21 September 2015
5 October 2016
2 October 2017
3 October 2018
2018
Grant Date
1 October 2013
26 September 2014
21 September 2015
5 October 2016
2 October 2017
Balance at start
of year
Granted during
the year
Forfeited
during the
year
Lapsed
during the
year
921,619
665,548
1,146,415
1,734,717
-
-
-
-
-
1,599,402
3,224
43,781
83,855
134,261
-
4,468,299
1,599,402
265,121
-
-
-
-
-
-
Vested
during the
year a
918,395
-
-
-
-
Balance at end
of year
-
621,767
1,062,560
1,600,456
1,599,402
918,395
4,884,185
Balance at start of
year
Granted during
the year
461,198
921,619
694,470
-
-
-
1,141,975
47,904
-
1,785,585
Forfeited
during the
year
-
-
28,922
43,464
50,868
3,219,262
1,833,489
123,254
Lapsed during
the year
Vested during
the year
Balance at end
of year
-
-
-
-
-
-
461,198
-
-
-
-
-
921,619
665,548
1,146,415
1,734,717
461,198
4,468,299
Grants from 1 October 2013 include a market based hurdle (relative total shareholder return (TSR)) and an EPS
component. Grants from 2 October 2017 include a market based hurdle (relative TSR), an EPS component and a
return on investment capital (ROIC) component. The Performance 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 and ROIC component, a discounted cash flow technique was utilised.
The total value does not contain any specific discount for forfeiture if the employee leaves the Group during the vesting
period. This adjustment, if required, is based on the number of equity instruments expected to vest at the end of each
reporting period.
a Performance rights granted on 26 September 2014 were tested and vested on 26 September 2018. The TSR percentile rank for
the Company was 83.0%, above the target percentile of 75%. Accordingly 99.3% of the TSR component vested. The EPS
performance was 26.2 cents and was above the target of 25.1 cents approved by the Board. Accordingly 100% of the EPS
component vested.
The key assumptions underlying the Performance Rights valuations are set out below:
Effective grant
date
Test and vesting
date
26 September 2014
26 September 2018
21 September 2015
21 September 2019
5 October 2016
2 October 2017
3 October 2018
5 October 2020
2 October 2021
3 October 2022
Share price at
date of grant
Expected
volatility in
share price
Expected
dividend yield
Risk free
interest rate
Average Fair
Value per
Performance
Right
$
3.31
4.82
5.89
5.17
5.21
%
27.00
%
28.00
%
25.03
%
24.40
%
22.76
%
%
%2.90
%2.70
%2.74
%2.98
%4.66
%
%2.88
%1.98
%1.68
%2.28
%2.14
$
2.45
3.53
4.27
4.02
3.77
77
ANNUAL REPORT 2019 126
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Equity retention plan
During the current period, the Company issued restricted shares under the equity retention plan to eligible employees.
The share based payment expense of $1.4 million (2018: nil) in respect of the equity instruments granted is recognised
in the income statement.
The number of restricted shares granted to employees and forfeited during the year are set out below.
2019
Grant Date
1 July 2018
Balance at start of
year
Granted during
the year
Forfeited
during the
year
Lapsed during
the year
Vested
during the
year
Balance at end
of year
-
-
1,458,361
1,458,361
24,402
24,402
-
-
-
-
1,433,959
1,433,959
The awards are issued at no cost to participants and are subject to a service condition of five years. Participants are
entitled to dividends and may benefit from share price growth over the vesting period.
F12 Auditor's remuneration
Amounts received or due and receivable by Ernst & Young (Australia) for:
- An audit or review of the Financial Report of the Company and any other
entity in the consolidated group
- Other services in relation to the Company and any other entity in the
consolidated group:
- Assurance related
- Other non-audit services
2019
$
2018
$
1,067,766
1,005,000
10,000
78,860
22,000
116,253
1,156,626
1,143,253
Amounts received or due and receivable by related practices of Ernst &
Young (Australia) for:
- Assurance related services
-
-
The auditor of the Company and its controlled entities is Ernst & Young. From time to time, Ernst & Young provides
other services to the Group, which are subject to strict corporate governance procedures encompassing the selection
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.
78
THE STAR ENTERTAINMENT GROUP 127
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
G Accounting policies and corporate information
Significant accounting policies are contained within the financial statement notes to which they relate and are not
detailed in this section.
Corporate Information
The Star Entertainment Group Limited (the Company) is a company incorporated and domiciled in Australia. The
Financial Report of the Company for the year ended 30 June 2019 comprises the Company and its controlled entities
(collectively referred to as the Group). The Company's registered office is Level 3, 159 William Street, Brisbane QLD
4000.
