ANNUAL
REPORT
2020
CONTENTS
SECTION
CONTENTS
1
2
3
4
5
6
7
8
INTRO
03
04
OUR VISION
OUR HIGHLIGHTS
MESSAGES
06
08
CHAIRMAN
CEO
BOARD AND EXECUTIVE TEAM
10
12
BOARD OF DIRECTORS
EXECUTIVE TEAM
GROUP PERFORMANCE
14
15
FY2020 GROUP PERFORMANCE
PROPERTY PERFORMANCE HIGHLIGHTS
KEY PROJECTS
16
18
19
QUEEN’S WHARF BRISBANE
THE STAR SYDNEY
THE STAR GOLD COAST
SUSTAINABILITY
20
20
22
24
30
32
33
34
37
38
39
SUSTAINABILITY TIMELINE
SUSTAINABILITY HIGHLIGHTS
SUSTAINABILITY STRATEGY
DELIVERING WORLD-CLASS PROPERTIES
LEADING COMPANY
WORK HEALTH AND SAFETY
GUEST WELLBEING
TRUSTED COMMUNITY PARTNERS
TALENTED TEAMS
SUPPORTING TEAM MEMBER WELLBEING AND CONNECTIVITY THROUGH COVID-19
DIVERSITY AND INCLUSION GROUPS
DIRECTORS’, REMUNERATION AND FINANCIAL REPORT
42
57
78
DIRECTORS’ REPORT
REMUNERATION REPORT
FINANCIAL REPORT
SHAREHOLDER INFORMATION
141
144
145
146
146
146
SHAREHOLDER INFORMATION
CORPORATE INFORMATION
COMPANY DIRECTORY
CORPORATE GOVERNANCE STATEMENT DETAILS
ANNUAL GENERAL MEETING DETAILS
KEY DATES
Front cover: Queen’s Wharf Brisbane development planned to open in 2022.
© Destination Brisbane Consortium. Artist impression only. Subject to approvals.
PAGE 3
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.
In FY2020, The Star Entertainment Group made significant strides in realising its vision of becoming
Australia’s leading integrated resort company despite the disruptive impacts of COVID-19.
The construction phase of projects in South East Queensland continued at pace, while The Star Sydney
delivered the new Sovereign, a world-class premium gaming facility.
Queen’s Wharf Brisbane integrated resort development.
© Destination Brisbane Consortium. Artist impression only. Subject to approvals.
PRIORITIES
VALUES
SERVICE COMMITMENTS
PILLARS
THRILLING
EXPERIENCES
ACCESSIBLE LUXURY
SHAREHOLDER VALUE
OWNERSHIP
WORLD-CLASS
PROPERTIES
TRUE TEAMWORK
WELCOMING
CITY PRIDE
LOCAL SPIRIT
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
ANNUAL REPORT 2020 PAGE 4
PAGE 5
OUR HIGHLIGHTS
FINANCIALS
NORMALISED EBITDA ($m)
NORMALISED NPAT ($m)
(before significant items)
568.0
556.5
429.6
420.7
600
500
400
300
200
100
0
244.1
223.7
176.1
120.8
300
250
200
150
100
50
0
FY2018
FY2019
FY2020
(Jul 2019-Feb 2020)
FY2018
FY2019
FY2020
(Jul 2019-Feb 2020)
FY2020 FULL YEAR
FY2020 FULL YEAR
OVER $590 MILLION
estimated spend on 3,000+
suppliers Australia wide
‘GLOBAL LEADER’
Casino and Gaming Industry
sector on the 2019 Dow Jones
Sustainability Index
FORBES 5 STAR RATING
The Darling Sydney was the only luxury
hotel in New South Wales to receive
the prestigious Forbes Five-Star rating
in FY2020. It has achieved this for four
consecutive years.
AROUND $21 MILLION
in financial hardship assistance and
paid pandemic leave distributed to
team members
REFINITIV DIVERSITY &
INCLUSION INDEX
Ranked 2nd in Australia, and
25th globally
EQUIVALENT OF 100,900 MEALS
donated to food rescue charities in
New South Wales and Queensland
Dorsett hotel and apartments tower currently under development.
© Destination Gold Coast Consortium. Artist impression only.
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 6
MESSAGES
PAGE 7
I also thank my fellow directors on the Group’s now
well-established Board for their ongoing commitment and
decisiveness throughout the challenging year that was
FY2020. As announced with the company’s FY2020 financial
results, Zlatko Todorcevski retired from the Board on
31 August 2020 following his appointment as Chief
Executive Officer and Managing Director of Boral Limited.
On behalf of the Board, and personally, I thank Zlatko for
his substantial contribution and service, and wish him the
very best in his new role.
It was a year where unexpected obstacles emerged at
a time when the business had pleasing momentum.
Together, as a Board and Management, we acted swiftly
but with the necessary caution to optimise in the final few
months the opportunity to resume operations, albeit under
restrictive conditions.
On behalf of the Board, I extend an invitation to all
shareholders to join and experience our first virtual Annual
General Meeting to be held via our share registry’s online
platform in October 2020 and thank you, as always, for your
support for the company and its vision to be Australia’s
leading integrated resort company.
John O’Neill AO
Chairman
The Star Entertainment Group
CHAIRMAN’S
MESSAGE
The 2020 financial year was an extraordinary and challenging period. The unforeseen emergence of COVID-19
and the attendant recession tested the resilience and agility of entire communities. The impact on the
business sector and the domestic and global economy in general, and the tourism/hospitality/entertainment
industries on a micro level, was pronounced. The word unprecedented was oft-used but accurately captured
the disruption and pain experienced by individuals, corporations and populations worldwide.
The closure of Australia’s international borders, followed
by the introduction of restrictions on movements and
gatherings as well as spatial distancing restrictions and the
eventual shutdown of our properties in March 2020 with less
than a day’s notice, required decisive action.
Due to those Government directed closures, more than 95%
of our almost 9,000 staff had to be temporarily stood down.
The company was necessarily focused on reducing cash burn
and increasing liquidity. Operating expenditure was reduced
from just under $100 million per month to $10 million a
month by May 2020. Negotiations commenced swiftly, and
were successful, for The Star Entertainment Group to obtain
increased liquidity from domestic banks and to secure
covenant waivers from the banks and USPP note holders.
I want to thank Managing Director and CEO Matt Bekier, and
his Management team, for traversing such difficult terrain to
reach the outcomes achieved.
The personal and human impacts arising from the crisis were,
and continue to be, significant. The Board and Management
have been mindful of potential ramifications for our
workforce, and mitigation programs developed. All team
members temporarily stood down received two weeks of paid
pandemic leave at the outset of the property shutdowns at
a cost of $18 million. Senior executives took pay cuts and
the Board endorsed reduced directors’ fees. The company
immediately registered for JobKeeper and a hardship
program was introduced, which saw around $3 million
distributed to more than 600 of our most impacted staff.
As we move into FY2021, we will continue to have the
best interests of our team members at the forefront of
our thinking.
For the period from July 2019 to February 2020, and prior
to the property closures, the company delivered a strong
earnings result, as detailed further in this Annual Report.
This follows the successful implementation of organisational
structure reset and cost management measures implemented
from 2HFY2019. In light of this performance in 1HFY2020
the Board declared an interim dividend of 10.5 cents per
share (fully franked). With the onset of COVID-19 related
restrictions, payment of the interim dividend was deferred
until 2 July 2020 and was fully underwritten. As announced
on 31 March 2020 in conjunction with the deferral of the
interim dividend, there was no final dividend for FY2020.
The Board remains committed to maintaining a balance
sheet that positions The Star Entertainment Group for the
post-COVID-19 recovery.
I take this opportunity to confirm to shareholders that
the fundamental earnings prospects for the Group remain
unchanged, underpinned by valuable long-term licences in
sought after destinations, and with ongoing investments in
our network of integrated resorts. The Board and Management
therefore remain focused on continuing to deliver upon the
company’s strategic growth projects. This includes large-scale
projects with the company’s long-term, strategic joint venture
partners Far East Consortium and Chow Tai Fook Enterprises.
In particular, the following underline the strength of strategic
and execution capability across the joint venture partners:
• The uninterrupted and continued on time and on
budget delivery of the Queen’s Wharf Brisbane project,
coupled with finalising its $1.6 billion project debt
funding during FY2020.
• The uninterrupted delivery with our joint venture partners,
of the Dorsett hotel and apartment tower at the Gold Coast
to program.
Importantly in Queensland, we also welcomed the end
of the Gold Coast second casino licence process by the
Queensland Government in July 2020.
On behalf of the Board, I congratulate Matt Bekier and
the Management team on their continued commitment
and energy, which enabled delivery of key strategic
priorities in FY2020 while managing the response to the
COVID-19 situation.
Dorsett hotel and apartments tower currently under development.
© Destination Gold Coast Consortium. Artist impression only.
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 8
MESSAGES
PAGE 9
CEO’S
MESSAGE
The 2020 financial year presented an unexpected adversary in the COVID-19 pandemic. But the challenges
presented to The Star Entertainment Group and other organisations, as outlined by the Chairman,
also shone a light on the quality of our workforce. I want to take the opportunity at the start of this
message to extend my sincerest gratitude to our committed team members whose efforts in such difficult
times have been inspirational.
The enforced shutdowns of our properties in Sydney and
Queensland occurred in late March 2020 with the warning
that we may have to endure those closures for up to six
months. However, when opportunities arose to partially open
at various stages of the COVID-19 journey, our teams acted
safely, swiftly and efficiently to ensure operations could be
resumed in different forms or with limited capacity.
On 15 May 2020, the first easing in restrictions saw Sokyo
at The Star Sydney become the first high-end restaurant
in Australia to reopen, with only 10 guests permitted to
attend. The following night, Nineteen at The Star Gold Coast
was the first high-end restaurant in Queensland to resume
operations. On 1 June 2020, we partially reopened Sydney
gaming areas. Queensland casinos followed on 3 July 2020.
These were welcome milestones, but capacity constraints
continued to prevent us returning to pre-COVID operational
levels. As a result, around 30% of our workforce remained
stood down by the end of FY2020. The importance of our
people and the personal hardships many of them faced were
never lost on Management and the Board.
Importantly, we remained focused on delivering our strategic
objectives. We concluded a gaming tax and gaming machine
exclusivity agreement with the NSW Government that
ensures The Star Sydney will be the only casino in the State
to operate gaming machines until at least 2041. Our new
$250 million Sovereign area for high-tier loyalty members
also opened to hugely supportive reviews. We believe it to be
the finest private gaming room in the country.
Another key strategic goal was achieved on the Gold Coast
where the long-standing Global Tourism Hub process was
terminated in mutual agreement with the Queensland
Government. After three attempts in eight years to generate
interest for a multi-billion-dollar development and a second
casino, the threat of competition on the Gold Coast has
faded. In light of our continued investment in South East
Queensland, we believe the Gold Coast market will not
support a second casino.
In Brisbane, the $1.6 billion project debt funding package
for the Queen’s Wharf project was executed on terms agreed
pre-COVID-19. Around 75% of total project costs are now
under lump sum terms. COVID-19 restrictions that led to
considerably reduced vehicular traffic also allowed work at
Queen’s Wharf to proceed with extended hours for truck
access. The project remains on time and on budget for a
2022 opening.
During the last four months of FY2020, the need to be agile
and adhere to COVID-Safe practices also created opportunities
to develop new ways of working. The “Table for 2” high-end
dining-at-home experience was a successful entrepreneurial
initiative that has long-term possibilities.
The financial year returned a strong performance in the
pre-COVID-19 period from July 2019 to February 2020,
delivering record normalised and domestic earnings against
the prior comparable period. While revenue was solid in the
period, much of the earnings growth was the result of the
reorganisation undertaken early in the financial year that
yielded a more effective structure and released some
$45 million of annual costs.
The onset of COVID-19 and the forced closure of all our
properties stopped the positive momentum and caused a
significant deterioration of the full year financial results.
As earlier indicated, a comprehensive response to mitigate
these impacts was undertaken. Detailed results are
contained elsewhere in this Annual Report.
The Group continues to follow growth strategies designed
to install the organisation as Australia’s leading integrated
resort company. There were also achievements in FY2020
that showcased our commitment to tourism, sustainability
and the cities in which we operate, including:
• Retaining a Forbes Five-Star rating for The Darling hotel
in Sydney
• Recognition as the global leader in the Casino & Gaming
Industry sector of the Dow Jones Sustainability Index for
the fourth consecutive year
• Ranking 2nd in Australia and 25th globally on the 2019
Refinitiv Diversity and Inclusions Index
• Achieving ‘Bronze Employer’ status at the Australian
LGBTQ Inclusion Awards
• Committing to net-zero carbon emissions for wholly
owned and operated assets by 2030
• Ongoing partnership with the Sydney Gay and
Lesbian Mardi Gras
• Celebrating International Women’s Day with the
‘Walk and Talk for Women in Leadership’
• Donating almost 34,000kg of food to charities.
The Star Entertainment Group has the following priorities
for the 2021 financial year:
• Operations
0 Driving a COVID-19 earnings recovery, including a
rapid refocus on local markets and domestic tourism,
addressing Sydney competition, operating expenses
and liquidity
• Balance Sheet
0 De-gearing through cash preservation and
capital recycling
• Execute the capital light model
0 Further deliver on the centralised operating model,
complete investment projects on time and budget
and execute in a capital efficient way.
In closing, I wish to thank the Board and Management
for their invaluable support during the unexpected and
challenging circumstances we encountered in FY2020.
I could not have asked more of my Management team and
our front-line staff. I greatly appreciate their efforts.
Matt Bekier
Managing Director and Chief Executive Officer
The Star Entertainment Group
Queen's Wharf Brisbane integrated resort development.
© Destination Brisbane Consortium. Artist impression only. Subject to approvals.
ANNUAL REPORT 2020ANNUAL REPORT 2020
PAGE 10
BOARD AND EXECUTIVE TEAM
BOARD AND EXECUTIVE TEAM
PAGE 11
BOARD OF DIRECTORS
JOHN O’NEILL AO | Chairman and Non-Executive Director
Diploma of Law; Foundation Fellow of the Australian Institute of Company Directors; Member 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 and a member of the Advisory Council
of China Matters. He is also a member of the 2032 Brisbane Olympic Bid Advisory Board to the Premier
of Queensland.
MATT BEKIER | Managing Director and Chief Executive Officer
Master of Economics and Commerce; PhD in Finance
Matt Bekier is a member of the Board of the Australasian Gaming Council.
Mr Bekier was previously Chief Financial Officer and Executive Director of the Company and also
previously Chief Financial Officer of Tabcorp Holdings Limited from late 2005 and until the demerger
of the Company and its controlled entities in June 2011.
Prior to his role at Tabcorp, Mr Bekier previously held various roles with McKinsey & Company.
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 is also a
Non-Executive Director of Redbubble Limited and Chair of its People and Nomination Committee.
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.
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 a Director of Carnival Corporation & plc, and is a member of the National
Indigenous Culinary Institute Advisory Board.
Ms Lahey was previously the Chair of Carnival Australia and the Chairman Australasia of Korn Ferry
International. In addition, Ms Lahey was 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 with over 20 years’ experience as a Non-Executive Director and
board member across a wide range of industries in the private and public sectors. She has extensive
experience in the gaming industry.
Dr Pitkin is a former lawyer and senior corporate partner with a national law firm.
Dr Pitkin is currently the Chair of Super Retail Group Limited and a Non-Executive Director of Link
Administration Holdings Limited.
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 Honorary Treasurer of the Bradman Foundation.
ZLATKO TODORCEVSKI | Non-Executive Director (Retired on 31 August 2020)
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 a Non-Executive Director of Coles Group Limited and a member of the
Council of the University of Wollongong. He is also the Chief Executive Officer & Managing Director
of Boral Limited, taking up the position on 1 July 2020.
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 12
BOARD AND EXECUTIVE TEAM
EXECUTIVE TEAM
BOARD AND EXECUTIVE TEAM
PAGE 13
MATT BEKIER | Managing Director and Chief Executive Officer
GREG HAWKINS | Chief Casino Officer (NSW)
As CEO of The Star Entertainment Group, Matt has guided the organisation and each of its properties
through a period of 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 a $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 company.
HARRY THEODORE | Chief Financial Officer
Harry joined The Star Entertainment Group in 2011. He was appointed to Chief Financial Officer in
November 2019 and is responsible for the Group’s finance, strategy, investor relations and IT functions.
Prior to his current role, he had several leadership positions including Head of Strategy and Investor
Relations and most recently Chief Commercial Officer – where he led the Queen’s Wharf Brisbane bid
and the Group’s joint venture partnerships with Chow Tai Fook Enterprises and Far East Consortium in
addition to a number of other commercial and finance functions.