The Company is of the kind specified in Australian Securities and Investments Commission (ASIC) Instrument
2016/191. In accordance with that Instrument, amounts in the Financial Report and the Directors' Report have been
rounded to the nearest hundred thousand dollars, unless specifically stated to be otherwise. All amounts are in
Australian dollars ($). The Company is a for profit organisation.
The Financial Report was authorised for issue by the Directors on 16 August 2019.
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 and other mandatory Financial Reporting requirements in
Australia.
The financial statements comply with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
The financial statements have been prepared under the historical cost convention except as disclosed in the
accounting policies below and elsewhere in this report. The policies used in preparing the financial statements are
consistent with those of the previous year except as indicated under 'Changes in accounting policies and disclosures'.
Significant accounting judgements, estimates and assumptions
Preparation of the financial statements in conformity with Australian Accounting Standards and IFRS requires
management to make judgements, estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
In the process of applying the Group's accounting policies, management has made the following judgements, which
have the most significant effect on the amounts recognised in the consolidated financial statements:
− Asset useful lives and residual values (refer notes A4 and B5);
− Impairment of assets (refer note B6);
− Valuation of derivatives and other financial instruments (refer note B3);
− Impairment of trade receivables (refer note B2);
− Significant items (refer note A7); and
− Provisions (refer note F6).
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the
carrying amount of the asset or liability in future periods.
Changes in accounting policies and disclosures
The Group has adopted the following new and amended accounting standards, which became applicable for the year
ended 30 June 2019:
Reference
Title
Revenue from Contracts with Customers
AASB 15 (i)
AASB 9 (ii)
Financial Instruments
(i) AASB 15 Revenue from Contracts with Customers
The Group applies, for the first time for the year ended 30 June 2019, AASB 15 Revenue from Contracts with
Customer.
AASB 15 establishes a single comprehensive model that applies to accounting for revenue arising from contracts with
customers. The core principle of AASB 15 is that an entity should recognise revenue equating to the transfer of
promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for those goods and services. The principles in AASB 15 provide a more structured approach to
measuring and recognising revenue.
79
ANNUAL REPORT 2019 128
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
The Group has adopted the new standard using the full retrospective method of adoption. The effect of the transition
on the current period has not been disclosed as the standard provides an optional practical expedient to do so. The
Group did not apply any of the other available practical expedients. The major changes as a result of the adoption of
the new standard are as follows:
− Under the new revenue standard, the stand-alone selling price of complimentary services (including hotel room
nights, food and beverage, and other services) that are provided to casino guests as incentives related to gaming
play are recorded as revenues related to the respective goods or services as they are provided to the patron.
Historically, these amounts were recorded as gaming revenue along with the original gaming transaction. The
allocation of revenue to non-gaming activities is measured based on the stand-alone selling price of the goods and
services provided. After allocation of revenue to non-gaming, the residual amount is recorded as gaming revenue.
This change primarily results in a decrease in gaming revenue and an increase in non-gaming revenues related to
the respective goods or services provided to the customer.
− A portion of commissions and rebates paid to gaming promoters, representing the estimated incentives that were
returned to customers, were previously reported as reductions in revenues, with the balance of commission
expenses reflected as casino expenses. As a result of the adoption of the new standard, all commissions and
rebates paid to gaming promoters are reflected as reductions in casino revenues. This change primarily results in a
decrease in casino expenses and a corresponding decrease in casino revenues.
The amounts of affected financial statement line items in the consolidated income statement and the consolidated
statement of cash flows for the prior period before and after the adoption of the new revenue standard are as follows:
Reported
30 June 2018
$m
Adjustments
for AASB 15
$m
Reclassified c
$m
Restated
30 June 2018
$m
Consolidated income statement
Domestic gaming a
International VIP Rebate a
Non-gaming b
Other b
Gross revenue
Players rebates and promotional allowances
Revenue
Commissions and fees
Advertising and promotions
2,293.0
-
286.5
-
2,579.5
(107.5)
2,472.0
(410.9)
(93.0)
1,968.1
(277.5)
(464.7)
246.7
-
(495.5)
107.5
(388.0)
388.0
-
-
Consolidated statement of cash flows
Net cash receipts from customers (inclusive of
GST)
Payments to suppliers and employees (inclusive
of GST)
2,386.9
(302.5)
(1,371.2)
302.5
(710.6)
710.6
(9.2)
9.2
-
-
-
22.9
(22.9)
-
-
-
1,304.9
245.9
524.0
9.2
2,084.0
-
2,084.0
-
(115.9)
1,968.1
2,084.4
(1,068.7)
1,015.7
-
a Domestic gaming and International VIP Rebate were previously disclosed together as Gaming.
b Non-gaming and Other were previously disclosed together.
c Incentives previously included in Commissions and fees have moved to Advertising and promotions.