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 15 years’ experience in the gaming industry, first with Tabcorp Holdings Limited 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 practised with King & Wood Mallesons in the telecommunications, information
technology and competition law areas.
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, LGBTQI and age
and tracks its performance against internal and external benchmarks. Kim personally champions gender
issues via her association with, and board directorship on, Women in Gaming and Hospitality Australasia.
Greg was appointed to the role of Chief Casino Officer (NSW) at The Star Entertainment Group in
July 2020, and is responsible for The Star Sydney’s gaming strategy and gaming revenue growth.
Prior to his current role, he has served in a variety of senior positions with The Star Entertainment Group
including Group Casino Officer and as Managing Director at The Star Sydney.
He has over 22 years’ experience spanning key Australasian and Asian gaming markets.
Greg joined The Star Entertainment Group from Melbourne where he was Chief Executive of
Crown Melbourne. Prior to this he was based in Macau for five years and oversaw the development
and operation of hotels and casino there, including The City of Dreams integrated resort.
Greg has extensive operational and strategic gaming experience and provides valuable insight into
the Asian VIP and premium mass market sectors.
GEOFF HOGG | Chief Casino Officer (QLD)
Geoff has more than 20 years of operational casino experience at a senior executive level. He was
appointed to his current position on 1 July 2020.
Prior to this, Geoff had groupwide responsibility for operations at The Star Sydney, The Star Gold Coast,
the Gold Coast Convention & Exhibition Centre and Treasury Brisbane. He was also 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 Board Director of Major Events Gold Coast.
GEORGE HUGHES | Chief Marketing Officer
George joined The Star Entertainment Group in 2017 and is responsible for its marketing activities.
Prior to that, he worked for 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 the 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 has a 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.
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, as well as internal communications.
In addition to her role with The Star, Alison is Chair of the Brisbane Festival board, an executive
committee member of The Committee for Brisbane, Vice President of the Queensland Futures Institute
Corporate Affairs Council and a Board Director of Women in Gaming and Hospitality Australasia.
Prior to joining The Star Entertainment Group, Alison worked in the public and private sectors in
information and communications technology, transport, energy, police and corrective services.
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 14
GROUP PERFORMANCE
GROUP PERFORMANCE
PAGE 15
FY2020 GROUP PERFORMANCE
PROPERTY PERFORMANCE HIGHLIGHTS
Group Performance Highlights
Sydney
The Star Entertainment Group delivered strong performance across all business segments before the onset of COVID-19.
However, FY2020 results were impacted by temporary property closures from 23 March 2020.
The Group implemented comprehensive actions to mitigate the effect of the pandemic.
The Group’s long-term growth strategy remains unchanged, with key milestones achieved over FY2020 despite
COVID-19 disruptions.
NORMALISED
STATUTORY
Jul 19 to Feb 20
FY 2020
Jul 19 to Feb 20
FY 2020
$m
vs pcp
$m
vs pcp
$m
vs pcp
$m
vs pcp
1,817.7
↑7.5%
1,972.9
↓21.1% 1,586.1
↓7.6%
1,748.9 ↓30.4%
1,527.4
↑4.2%
1,657.1
↓23.3%
1,347.4
↓10.1% 1,487.0
↓31.1%
420.7
↑12.1%
429.6
↓22.8%
263.8 ↓35.0%
282.0 ↓49.0%
Gross Revenue
Net Revenue1
EBITDA2
NPAT3
• Solid earnings growth on flat revenue prior to COVID-19
• Domestic earnings growth accelerated from 1H FY2020 into January-February 2020 vs pcp
• Operating expenses down 1.7% prior to COVID-19
• International VIP Rebate business broadly stable prior to COVID-19
Gross Revenue
Net Revenue
EBITDA
NORMALISED
STATUTORY
Jul 19 to Feb 20
FY 2020
Jul 19 to Feb 20
FY 2020
$m
vs pcp
$m
vs pcp
$m
vs pcp
$m
vs pcp
1,076.0
↑0.3%
1,182.5
↓27.5% 1,051.0
↑3.9%
1,169.5
↓25.4%
928.9
255.2
↑1.1% 1,016.4
↓26.1%
918.1
↑4.8% 1,022.3
↓21.9%
↑6.3%
276.9
↓24.6%
246.9
↑21.4%
284.1
↓7.6%
176.1
↑15.6%
120.8 ↓46.0%
61.7 ↓64.6%
(94.6) ↓147.8%
Queensland (Gold Coast and Brisbane)
Strong performance prior to COVID-19 (July 2019 to February 2020 vs pcp4),
FY2020 results impacted by COVID-19 property closures
• Normalised5 NPAT up 15.6% prior to COVID-19, down 46.0% over FY2020
• Domestic EBITDA up 8.3% with margin expansion prior to COVID-19
• Statutory results impacted by unusually low actual win rate in International VIP Rebate business
Comprehensive response to mitigate COVID-19 impacts
• Safeguarded staff and customers
• Secured $200 million of additional liquidity and June 2020 covenant waivers
• Preserved cash (reduced expenditures, underwritten interim dividend, suspension of dividend policy)
• $112 million post-tax significant items largely COVID-19 related
Strategy unchanged, key milestones achieved
QUEEN’S WHARF BRISBANE
• Construction proceeding to plan, approximately 75% under lump-sum contract
• Debt financing completed on terms agreed prior to COVID-19
THE STAR SYDNEY
• Agreed to long-term gaming tax and casino electronic gaming machine exclusivity through to FY2041
• Long-term development potential
THE STAR GOLD COAST
• Dorsett hotel and apartments tower construction proceeding to plan
• Favourable conclusion to Gold Coast second casino process.
• Very strong normalised earnings growth prior to COVID-19
• Very strong domestic earnings growth accelerated into January-February 2020
• Operating costs well managed
• Gold Coast demonstrating improved returns on investment – normalised EBIT up 69.8% prior to COVID-19
• Statutory results impacted by unusually low actual win rate in International VIP Rebate business
Gross Revenue
Net Revenue
EBITDA
NORMALISED
STATUTORY
Jul 19 to Feb 20
FY 2020
Jul 19 to Feb 20
FY 2020
$m
vs pcp
$m
vs pcp
$m
vs pcp
$m
vs pcp
741.7 ↑20.2%
790.4
↓9.1%
535.1 ↓24.2%
579.4 ↓38.8%
598.5
↑9.5%
640.7 ↓18.5%
429.3 ↓31.0%
464.7 ↓45.3%
165.5
↑22.3%
152.7
↓19.2%
16.9
↓91.6%
(2.1) ↓100.9%
Three Year Statutory Financial Results Summary6
Gross Revenue
Net Revenue7
EBITDA
EBIT
Significant Items (after tax)
NPAT (before significant items)
Earnings Per Share (cents)
Full Year Dividend (cents)
FY2018
FY2019
FY2020
$m
vs pcp
$m
vs pcp
$m
vs pcp
2,579.5
↑6.1% 2,514.0
↓2.5%
1,748.9 ↓30.4%
2,084.0
↓1.2% 2,158.1
↑3.6% 1,487.0
↓31.1%
484.4
↓19.2%
552.8
↑14.1%
282.0 ↓49.0%
297.2
↓31.7%
347.0
↑16.8%
77.0
↓77.8%
36.7 ↑312.4%
18.4
↑49.9%
112.2 ↑509.8%
184.8
↓32.4%
216.4
↑17.1%
17.6
↓91.9%
17.5 ↓45.3%
21.6
↑23.4%
(10.3) ↓147.7%
20.5
↑28.1%
20.5
-
10.5 ↓48.8%
1 Net of player rebates and promotional allowances
2 EBTIDA is before equity accounted investments profits/ losses and significant items.
3 Normalised NPAT is after equity accounted investments profits/ losses and before significant items.
4 Prior comparable period.
5 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.
6For further information, please refer to the financial report contained in the Annual Report for the relevant financial year.
7 Net of player rebates and promotional allowances following the adoption of AASB 15 from 1 July 2018. FY2018 comparable
have also been restated.
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 16
KEY PROJECTS
Excavation phase of Queen’s Wharf
Brisbane development at June 2019
QUEEN’S WHARF BRISBANE
The $3.6 billion Queen’s Wharf Brisbane development is
being delivered by Destination Brisbane Consortium – a joint
venture led by The Star Entertainment Group alongside its
Hong Kong-based partners, Chow Tai Fook Enterprises and
Far East Consortium.