(ii) AASB 9 Financial Instruments
The accounting standard replaces ʻAASB 139 - Financial Instruments: Recognition and Measurementʼ that relates to
the recognition, classification and measurement of financial assets and liabilities, derecognition of financial
instruments, impairment of financial assets and hedge accounting.
The adoption of AASB 9, including an election for hedging, from 1 July 2018 resulted in changes in accounting policies
and adjustments to the amounts recognised in the financial statements. In accordance with the transition provisions in
AASB 9 (7.2.15), comparative figures have not been restated.
1,015.7
-
80
THE STAR ENTERTAINMENT GROUP NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
The effect of the changes on retained earnings is as follows:
Closing retained earnings as of 30 June 2018
Increase in provision for impairment (net of tax)
Opening retained earnings as of 1 July 2018
129
2018
$m
718.3
(7.2)
711.1
Impairment of financial assets
The Groupʼs financial assets consist of cash and cash equivalents and trade and other receivables that are
subsequently recognised at amortised cost. The Group applies the AASB 9 simplified approach to measuring expected
credit losses, using a lifetime expected loss allowance for all trade and other receivables. Cash and cash equivalents
are also subject to the impairment requirements of AASB 9 however due to their nature the expected loss allowance is
immaterial.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and days past due. The provision for impairment of trade receivables applying lifetime expected credit
loss as compared to the incurred loss model of AASB 139 resulted in a $7.2 million adjustment, net of tax, to opening
retained earnings as of 1 July 2018.
Standards and amendments issued but not yet effective
The Group has not applied Australian Accounting Standards and IFRS that were issued or amended but not yet
effective. The standard is:
Reference Title
AASB 16
Application date
1 July 2019
Leases
Under AASB 16, the distinction between finance and operating leases is eliminated for lessees (with the exception of
short-term and low value leases). Both finance leases and operating leases will result in the recognition of 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 for the lease term and the ROU asset reflects the lease liability and initial direct
costs, less any lease incentives and amounts required for dismantling.
Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in
the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those
payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an
adjustment to the ROU asset.
Lessor accounting under AASB 16 is substantially unchanged from todayʼs accounting under AASB 117. Lessors will
continue to classify all leases using the same classification principle as in AASB 117 and distinguish between two
types of leases: operating and finance leases.
The Group plans to adopt the modified retrospective approach on transition, where, for existing leases, the lease
liability is measured at the present value of future lease payments on the initial date of application, being 1 July 2019.
The ROU asset is measured at the value of the corresponding lease liability, adjusted for any existing lease related
assets or liabilities (prepaid lease payments or accrued lease incentives). Under this transition method, prior period
comparative financial statements are not required to be restated and any cumulative impact of applying the standard is
recognised in opening retained earnings on the initial date of application, being 1 January 2019.
The Group has completed an impact assessment of AASB 16 and estimates the following impact on its consolidated
statement of financial position as at 1 July 2019:
Estimated impact on Consolidated Balance Sheet
Right of use assets
Lease liabilities
Prepayments
Non-current provisions
$m
60
(58)
(9)
7
The leases recognised by the Group under AASB 16 predominately relate to property rentals.
On adoption of AASB 16, operating lease expense will no longer be recognised in property costs and other expenses,
depreciation of ROU assets will be recognised in depreciation and amortisation expense and lease financing costs will
be recognised in net finance costs.
81
ANNUAL REPORT 2019 130
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Basis of consolidation
Controlled entities
The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity.
Controlled entities are consolidated from the date control is transferred to the Group and are no longer consolidated
from the date control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Foreign currency
The consolidated financial statements are presented in Australian dollars ($) which is the Group's functional and
presentation currency.
Transactions and balances
Transactions denominated in foreign currencies are translated at the rate of exchange ruling on the transaction date.
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 statement, with
the exception of differences on foreign currency borrowings that are in an effective hedge relationship. These are
taken directly to equity until the liability is extinguished, at which time they are recognised in the income statement.