Expected to open in late 2022, Queen’s Wharf Brisbane will
transform the CBD with four new luxury hotels, around 50 new
restaurants, cafes and bars, 2,000 residential apartments,
and also offer more than 12 football fields of public space.
During the 2020 financial year, the transformational Queen’s
Wharf Brisbane development reached significant milestones.
These included:
• The completion of Waterline Park, a vibrant new public
space opposite South Bank on the Brisbane riverfront as
well as a 500 metre pedestrian walkway and an upgraded
segregated bikeway
• The launch of the Queen’s Wharf Brisbane visitor centre
and the Queen’s Wharf Residences display suite
• The near completion of the five levels of basement car park
levels and excavation works. Close to 400,000m3 of material
removed from the site, 90 per cent of which was recycled
• The commencement of construction of all four towers,
structures that will house three of four new luxury hotel
brands as well as the 667-apartment Queen’s Wharf
Residences tower
• The progression of ‘The Landing’ which provides 6,500m2
of new public space that sits above the river opposite
South Bank, to become Brisbane’s newest parkland.
With main construction works well underway, the development
will continue to take shape across the 2021 financial year.
The Star Entertainment Group will continue to operate
Treasury Brisbane until the new integrated resort opens and
the transition to a new casino occurs.
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.
Queen's Wharf Brisbane integrated resort development.
© Destination Brisbane Consortium. Artist impression only. Subject to approvals.
Construction phase of Queen’s Wharf
Brisbane development at June 2020
ANNUAL REPORT 2020 PAGE 18
KEY PROJECTS
KEY PROJECTS
PAGE 19
THE STAR SYDNEY
In the 2020 financial year, The Star Entertainment Group
delivered several key projects at The Star Sydney, including:
• The launch of Bar Tikram, led by The Star Sydney’s
talented Executive Chef, Dany Karam of BLACK Bar & Grill,
showcasing a relaxed Mezze style share food menu
• The new Sovereign (Sydney’s best private gaming and
entertainment venue) was completed, with the official
launch taking place on 3 July 2020. The facility consists of:
5,000m2 floor space including four private dining
rooms and gaming salons
83 pieces of multicultural art
5 tonnes of Turkish and Italian marble
A 500,000-piece stainless steel sculpture by
Beijing artist Zheng Lu
Views overlooking Sydney’s Darling Harbour
A new ‘Chairman’s’ premium gaming area for our
Diamond members and their guests.
THE STAR GOLD COAST
The 2020 financial year saw the next phase of
The Star Gold Coast’s $2 billion master plan continued, with
the following key projects advanced during the year:
• Construction of stage one, the 700-plus room Dorsett hotel
and The Star Residences apartment tower continued.
The development (being delivered by Destination
Gold Coast Consortium, 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) is
expected to be completed in 2022
• The second stage will deliver a 650-plus room 5-star hotel
and apartments tower (also being delivered by Destination
Gold Coast Consortium). Pre-sales of the residential
apartments are progressing.
The $250 million Sovereign is Sydney’s best premium gaming and entertainment venue
The Star Gold Coast will be home to Australia’s first Dorsett hotel, complete
with signature views of the Gold Coast and complementary resort amenities.
The hotel and apartments tower is due for completion in 2022.
Development of the Dorsett hotel
and apartments tower over FY2020
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 20
SUSTAINABILITY
SUSTAINABILITY
PAGE 21
SUSTAINABILITY TIMELINE
Sustainable Design Guidelines
first released
Waste Management Strategy
developed and expansion of
recycling streams to include
organics in Sydney
Resource consumption metrics
and targets developed and a
reporting framework introduced
Completed $870 million
transformation of The Star Sydney,
and construction of The Darling
Commenced Sustainability Team
Member Engagement Program
Released the Group’s first
Sustainability Strategy
Group and Property Sustainability
Committees commenced
Listed on the FTSE4 Good Index
Committed to long term carbon
and water reduction targets to
achieve a 30% reduction by
2023 against the FY2013 base
year on an intensity basis
Achieved the global leadership
position of the Casino and
Gaming Industry sector in
the DJSI
Qualified for inclusion
in RobecoSAM’s
‘The Sustainability Yearbook’
Rebranded to “The Star
Entertainment Group”
The Star Entertainment Group
is selected by the Queensland
Government as preferred tenderer
for Queen’s Wharf Brisbane
Sustainable Procurement
Policy released
Completed portfolio wide
energy and water audits
Launched the Energy and
Water Project Pipeline to
target resource reduction
SUSTAINABILITY HIGHLIGHTS
Achieved the global leadership position
of the Casino and Gaming Industry
sector in the Dow Jones Sustainability
Index for the fourth consecutive year
(2016 - 2019)
LAUNCHED
‘Beyond 2020 The Star’s
Sustainability Action Plan’
2022 &
BEYOND
Opening of Dorsett hotel
and apartments tower at
The Star Gold Coast
(early 2022) Opening of
Queen’s Wharf Brisbane (2022)
Targeting 90% coverage of
third-party certified environmental
ratings across the Group’s
portfolio by 2022
45% female, 45% male (with
remaining 10% gender neutral)
representation in level 1-3
leadership levels by 2025
20% Asian representation in
leadership levels 1-3 by 2025
Achieved 5 Stars in the Group’s
first certified NABERS Energy
Tenancy rating for the Sydney
corporate office
Queen’s Wharf Brisbane becomes
the first development in Brisbane
to be awarded a 6 Star Green
Star Communities rating by the
Green Building Council of Australia
Conducted climate impact risk
assessments with mitigation
and adaptation actions
Launched new Sustainable Design
and Operational Standards for
more energy and water efficient
buildings
Retained DJSI leadership position
of the Casino and Gaming Industry
sector (for second year)
Launched ‘Beyond 2020 – The
Star’s Sustainability Action Plan’
Committed to net-zero carbon
emissions for our wholly owned
and operated assets by 2030
Achieved third-party certified
environmental ratings for over
50% of the Group’s portfolio
Donated or scheduled to recycle
100% of uniforms from the opening
of the new Sovereign
Awarded a ‘Bronze Employer
Recognition’ at the 2020 Australian
LGBTQ Inclusion Awards
Targeting completion of the first
Green Star Performance rating
for The Star Gold Coast
Targeting the release of the
Group’s first stand alone
Sustainability Report
Renewed Green Event Guide
for guests to be released
An agreement to source
a minimum of 25%
renewable energy
Reporting in alignment with
the United Nations Sustainable
Development Goals and targets
Completion of the Group’s carbon
emissions reduction pathway
towards net-zero by 2030
First Global Reporting
Initiative Report released
Achieved a 16.7% reduction
in carbon emissions intensity
from the FY2013 base year
Responsible Supply Chain
Management Plan developed
for implementation
Supplier Code of Conduct released
Achieved a '5 Star Green Star
Interiors' rating for the Sydney
corporate office
Retained DJSI leadership position
of the Casino and Gaming Industry
sector (for third year)
Launch of group-wide Single-Use
Plastic Reduction Commitment
Completed 50 projects within the
Energy and Water Project Pipeline
– saving $4.3m+ over previous
five-year period
Water’s Edge Parkland and
Walkway at Queen’s Wharf
Brisbane opened to the public
Achieved a ‘Green Star’
Performance rating
for The Star Sydney
Maintained a 5 Star NABERS
Energy Tenancy rating for the
Sydney corporate office
Funded the Group’s first Seabin at
Jones Bay Wharf to reduce litter
and improve water quality
Recognised on the 2019 Refinitiv
Diversity and Inclusion Index
(second in Australia and 25th
globally)
Retained DJSI leadership position
of the Casino and Gaming Industry
sector (for fourth year)
Committed to net-zero carbon
emissions for our wholly owned
and operated assets by 2030
Over 33,600 kilograms or the
equivalent of 100,900 meals
donated to food rescue charities
on the 2019 Refinitiv Diversity
and Inclusion Index (2nd in
Australia and 25th globally)
‘Bronze Employer Recognition’
at the 2020 Australian LGBTQ
Inclusion Awards
33,600
KG
RECOGNISED
AWARDED
Achieved third-party certified
environmental ratings for over 50%
of the Group’s portfolio
Donated or scheduled to recycle
100% of uniforms from the
opening of the new Sovereign
Maintained a 5 Star NABERS Tenancy
rating for the Sydney corporate office
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 22
SUSTAINABILITY
SUSTAINABILITY
PAGE 23
SUSTAINABILITY STRATEGY
The Star Entertainment Group’s sustainability approach
continues to focus on creating long-term value in the
management of environmental, social and governance risks
and opportunities and increasing performance year on year.
In FY2020, the Group’s sustainability strategy ‘Our Bright
Future’ entered its fourth year. The sustainability strategy
combines the Group’s key priorities and objectives in a
four-pillar framework that supports the Group’s business
plan. The 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.
MATERIALITY
The Group remains focused on identifying and responding
to material issues that are reaffirmed annually through our
rigorous materiality assessment process. The materiality
assessment identifies the Group’s key emerging and
operational environmental, social and governance issues
and seeks to respond to these as part of the Sustainability
Strategy’s key priorities.
In the 2020 financial year, the Group’s key material issues
have remained consistent with the previous year.
As a result of aligning the materiality assessment with the
United Nations Sustainable Development Goals and Targets,
the Group is able to support the goals further through
business key performance indicators and targets within the
sustainability strategy and the sustainability action plan.
The FY2020 materiality assessment process was completed
and validated in mid-March 2020. Since that time, the
business has continued to monitor the impacts of the
COVID-19 pandemic and expects any changes to be
reflected in the materiality assessment to be completed
in March 2021.
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’.
Most Material Issues
Community wellbeing
and trust~
Responsible gaming~
Privacy and
security^
Ethical business
operation~
S
R
E
D
L
O
H
E
K
A
T
S
O
T
E
C
N
A
T
R
O
P
M
I
Climate resilience^
Sustainable and
ethical supply chain^
Healthy environments~
Sustainable precincts^
Minimising environmental
impacts~
ESG transparency~
Guess safety &
security~
Employee health,
safety & wellbeing~
Sustainable business
performance^
Diversity inclusion
and equal opportunity~
Employee engagement
and development~
IMPORTANCE TO THE STAR
LEADING
COMPANY
GUEST
WELLBEING
WORLD-CLASS
PROPERTIES
TALENTED
TEAMS
^
EMERGING/
STRATEGIC
~
ONGOING/
OPERATIONAL
MATERIAL ISSUE
UNITED NATIONS SUSTAINABLE
DEVELOPMENT GOALS
LEADING
COMPANY
WORLD-CLASS
PROPERTIES
GUEST
WELLBEING
TALENTED
TEAMS
Ethical business
operation
Community
wellbeing and trust
9, 16
16, 17
Privacy and security
16
Sustainable and
ethical supply chain
9, 12, 17
ESG transparency
12, 16
Sustainable business
performance
8
Climate resilience
7, 13
Minimising
environmental
impacts through
operating efficiently
7, 12, 13, 14,
15
Sustainable
precincts
9, 11, 13, 14,
15
Responsible
gaming
Safety and
security
Healthy
environments
3, 11
3
3
Diversity, inclusion
and equal
opportunity
5, 8, 10
Employee engagement
and development
4, 8
Employee health,
safety and
wellbeing
3, 8
ANNUAL REPORT 2020ANNUAL REPORT 2020
PAGE 24
SUSTAINABILITY
SUSTAINABILITY
PAGE 25
DELIVERING WORLD-CLASS PROPERTIES
The Star Entertainment Group develops and operates
world-class, liveable, environmentally sustainable and
resilient integrated resorts and precincts. The Group
continues to support this strategic commitment by
designing and building for efficiency and it commitment
to third party environmental ratings.
Targeting 90% coverage of third-party
certified environmental ratings across the
Group’s portfolio by 2022
Targeting net-zero carbon emissions
by 2030 for the Group’s owned and
operated assets
Targeting a 30% reduction in carbon
and water intensity by FY2023 against
the FY2013 base year
To date, the Group has third party certified environmental
ratings for over 50% of its controlled properties which
includes a 5 Star Green Star Interiors rating, a 5 Star
NABERS Tenancy rating, a Green Star Performance rating
and commitments to further Green Star Performance and
Design and As Built ratings.
Destination Gold Coast Consortium (on behalf of its joint
venture partners) continued to work towards a 5 Star
Green Star Design and As Built rating commitment for the
Dorsett hotel and apartments tower (to be constructed on
Broadbeach Island, Broadbeach, Queensland).
During the 2020 financial year, a Green Star Commitment
Agreement was also registered for the second tower (Tower 2)
to achieve a 5 Star Green Star Design & As Built v1.2 rating
in line with the Dorsett hotel and apartments tower.
As part of the construction of Dorsett hotel and apartments
tower, a successful design review was submitted during the
year to the Green Building Council of Australia. To date, the
tower has recycled over 90% of its construction waste and is
targeting outcomes above the requirements of the 5 Star Green
Star rating where possible. In the manufacture of the concrete
required for construction, 40.4% of the portion of Portland
cement has been replaced with a more sustainable option, fly
ash, which is a by-product from industrial processes. To ensure
the use of recycled content, 46% of the fine aggregate in the
concrete mix is repurposed, manufactured sand.
To reduce potable water consumption, 93% of the water used
in the concrete manufacture is reclaimed and/or recycled.
Destination Brisbane Consortium (on behalf of The Star
Entertainment Group and its joint venture partners)
continues towards delivery of a 6 Star Green Star
Communities rating for the Queen’s Wharf Brisbane
precinct, 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.
CLIMATE CHANGE RESPONSE
The Star Entertainment Group has identified climate change
as a material issue and acknowledges its potential impacts.
The Group recognises the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD), and
importantly that the Group’s investments may be susceptible
to future changes in climate.
Within the year, the Group has been working to align its
existing climate related projects and targets to the TCFD
recommendations through a progressive roadmap. In 2020,
the Group released its first disclosure report on the company
website detailing our progress to date against the four
framework areas of Governance, Strategy, Risk Management
and Metrics and Targets.
In 2020, the Group expanded its commitment to a low
carbon future by setting a target to achieve net-zero carbon
emissions for its wholly owned and operated assets by
2030 as a long-term measure. The pathway to achieve
this target includes the purchasing of renewable energy
(in progress), the assessment of onsite solar, continuing
the company’s energy efficiency program and developing a
carbon offsetting strategy. The Group remains committed
to immediate action through its interim targets to achieve
a 30% reduction in carbon and water intensity by FY2023
against the base year FY2013.
The Group continues to prioritise and improve the resilience
of business operations and assets. Climate change risk
and response has been embedded into our risk register
and management processes and climate mitigation and
adaptation requirements form part of the Group’s Sustainable
Design and Operational Standards which can be found on
the company website. Resource consumption and carbon
emissions management continue to be both a material issue
and a focus which are managed by the continuation of energy
audits and physical climate risk assessments.
REPORTING AND ASSURANCE
The Star Entertainment Group has prepared its reporting
‘in accordance’ with the Global Reporting Initiative (GRI)
Standards (Core option). The index can be found on the
company website and provides a guide on where information
can be found throughout the Group's reporting suite as it
relates to the GRI reporting requirements. In line with the
Group’s commitment to expanding sustainability disclosures
annually, this report has also included additional disclosures
to progress the reporting level to ‘comprehensive’ over time.
The Star Entertainment Group has obtained ‘Limited
Assurance’ by EY for FY2020 across its energy and
carbon data. The assurance opinion can be found on
the company website.
GREEN BUILDING RATINGS
STATUS
THE STAR ENTERTAINMENT GROUP HAS ACHIEVED 50% THIRD PARTY
CERTIFIED ENVIRONMENTAL RATINGS ACROSS ITS PORTFOLIO
QUEEN’S WHARF BRISBANE
6 Star Green Star Communities v1 rating
6 Star Green Star Design & As Built v1.1 rating for
non-residential new buildings
Industry Best Practice Design & As Built v1.1 ratings for
existing heritage buildings
Green Star Performance ratings for each non-residential
building
THE STAR GOLD COAST, BROADBEACH ISLAND,
BROADBEACH, QLD
Green Star Performance rating
THE DORSETT HOTEL AND APARTMENTS TOWER
5 Star Green Star Design v1.1 Review
5 Star Green Star Design & As Built v1.1 rating
THE STAR GOLD COAST - TOWER 2
5 Star Green Star Design v1.1 Review
5 Star Green Star Design & As Built v1.1 rating
THE STAR SYDNEY, 80 PYRMONT STREET, PYRMONT,
NSW
Green Star Performance rating
THE STAR ENTERTAINMENT GROUP’S SYDNEY
CORPORATE OFFICE, 60 UNION STREET, PYRMONT, NSW
5 Star NABERS Tenancy rating
5 Star Green Star Interiors rating
KEY
COMMITTED
ACHIEVED
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 26
SUSTAINABILITY
RESOURCE EFFICIENCY PROJECTS
The Star Entertainment Group continues to invest in and
enhance its integrated resorts. With several expansion
projects underway, energy use is expected to increase
across the properties in the coming years as we open
and operate more floor space. To mitigate against these
increases, the Group continues to target resource efficiency
through building design and operations and through an
active engineering program to reduce carbon emissions,
energy use and cost.