Net finance costs
Finance income is recognised as the interest accrues, using the effective interest method. Finance costs consist of
interest and other borrowing costs incurred in connection with the borrowing of funds. Finance costs directly
associated with qualifying assets are capitalised, all other finance costs are expensed, in the period in which they
occur.
Taxation
Income tax
Income tax comprises current and deferred income tax. Income tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the period, and any adjustment to tax payable in
respect of previous years.
Deferred tax is provided using the balance sheet method, 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.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised.
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.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
Goods and Services Tax (GST)
Revenues, expenses, assets and liabilities are recognised net of the amount of GST except:
− when the GST incurred on a purchase of goods and services is not recoverable from the taxation 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;
− casino revenues, due to the GST being offset against government taxes; and
− receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the balance sheet.
Cash flows are included in the statement of cash flows 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.
82
THE STAR ENTERTAINMENT GROUP 131
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at face value. Cash and cash equivalents include cash
balances and call deposits with an original maturity of three months or less. Bank overdrafts that are repayable on
demand and form an integral part of the Group's cash management are included as a component of cash for the
purpose of the statement of cash flows.
Trade and other receivables
Trade receivables are recognised and carried at original settlement amount less a provision for expected credit loss
impaired, where applicable. Bad debts are written off when they 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.
The 2018 comparatives have not been restated for transition to AASB 9 Financial Instruments and remain in
accordance with the prior year accounting policy, which reads: 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 debt, discussions with the patron, management's
experienced judgement, and other specific facts related to the debt.
Inventories
Inventories include consumable stores, food and beverage and are carried at the lower of cost and net realisable
value. Inventories are costed on a weighted average basis. Net realisable value is the estimated selling price in the
ordinary course of business.
Property, plant and equipment
Refer to notes A4 and B4 for further details of the accounting policy, including useful lives of property, plant and
equipment.
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 residual values over their useful lives. Historical cost includes expenditure that is
directly attributable to the acquisition of these items.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognised in the income statement.
When the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately
to its recoverable amount.
Costs arising subsequent to the acquisition of an asset are included in the asset's carrying amount or recognised 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 can be measured reliably. All other repairs and maintenance costs are charged
to the income statement during the financial year in which they are incurred.
Costs relating to development projects are recognised as an asset when it is:
− probable that any future economic benefit associated with the item will flow to the entity; and
− it can be measured reliably.
If it becomes apparent that the development will not occur, the amount is expensed to the income statement.
Intangible assets
Goodwill
Goodwill represents the excess of the consideration transferred over the fair value of the identifiable net assets
acquired and liabilities assumed. Goodwill is assessed for impairment on an annual basis and is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are not reversed.
Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those
cash generating units or groups of cash generating units that are expected to benefit from the business combination in
which the goodwill arose.
Other intangible assets
Indefinite life intangible assets are not amortised and are assessed annually for impairment. Expenditure on gaming
licences acquired, casino concessions acquired, computer software and other intangibles are capitalised and
amortised using the straight line method as described in note B5.
Software
Costs associated with developing or maintaining computer software programs are recognised as 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 appropriate portion of the relevant
overheads. Expenditure meeting the definition of an asset is recognised as a capital improvement and added to the
original cost of the asset. These costs are amortised using the straight line method, as described in note B5.
83
ANNUAL REPORT 2019 132
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
Casino licences and concessions
Refer to note B5 for details and accounting policy.
Impairment of assets
Assets that have an indefinite useful life are not subject to depreciation or amortisation and are tested annually for
impairment. Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or
changes in circumstances indicate that the 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 recoverable amount is the
higher of an asset's fair value less costs of disposal and value in use. For the purpose of assessing impairment, assets
are grouped at the lowest level for which there are separately identifiable cash flows (cash generating units). Refer to
note B6 for further details of key assumptions included in the impairment calculation.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a
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 discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
Investment in associate and joint venture entities
Associates are all entities over which the Group has significant influence but not control or joint control. Joint control is
the contractually agreed sharing of the joint arrangement, which exists only when decisions about the 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 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 cost. Under the equity method of accounting, the investments are initially recognised at
cost and are subsequently adjusted to recognise the Group's share of the post-acquisition profits or losses of the
investee in the income statement, and the Group's share of movements in other comprehensive income of the
investee in other comprehensive income. Dividends received are recognised as a reduction in the carrying amount of
the investment. The carrying amount of equity-accounted investments is tested for impairment in accordance with the
Group's policy.
Interest bearing liabilities
Interest bearing liabilities are recognised initially at fair value and include transaction costs. Subsequent to initial
recognition, interest bearing liabilities are recognised at amortised cost using the effective interest rate method. Any
difference between proceeds and the redemption value is recognised in the income statement over the period of the
borrowing using the effective interest rate method.