To ensure energy and water efficiency is achieved in
refurbishment and development projects, the Group’s
Sustainable Design and Operational Standards (available on
the company’s website) have been applied to all large-scale
development projects. The Standards are aligned to green
building ratings criteria and ensure projects achieve best
practice sustainable outcomes.
The Group’s Energy and Water Project Pipeline, first
established in FY2015, continues to prioritise, monitor and
track projects that deliver cost and environmental benefits.
Utilising a building optimisation and analytics platform, a
total of 107 small scale tuning and efficiency projects were
completed from July 2019 to March 2020 at The Star Sydney
and The Star Gold Coast. Several efficiency opportunities
are ongoing at both properties and will continue into
FY2021. To track the benefit of efficiency projects, resource
consumption performance is measured and reported in
absolute terms and as intensity metrics on a per visitor and
per square metre basis.
In FY2020, 21 tuning and efficiency projects were completed
at The Star Sydney, delivering savings of 55,246 kWh in energy
use, 45 tonnes of carbon emissions and $8,287 in cost.
Two trial projects were activated in February 2020 involving
carpark fan sensors and dead band setpoints. The carpark
fan trial project, completed in March 2020, identified benefits
from adjusting temperatures to prevent carpark fans running
excessively for cooling purposes. Standard operating speeds
were reduced from 100% to 60% on average with no
effect to comfort levels. The project is expected to save an
estimated $48,000 per annum. The dead band trial involved
introducing temperature set point dead bands into the air
conditioning logic. As common industry practice, these
adjustments are expected to deliver ongoing savings as our
property reopens to full operating capacity.
The Star Sydney Facilities and Sustainability Team
developed a water saving maintenance program to
test for leakage and excessive tap flowrates.
Since August 2019, more than 350 taps have been
adjusted, with expected savings of 20,000 litres per
day and $23,000 in annual water costs.
A capital upgrade project to seal parts of the main
gaming floor was completed in June 2020 and is
expected to provide tangible energy savings, whilst
also improving guest comfort levels.
At The Star Gold Coast, 86 tuning and efficiency
projects were implemented during FY2020 as a result
of the building optimisation and analytics system,
delivering savings of over 232,620kWh in energy use,
184 tonnes of carbon emissions and $34,893 in cost.
As a result of energy audits, two capital upgrade
projects were completed in FY2020. A heat pump
replacement project is expected to save over
$230,000 in energy use costs per annum and avoid
322 tonnes of carbon emissions per year. A steam
optimisation project is expected to save approximately
$112,000 in energy costs and avoid 173 tonnes of
carbon emissions at the property.
SUSTAINABILITY
RESOURCE PERFORMANCE
PAGE 27
11.4
TONNES
1,335 KG
11.4 tonnes of furniture, equipment,
uniforms and hotel linen donated
– a total of 28.5 tonnes since the
program began
1,335 kilograms of soap
donated to Soap Aid’s
‘Hotel to Hands’ program
13,800
CAPSULES
13,800 Nespresso
capsules recycled
ENERGY AND CARBON EMISSIONS
In the 2020 financial year, the Group’s total emissions in
carbon dioxide equivalents (CO2-e) from purchased gas and
electricity were 94,945 tonnes. This footprint equates to a
decrease of 11.1% from FY2019 which was 106,845 tonnes
and an overall decrease of 12.6% from base year FY2013
which was 108,595 tonnes. The Star Entertainment Group’s
FY2020 emissions were comprised of 8,952 Scope 1 emissions
and 85,993 Scope 2 emissions.
On an intensity basis, carbon emissions per square metre
decreased by 12.6% from 0.35 tonnes CO2-e per square metre
in FY2019 to 0.31 tonnes CO2-e per square metre in FY2020.
Overall carbon emissions intensity per square metre reduced
by 26.2% in FY2020 from FY2013 contributing positively to
the Group’s target to achieve a 30% reduction in emissions
intensity per square metre by FY2023 against base year FY2013.
With 14 million visitors in FY2020 (down from previous years
due to the COVID-19 pandemic) carbon emissions intensity on a
per visitor basis increased from 5.69 kilograms CO2-e per visitor
in FY2019 to 6.38 kilograms CO2-e per visitor in FY2020 which is
expected to decline in FY2021 when venues reopen fully.
The Group’s total energy consumption from purchased gas
and electricity for FY2020 was 555,911 gigajoules (GJ), which
was a 13.1% decrease from FY2019 which was 639,726 GJ and
an 8.5% decrease from base year FY2013.
On an intensity basis, energy per square metre reduced by
14.5% from 2.11 GJ per square metre in FY2019 to 1.80 GJ
per square metre in FY2020 and decreased by 22.7% against
base year FY2013. Energy consumption per visitor increased
in FY2020 by 9.8% from 34.05 MJ per visitor in FY2019 to
37.38 MJ per visitor in FY2020, as a result of reduced visitation
due to COVID-19 impacts.
Energy consumption per visitor increased 0.4% overall from
base year FY2013 and is expected to reduce again in FY2021.
The decline in carbon emissions and energy consumption
both on an absolute and intensity basis was expected due to
property closures and restricted operations between March
and June 2020 in line with Government regulations. Both
large scale plant upgrades and energy efficiency initiatives in
the Group’s Energy and Water Project Pipeline were delivered
between July 2019 and March 2020 contributing to the
energy and carbon emissions reductions within the year.
CARBON EMISSIONS
ENERGY CONSUMPTION
0.42
108,595
0.35
106,845
0.31
94,945
2.34
607,476
2.11
693,726
1.80
555,911
6.65
5.69
6.38
37.22
34.05
37.38
FY2013
(BASE YEAR)
FY2019
FY2020
FY2013
(BASE YEAR)
FY2019
FY2020
CARBON EMISSIONS (TONNES CO2-E)
EMISSIONS INTENSITY (KG CO2-E/VISITOR)
ENERGY CONSUMPTION (GJ)
ENERGY INTENSITY (MJ/VISITOR)
EMISSIONS INTENSITY (TONNES CO2-E/SQM)
EMISSIONS 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, 1.1% of FY2020 utility invoices were unbilled
at the time of reporting (from water), based on cost. The missing usage has been estimated as 0.0% (17MWh) for electricity, 0.0% (31GJ) 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 end of each financial year.
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 28
SUSTAINABILITY
SUSTAINABILITY
PAGE 29
POTABLE WATER USE
INCREASING RECYCLING
PARTNERING AND ENGAGEMENT
The Group’s total potable water consumption was 644,025
kilolitres (kL) in the 2020 financial year, a decrease of 22%
from FY2019 and a decrease of 6.5% from base year FY2013
which was 688,440 kL.
Water consumption intensity per square metre decreased
by 23.3% in FY2020 from 2.73 kL per square metre in FY2019
to 2.09 kL per square metre in FY2020. Water intensity
decreased by 21%, moving towards the Group’s target of a
30% reduction in water intensity per square metre by FY2023
against base year FY2013. On a per visitor intensity basis,
the Group’s water intensity decreased by 1.5% from 43.96
litres per visitor in FY2019 to 43.30 litres per visitor in FY2020.
However, the Group experienced a slight increase of 2.6%
against base year FY2013.
Water efficiency activities (including water auditing and leak
detection projects) were conducted from July 2019 to March
2020 which contributed to the reduction in water use in
FY2020. A significant portion of the reduction during FY2020
was due to property closures and restricted operations from
March 2020 to June 2020 when minimal water was consumed.
The Group remains focused on waste reduction as a
material issue and increasing its recycling targets each year
to lift performance. Waste and recycling figures include all
waste generated from operations. The Group benchmarks
waste and recycling performance against the base year
FY2013 to ensure that improvements are measurable.
In FY2020, the Group diverted 30 recycling streams from
landfill including batteries, organics, soft plastics, cardboard,
linen and uniforms.