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 after the balance sheet date.
Leases
Leases of assets where the Group assumes substantially all the benefits and risks of ownership are classified as
finance leases.
Leases of assets under which substantially all the risks and benefits of ownership are effectively retained by the lessor
are classified as operating leases. Payments made under operating leases are charged to the income statement on a
straight line basis over the period of the lease.
Employee benefits
Post-employment benefits
The Group's commitment to defined contribution plans is limited to making the contributions in accordance with the
minimum statutory requirements. There is no legal or constructive obligation to pay further contributions if the fund
does not hold sufficient assets to pay all employees relating to current and past employee services.
Superannuation guarantee charges are recognised as expenses in the income statement as the contributions become
payable. A liability is recognised when the Group is required to make future payments as a result of employees'
services provided.
Long service leave
The Group's net obligation in respect of long term service benefits, other than pension plans, is the amount of future
benefit that employees have earned in return for their service in the current and prior periods. The obligation is
calculated using the expected future 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 dates approximating to the terms of the Group's obligations.
84
THE STAR ENTERTAINMENT GROUP 133
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
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.
Share based payment transactions
The Company operates a long term incentive plan (LTI), which is available to employees at the most senior executive
levels. Under the LTI, employees may become entitled to Performance Rights which may potentially convert to
ordinary shares in the Company. The fair value of Performance Rights is measured at grant date and is recognised as
an employee expense (with a corresponding increase in the share based payment reserve) over four years from the
grant date irrespective of whether the Performance Rights vest to 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.
The fair value of the Performance Rights is determined by an external valuer and takes into account the terms and
conditions upon which the Performance Rights were granted.
The Company operates an Equity Retention Plan, whereby eligible employees may receive up to 100% of their fixed
annual remuneration amount in value as fully paid ordinary shares after five years. The awards are issued at no cost to
participants and are subject to a service condition of five years. Participants are entitled to dividends and may benefit
from share price growth over the vesting period.
Under the Company's short term incentive plan (STI), eligible employees receive two thirds of their annual STI
entitlement in cash and one third in the form of restricted shares which are subject to a holding lock for a period of
twelve months. These shares are forfeited in the event that the employee voluntarily terminates from the Company
during the 12 month holding lock period.
The cost is recognised in employment costs, together with a corresponding increase in equity (share based payment
reserve) over the service period. No expense is recognised for awards that do not ultimately vest. A liability is
recognised for the fair value of cash settled transactions. The fair value is measured initially and at each reporting date
up to and including the settlement date, with changes in fair value recognised in employment costs.
Derivative financial instruments
The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks
arising from operational, financing and investment activities. In accordance with its Treasury Policy, the Group does
not hold or issue derivative financial instruments for trading purposes. However, derivatives that do not qualify for
hedge accounting are accounted for as trading instruments.
Derivative financial instruments are recognised initially at fair value at the date the derivative contract is entered into
and are subsequently remeasured to fair value at the end of each reporting period. The resulting gain or loss is
recognised immediately in the income statement. However, where derivatives qualify for cash flow hedge accounting,
the effective portion of the gain or loss is deferred in equity while the ineffective portion is recognised in the income
statement.
The fair value of interest rate swap, cross currency swap and forward currency contracts is determined by reference to
market values for similar instruments. Refer to note E2 for details of fair value determination.
Derivative assets and liabilities are offset and the net amount reported in the consolidated balance sheet if, and only if:
− there is a currently enforceable legal right to offset the recognised amount; and
− there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
Hedging
Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the exposure to variability in cash flows that are
attributable to a particular risk associated with a recognised asset or liability, or a highly probable forecast transaction,
the effective part of any gain or loss on the derivative financial instrument is recognised directly in equity. When the
forecast transaction subsequently 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 other carrying amount of the non
financial asset or liability.
If a hedge of a forecast transaction subsequently results in the recognition of a financial asset or financial liability, then
the associated gains and losses that were recognised directly in equity are reclassified into the income statement in
the same period or periods during which the asset acquired or liability assumed affects the income statement (i.e.
when interest income or expense is recognised). For cash flow hedges, the effective part of any gain or loss on the
derivative financial instrument is removed from equity and recognised in the income statement in the same period or
periods during which the hedged forecast transaction affects the income statement. The ineffective part of any gain or
loss is recognised immediately in the income statement.
When a hedging instrument expires or is sold, terminated or exercised, or the designation of the hedge relationship is
revoked but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains
in equity and is recognised in accordance with the above when the transaction occurs. If the hedged transaction is no
85
ANNUAL REPORT 2019 134
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the financial statements
For the year ended 30 June 2019
longer expected to take place, then the cumulative unrealised gain or loss recognised in equity is recognised
immediately in the income statement.
Fair value hedges
Where a derivative financial instrument is designated as a hedge of the exposure to variability in the fair value of a
recognised asset or liability, any change in the fair value of the hedge is recognised in the income statement as a
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.
Issued capital
Issued and paid up capital is recognised at the fair value of the consideration received. Issued capital comprises
ordinary shares. Any transaction costs directly attributable to the issue of ordinary shares are recognised directly in
equity, net of tax, as a reduction of the share proceeds received.
Operating segment
An operating segment is a component of an entity that engages in business activities from which it may earn revenues
and incur expenses (including revenues and 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 allocate resources
and assess its performance.
The Group aggregates two or more operating segments when they have similar economic characteristics, and the
segments are similar in each of the following respects:
− nature of the products and services;
− type or class of customer for the products and services;
− methods used to distribute the products or provide the services; and
− nature of the regulatory environment.
Segment results include revenue and expenses directly attributable to a segment and exclude significant items.
Capital expenditure represents the total costs incurred during the period to acquire segment assets, including
capitalised interest.
Dividend distributions
Dividend distributions to the Company's shareholders are recognised as a liability in the Group's financial statements
in the period in which the dividends are declared.
Basic earnings per share
Basic earnings per share is calculated by dividing the net earnings after tax for the period by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share
Diluted earnings per share is calculated by dividing the net earnings attributable to ordinary equity holders adjusted by
the after tax effect of:
− any dividends or other items related to dilutive potential ordinary shares deducted in arriving at profit or loss
attributable to ordinary equity holders;
− any interest recognised in the period related to dilutive potential ordinary shares; and
− any other changes in income or expense that would result from the conversion of the dilutive potential ordinary
shares;
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.
86
THE STAR ENTERTAINMENT GROUP 135
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2019
Directors' Declaration
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 2019 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
16 August 2019
87
ANNUAL REPORT 2019 136
INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED 30 JUNE 2019
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 2019, 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)
b)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2019 and of its
consolidated financial performance for the year ended on that date; and
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 judgement, 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.
88
THE STAR ENTERTAINMENT GROUP
INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED 30 JUNE 2019
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 $218.9m of
gross trade receivables and an associated provision for
impairment of $11.3m at 30 June 2019.
Our audit procedures included the following:
assessed whether the ageing of trade
receivables was being correctly calculated for a
sample of customer balances;
The Directors assessment as to the recoverability of
trade receivables relating to VIP revenue involves
judgement, specifically relating to the individual
circumstances of each aged debtor.
The Group applies Australian Accounting Standard
AASB 9 Financial Instruments in calculating the
provision for doubtful debts, applying a forwardlooking
expected loss
impairment model. This involves judgement as the
expected credit losses must reflect information about
past events, current conditions and forecasts of future
conditions.
This was a key audit matter due to the inherent
subjectivity that is involved in making judgements in
relation to credit exposures to determine the
recoverability of trade receivables.
assessed the effectiveness of relevant controls
in relation to the granting of credit facilities,
including credit checks;
considered the Groups assessment of individual
customers circumstances;
evaluated whether the expected credit loss
impairment model met the criteria set out in AASB
9 and tested the mathematical accuracy of the
calculations;
compared the Groups provisioning rates
against historical write off data;
evaluated cash receipts after yearend to
determine any remaining exposure at the date of
the financial report; and
assessed the adequacy of the Groups
disclosures in relation to trade receivables
included in the financial report.
89
ANNUAL REPORT 2019
138
INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED 30 JUNE 2019
Impairment testing of Goodwill
Why significant to the audit
How our audit addressed the key audit matter
The Group has goodwill of $1,442.2 million as at 30
June 2019. The Group performs an impairment
assessment on an annual basis to support the carrying
value of goodwill. In addition, an impairment
assessment is performed when there is an impairment
indicator present.
The impairment assessment is complex and
judgemental, as it includes modelling a range of
assumptions and estimates that are affected by
expected future performance and market conditions
such as cash flow forecasts, growth rates, discount
rates and terminal value assumptions. Accordingly, the
Groups impairment assessment was a key audit matter.
Key assumptions, judgements and estimates used in the
Groups assessment of impairment of intangibles assets
are set out in Note B6 of the financial report.