The Group’s recycling rates have increased from 10% overall
waste diversion in FY2013 to 37% diversion in FY2020 across
all operations. A slight reduction in recycling rates was
experienced in FY2020 as a result of the waste collection
dock being relocated at The Star Gold Coast which caused
disruption to recycling and waste services. Training and
education remain a priority, with behaviour change activities
scheduled into FY2021 to ensure that recycling intensity
increases over time.
WATER CONSUMPTION
RECYCLING RATES
2.65
688,440
42.19
FY2013
(BASE YEAR)
2.73
825,971
2.09
644,025
43.96
43.30
FY2019
FY2020
0.002
10%
0.03
FY2013
(BASE YEAR)
0.010
39%
0.007
37%
0.16
0.14
FY2019
FY2020
WATER CONSUMPTION (KL)
WATER INTENSITY (L/VISITOR)
WATER INTENSITY (KL/SQM)
RECYCLING RATE (%)
RECYCLING RATE INTENSITY (KG/VISITOR)
RECYCLING INTENSITY (TONNES/SQM)
Notes: 1.1% of FY2020 utility invoices were unbilled at the time of reporting based on cost (from water). The missing usage has been estimated as 5.8% (37ML) for water. The FY2013 base year for waste
has been recalculated. ‘Recycling intensity’ kg/visitor has been used in FY2017 to FY2020, not ‘waste to landfill intensity kg/visitor’ as used in FY2016, which better reflects recycling performance.
PROGRESS IN REDUCING SINGLE-USE PLASTICS
The Star Entertainment Group continued to replace single-use plastics with compostable and more sustainable
alternatives over the 2020 financial year in line with our Single-use Plastic Reduction Strategy and public commitment.
During FY2020, 41 non-sustainable items were replaced with 33 sustainable alternatives and ordering systems
were updated to ensure that only sustainable alternatives were available. To support the business transition
to new compostable products, a Sustainable Product Replacement Guide was developed to assist our food and
beverage team, events team and suppliers with the switch.
Despite heavily impacted trading from March 2020 due to COVID-19, there was a 12% uplift in compostable
takeaway container purchases and a 4% increase in compostable cup purchases across the business as a result of
removing single-use plastic items from ordering systems.
Where sustainable product alternatives are not currently available, the Group continues to actively work with
suppliers to customise and create alternatives for our guests and the wider market. Testing of new projects to market
for durability and functionality led to the introduction of compostable sugarcane plastic bowls, takeaway containers,
and sushi containers and lids.
The Star Entertainment Group continues to be active in
local government programs and partnerships to support
and deliver sustainability outcomes within the business
and across the industry.
The Group is a founding partner of the City of Sydney’s
Sustainable Destination Partnership, a collaboration of
accommodation, entertainment and tourism organisations
working together to achieve a more sustainable Sydney.
The Group’s representatives chair the Leadership Panel and
co-chair the project orientated Technical Working Groups.
The Group is also a long-term member of City of Sydney’s
CitySwitch program.
The Group’s sustainability team partnered with national
waste contract provider Veolia to engage team members
across all properties for National Recycling Week in
November 2019 and subsequently trained 480 team
members on recycling best practice.
Across the Group, the Sustainability Advisory Board and
the Executive Sponsor, the Chief Legal and Risk Officer,
oversee sustainability governance, performance and strategy
and report on the progress to the Board’s People, Culture
and Social Responsibility Committee. Property Sustainability
Committees continue to engage team members at the
property level to support sustainability education and direct
operational outcomes.
SUSTAINABLE SUPPLY CHAIN
The Star Entertainment Group continues to take a long-term
view to managing and maintaining relationships with suppliers
and contractors, which enables the company to proactively
identify and implement improvements in the sustainability of
sourcing and property management activities.
In FY2020, the Group extended this commitment by
commencing its response to the Modern Slavery Act 2018.
In FY2021, the Group will undertake an extensive review into
five key strategic suppliers and collaboratively work with them
to build enhanced visibility of our extended supply chain.
This process will then be refined and progressively rolled
out based on risk and criticality of suppliers to complement
ongoing risk assessment and assurance activities.
In the first three quarters of the 2020 financial year, the
Group continued to risk assess its suppliers, with a focus
on critical and high-risk suppliers. Due to the COVID-19
pandemic, the Group’s existing goal of 60% of Tier 1 suppliers
was deferred to calendar year 2021, whilst 100% of new
suppliers were assessed on environmental, social, and
governance risks prior to being onboarded.
Following the closure of its properties on 23 March 2020 in
line with government COVID-19 directions, all non-essential
services and associated contracts were placed on hold across
the Group’s food and beverage, hotel and gaming operations
to reduce waste, with all commitments entered into prior to
closure being honoured. As we were progressively able to
reopen certain areas of the business, we commenced the
resumption of supplier engagement to the fullest extent that
our limited operations allowed.
SOVEREIGN OPENING - 100% OF OLD UNIFORMS
TO BE RECYCLED
In conjunction with The Star Sydney’s Sovereign
redevelopment, new uniforms were issued to all team
members working in gaming, food and beverage,
security and premium services.
Consistent with the Group’s commitment to reducing
waste and increasing recycling rates, 100% of the old,
worn uniforms were either repurposed or scheduled for
recycling – over 10,300 pieces in total.
Whilst the domestic textile recycling market is immature
compared to overseas markets, The Star Sydney
identified a number of avenues to ensure all of the old
garments avoided landfill.
St Vincent de Paul collected over
6,000 pieces of uniform for reuse in
both domestic and international markets.
Over 4,000 worn gaming vests will be
processed by Australian textile recovery
technology firm BlockTexx back to their raw
materials of ethylene polyester and cotton
cellulose for reuse as new products, including
textiles, packaging and building products.
A further 300 items, including suit pants,
jackets and buttoned shirts were donated
to ‘Dress for Success’, a local charity that
provides a dressing and support service for
women to seeking employment.
FOOD DONATIONS
Following state and federal government directives to
close all non-essential businesses on 23 March 2020,
all restaurants and food outlets across the Group’s
properties were impacted.
Team members from across the business quickly
mobilised to help donate fresh food and produce
(which were at risk of perishing) to our community
partners and food rescue organisations.
Working with OzHarvest and Foodbank Queensland,
The Star Sydney, The Star Gold Coast and Treasury
Brisbane helped feed the most vulnerable members in
the community, and saved over 33 tonnes of food
going to landfill - the equivalent of 100,900 meals.
The Star Sydney and The Star Gold Coast continued to
provide monthly donations of 800 kilograms on average,
of fresh fruit and vegetables towards OzHarvest’s healthy
school’s program.
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 30
SUSTAINABILITY
LEADING COMPANY
The Star Entertainment Group provides a variety of engaging entertainment experiences at its properties.
RESPONSIBLE 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.
Key operational elements of our responsible gambling program are:
We provide guests with readily accessible
information about problem gambling, including
symptoms and treatment options
We monitor the amount of time a guest spends on
property and encourage regular breaks in play
A comprehensive training program including
mandatory responsible gambling training for all
our team members
We work with external support agencies to provide
assistance to problem gamblers
We offer sensitive and confidential support
to guests seeking to exclude themselves from
attending one or more of our casinos (we have in
place agreements with selected Gambling Help
Services in Queensland and New South Wales to
allow individuals to self-exclude from a casino
without having to attend the casino in person)
We assist guests who have self-excluded from
our casinos to also self-exclude from other
gambling venues
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 prevent intoxicated guests from participating
in gambling activities
We prohibit the cashing of cheques to
fund gambling activities (other than by
prior arrangement)
We do not allow betting on credit terms
We conduct advertising and marketing campaigns
in compliance with applicable regulations and
industry codes of practice
Our security and surveillance staff are trained to
prevent minors and excluded persons from gaining
access to gaming areas.
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.
SUSTAINABILITY
PAGE 31
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.
$100 million+ contributed to Queensland’s
Gambling Community Benefit Fund since 1987
$14.6 million contributed to the Responsible
Gambling Fund (NSW) in FY2020
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 recently created position
reports directly to the General Manager Social Responsibility.
In Queensland, a Patron Liaison Manager attends
Responsible Gambling Network meetings on the Sunshine
Coast, the Gold Coast and in Brisbane.
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 find 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 2020 financial year, the Group contributed $14.6 million
to the Responsible Gambling Fund (NSW). The reduced FY2020
contribution was a direct result of COVID-19 restrictions
placed on The Star Sydney from 23 March 2020. 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.