Our audit procedures included the following:
Evaluated the cash flow forecasts, which
supported the valueinuse impairment models for
goodwill.
Compared the forecasts to the Board approved
budgets and fiveyear financial plan. We also
considered the historical reliability of the Groups
cash flow forecasting and budgeting processes.
Involved our valuation specialists to assess
whether the methodology applied was in
accordance with Australian Accounting Standards
and to evaluate the key assumptions applied in the
impairment models. These included the discount
rates, growth rates, and terminal value
assumptions.
Tested whether the models used were
mathematically accurate.
Performed sensitivity analysis around the key
assumptions to ascertain the extent to which
changes in those assumptions that would result in
impairment.
Assessed the adequacy of the disclosures
included in Notes B5 and B6 of the financial
report.
90
THE STAR ENTERTAINMENT GROUP
INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED 30 JUNE 2019
139
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 2019 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 judgement and
maintain professional scepticism throughout the audit. We also:
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
91
ANNUAL REPORT 2019
140
INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED 30 JUNE 2019
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.
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 32 of the directors' report for the year ended
30 June 2019.
In our opinion, the Remuneration Report of The Star Entertainment Group Limited for the year ended 30 June
2019, 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
16 August 2019
92
THE STAR ENTERTAINMENT GROUP
141
SHAREHOLDER INFORMATION
AS AT 23 AUGUST 2019
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.
VOTING RIGHTS
All ordinary shares issued by The Star Entertainment Group Limited carry one vote per share. Performance options
and 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) 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
b) 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).
ANNUAL REPORT 2019 142
SHAREHOLDER INFORMATION
AS AT 23 AUGUST 2019
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.
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 23 August 2019 pursuant to notices lodged with ASX in
accordance with section 671B of the Corporations Act 2001:
NAME
Date of interest
Number of
ordinary shares (i)
% of issued capital
(ii)
Firmament Investment Pte. Ltd and its associated entities
16 April 2018
45,825,000
Far East Consortium International Limited, its controlled
entities and its associated entities
Perpetual Limited and its related bodies corporate (including
Perpetual Investment Management Limited)
16 April 2018
45,825,000
29 July 2019
57,523,080
4.995%
4.995%
6.27%
Yarra Funds Management Limited, Yarra Capital
Management Holdings Pty Ltd, Yarra Management
Nominees Pty Ltd, AA Australia Finco Pty Ltd,
TA SP Australia Topco Pty Ltd and TA Universal
Investment Holdings Ltd
9 August 2019
47,440,726
5.1717%
(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.
THE STAR ENTERTAINMENT GROUP 143
SHAREHOLDER INFORMATION
AS AT 23 AUGUST 2019
LESS THAN MARKETABLE PARCELS
There were 13,534 shareholders holding less than a marketable parcel of 127 ordinary shares (valued at $500 or
less, based on a market price of $3.95) at the close of trading on 23 August 2019 and they hold a total of 1,191,441
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 employee share plans, namely, the General Employee Share Plan (GESP), the Short Term
Performance Plan (STPP), the long term incentive component (LTI) of the Employee Performance Plan and the
Equity Retention Plan (ERP).
Ordinary Shares (for GESP)
Ordinary Shares (for STPP)
Ordinary Shares (for LTI)
Ordinary Shares (for ERP)
Number of shares
purchased
Average price paid
per share
50,443
587,896
918,395
1,458,361
$4.9835
$5.2684
$4.5636
$4.5664
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
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
CS THIRD NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
UBS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ARGO INVESTMENTS LIMITED
NAVIGATOR AUSTRALIA LTD
ECAPITAL NOMINEES PTY LIMITED
WARBONT NOMINEES PTY LTD
MEDICH CAPITAL PTY LTD
AMP LIFE LIMITED
MUTUAL TRUST PTY LTD
PACIFIC CUSTODIANS PTY LIMITED
SEYMOUR GROUP PTY LTD
Total of top 20 registered shareholders
* on a grouped basis
325,746,793
129,125,985
123,679,611
82,479,354
24,780,464
16,212,564
11,449,740
8,149,034
8,049,520
7,990,098
7,205,646
5,800,000
3,214,041
3,043,275
2,934,269
2,650,000
2,267,005
2,248,930
2,053,544
2,034,507
35.51%
14.08%
13.48%
8.99%
2.70%
1.77%
1.25%
0.89%
0.88%
0.87%
0.79%
0.63%
0.35%
0.33%
0.32%
0.29%
0.25%
0.25%
0.22%
0.22%
771,114,380
84.07%
ANNUAL REPORT 2019
144
SHAREHOLDER INFORMATION
AS AT 23 AUGUST 2019
DISTRIBUTION OF SECURITIES HELD
RANGE OF HOLDING
No. of Holders
No. of Securities
No. of Holders
No. of Securities
ORDINARY SHARES
PERFORMANCE RIGHTS 1
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
47,619
20,811
3,149
1,659
82
73,320
16,563,125
45,557,425
22,432,095
35,073,607
797,691,478
917,317,730
0
0
1
22
8
31
0
0
6,830
1,021,874
3,855,481
4,884,185
1 Performance Rights were issued pursuant to the long term incentive component of The Star Entertainment Group’s Employee Performance
Plan. Refer to the Remuneration Report for more information about the long term incentive plan.
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:
GPO Box 13348
George Street Post Shop
Brisbane QLD 4003
Telephone: +61 7 3228 0000
Facsimile:
+61 7 3228 0099
Email:
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.
THE STAR ENTERTAINMENT GROUP
145
SHAREHOLDER INFORMATION
AS AT 23 AUGUST 2019
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
Telephone:
+61 1300 880 923 (toll free within Australia)
Facsimile:
+61 2 9287 0303
E-mail:
starentertainment@linkmarketservices.com.au
Website:
www.linkmarketservices.com.au
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.
2019 CORPORATE GOVERNANCE STATEMENT
The 2019 Corporate Governance Statement can be found on The Star Entertainment Group’s website
www.starentertainmentgroup.com.au/corporate-governance.
2019 ANNUAL GENERAL MEETING
The Annual General Meeting of The Star Entertainment Group Limited will be held on Thursday, 24 October 2019 at
The Westin Brisbane, 111 Mary Street, Brisbane, Queensland, commencing at 11:00am (Queensland time).
REPORTING AND ASSUARANCE
In FY2019, The Star Entertainment Group sought to apply a ‘core’ level of compliance against the Global Reporting
Initiative – a globally recognised sustainability reporting framework, which demonstrates our efforts to continually
improve our sustainability practices and reporting.
The Star Entertainment Group has obtained ‘Limited Assurance’ by EY for FY2019 across its energy and carbon data.
ANNUAL REPORT 2019
146
COMPANY DIRECTORY
REGISTERED OFFICE
The Star Entertainment Group Limited
Level 3, 159 William Street
Brisbane Qld 4000
Telephone: + 61 7 3228 0000
Facsimile: + 61 7 3228 0099
Email: investor@star.com.au
WEBSITE
www.starentertainmentgroup.com.au
NEW SOUTH WALES OFFICE
Level 3, 60 Union Street
Pyrmont NSW 2009
Telephone: + 61 2 9657 7600
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: 1800 700 700
Telephone: + 61 2 9777 9000
www.thestarsydney.com.au
THE STAR GOLD COAST
Broadbeach Island
Broadbeach QLD 4218
Reservations: 1800 074 344
Telephone: + 61 7 5592 8100
www.thestargoldcoast.com.au
TREASURY CASINO AND HOTEL BRISBANE
George Street
Brisbane QLD 4000
Reservations: 1800 506 889
Telephone: + 61 7 3306 8888
www.treasurybrisbane.com.au
QUEEN’S WHARF BRISBANE
General Enquiries
Telephone: 1800 104 535
Email: qwbenquiries@destinationbrisbane.com.au
www.queenswharfbrisbane.com.au
AUDITOR
Ernst & Young
ABOUT THIS ANNUAL REPORT
CURRENCY
References to currency in this Annual Report are in
Australian Dollars unless otherwise stated.
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.
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2019
147
147
COMPANY DIRECTORY
KEY DATES FOR FY2019/20*
FY2019 FULL YEAR RESULTS ANNOUNCEMENT:
16 August 2019
FINAL DIVIDEND RECORD DATE:
22 August 2019
FINAL DIVIDEND PAYMENT DATE:
26 September 2019
2019 ANNUAL GENERAL MEETING:
24 October 2019
FY2020 HALF YEAR RESULTS ANNOUNCEMENT:
20 February 2020
2020 FINANCIAL YEAR END:
30 June 2020
FY2020 FULL YEAR RESULTS ANNOUNCEMENT:
20 August 2020
2020 ANNUAL GENERAL MEETING:
22 October 2020
*2020 dates are subject to change
ANNUAL REPORT 2019 148
THE STAR ENTERTAINMENT GROUP