We engage BetCare, a dedicated independent counselling
service, to provide assistance for distressed guests, including
24/7 crisis intervention. BetCare also assists with gambling
assessments for guests seeking revocation of self-exclusion
agreements and provides specialised responsible gambling
training to our Patron Liaison Managers. BetCare is available
at all of our casino properties.
In the 2020 financial year we completed the development
of Guest Support Centres at each casino property. These
centres are readily accessible away from the main gaming
area, to offer guests safe and discrete access to specialist
gambling support and counselling services.
The Star Sydney has begun an operational trial of facial
recognition technology to assist in preventing excluded
guests from entering our Sydney property. Such technology
has improved substantially in recent years and is now
generally effective in casino environments. We are assessing
the operational impact and demands before considering the
group-wide adoption of this technology.
Preventing minors from entering alcohol restricted or gaming
areas is a significant focus of the Group's harm reduction
programs and is a significant duty of our security and
surveillance teams. Team members are trained extensively
in respect of identifying minors and security team members
have substantial business processes designed to reduce the
risk of minors accessing restricted areas.
ANNUAL REPORT 2020ANNUAL REPORT 2020
PAGE 32
SUSTAINABILITY
SUSTAINABILITY
PAGE 33
WORK HEALTH AND SAFETY
GUEST WELLBEING
Promoting guest wellbeing by providing a safe and enjoyable environment across our properties is of
paramount importance to The Star Entertainment Group.
Collectively, The Star Entertainment Group’s properties
welcome around 20 million guests each year, however
visitation was around 14 million in FY2020, impacted by
COVID-19. The Group’s properties continued to deliver a
range of world-class food and beverage, accommodation,
theatre and entertainment options for local, domestic and
international tourists.
The Group is committed to providing all guests with a safe,
secure and comfortable experience at each of our properties.
Our properties are subject to a high level of oversight from
various external regulators. The Group works with police,
casino regulators and the local community in each city so
our properties remain safe for all of our guests.
We take a zero-tolerance approach to illegal, undesirable
and anti-social behaviour in conjunction with our
Responsible Gambling and Responsible Service of Alcohol
(RSA) practices.
SECURITY AND SURVEILLANCE
The Star Entertainment Group’s properties maintain leading
security and surveillance operations. All properties are
supported by 24 hours-a-day seven-days-a-week security
and surveillance operations.
Across the Group’s three properties, our security and
surveillance team comprises over 400 team members. Each
property has in place standard operating procedures to deal
with and respond to any suspected undesirable conduct.
An incidents register is maintained at each property and
the internal compliance team reviews all requirements and
conducts regular audits to support compliance with relevant
legislation and policies.
NEIGHBOURHOOD ENGAGEMENT
The Star Sydney maintains a ‘Neighbourhood Advisory Panel’
that engages the local community and advises of the property’s
ongoing operations and provides opportunity to suggest
solutions to address concerns and neighbourhood issues.
In addition, The Star Sydney distributes a community
newsletter to around 5,000 residents and businesses in
the Pyrmont area, providing updates of its plans.
In Queensland, online development updates are provided
for residents and stakeholders.
In March 2020, The Star Entertainment Group, alongside its
Hong Kong-based partners, Chow Tai Fook Enterprises and
Far East Consortium opened the Queen’s Wharf Brisbane
Visitor Centre to the public. The Visitor Centre's major
attraction is an interactive, locally-made 3D model of the
$3.6 billion development including surrounding CBD and
South Bank areas.
Other features include: a display dedicated to showcasing
the precinct’s 190+ year European heritage with photos
and artefacts; a media room to watch videos including
time-lapse camera footage of the construction to date;
a project timeline; and a photo booth where guests can
picture themselves in the future precinct.
Our goals include eliminating work related injuries,illnesses and unsafe work practices and
promoting the health and welfare of our team members. In FY2020 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
Operating safely has always been paramount at The Star
Entertainment Group’s properties, however COVID-19 has
necessitated an even greater focus on caring, engagement
and compliance.
In the 2020 financial year, we continued to pursue our
goal of minimising work related injuries and illnesses, and
eliminating unsafe work practices. We also continued
to promote the physical and psychological health and
welfare of our team members. Further development of our
safety management system and extensive engagement
and consultation with our team members has made us
even more reliable, consistent and efficient, and most
importantly it has continued to set the foundations for our
culture of care and continuous improvement.
We have reduced our injuries resulting in time off work
by 16% from 2019. Improved safe work practices, focus on
risk mitigation, safety in the design phase of construction,
timely reporting, comprehensive injury management,
leader accountability and personal responsibility have all
played a part.
Our increased focus on the mental health and wellbeing of
our team members has continued with mental health training
developed for all managers and leaders. In partnership with
our employee assistance provider, bespoke interactive
sessions have been presented to team members, with a
focus on self-care as well as learning how to identify and
support team members who are experiencing difficult times.
Detailed guidance is provided for how to manage emergency
situations and for when it is appropriate to assist with
referrals for medical or psychological intervention. With
increased promotion of our Employee Assistance Program,
including face-to-face wellness and coaching sessions and
comprehensive online resources, coupled with the challenges
created by COVID-19, we have seen an increase in the
uptake of these services.
Significant construction activity has continued throughout
the year and we have worked closely with contractors
to identify, assess and manage risk when planning and
executing our building projects to ensure a safe environment
for all those who work at, stay at and visit our properties.
TOTAL RECORDABLE INJURY
FREQUENCY RATE (TRIFR)
FY2016 – 24.4
FY2017 – 23.2
FY2018 – 14.8
FY2019 – 14.7
FY2020 – 14.5
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 34
SUSTAINABILITY
SUSTAINABILITY
PAGE 35
TRUSTED COMMUNITY PARTNERS
The Star Entertainment Group aims to foster and maintain
close connections with the local communities and cities in
which we operate.
Through annual collection, giving and donation programs,
we endeavour to support community groups, charitable
organisations and events that are important to, and
reflect the values of, our team members, our communities
and our cities.
We provide support in a variety of ways including corporate
philanthropy, team members volunteering and sharing their
expertise as well as in-kind use of our world-class venues,
facilities and provision of food and beverage for charity events.
In the last financial year, we contributed over $7 million in
donations, community grants and sponsorships.
Although we were forced to temporarily close our doors on
23 March 2020 due to COVID-19 restrictions, we were able
to assist local community and business groups impacted by
the pandemic with over $121,000 in donations. This included
Innari Inc., Currumbin Wildlife Hospital, Pyrmont Ultimo
Chamber of Commerce and Volunteering Queensland.
In FY2020, we also undertook an extensive evaluation of our
charitable and community donation programs across each
property. The aim of this evaluation was to ensure that our
commitments maximise the benefit and positive impact for
all stakeholders, aligns to each property’s values and reflects
its local spirit.
As we emerge from the impacts of COVID-19, we look
forward to announcing strategic charitable partners for
FY2021 and beyond.
During The Star Gold Coast Magic Millions Carnival in
January 2020, we also worked with our partners and
organisers to raise additional funds for the national bushfire
relief appeal throughout the 12-day carnival. The Star Gold
Coast kickstarted the drive with a $50,000 donation, while
the appeal raised more than $1.1 million in total.
Although various events were impacted by COVID-19, we
continued to be involved in partnerships that drive tourism
and economic prosperity to the region. These include
positioning The Star Gold Coast as Naming Rights Partner of
Gold Coast Magic Millions Carnival and Race-day, and host
and event partner of the TV Week Logie Awards.
THE STAR GOLD COAST
In the 2020 financial year, The Star Gold Coast maintained
several long-term relationships with key charity partners
in Queensland, including Surf Life Saving Queensland
(SLSQ), Cancer Council Queensland, Gold Coast Hospital
Foundation and Currumbin Wildlife Hospital.
We also worked closely with a variety of charitable groups
and community partners to help raise further funds to assist
those most in need in the local community, across our region
and in Queensland.
As part of an annual collection and giving program with
our selected community partners and other fundraising
initiatives, The Star Gold Coast donated nearly $200,000.
To mark The Star Gold Coast’s 25-year partnership
with SLSQ, we served a craft beer made by SLSQ and
Newstead Brewing Co., Nineteen 09, on tap at two of our
venues – Harvest Buffet and M&G Café and Bar. A portion
of proceeds from the sale was allocated to supporting
volunteer surf lifesavers.
Supporting national and state bushfire fundraising efforts,
The Star Gold Coast raised $50,000 by diverting its 2020
New Year’s Eve fireworks budget and donating all profits
from drinks sold on the night at Garden Kitchen and Bar to
the ‘GIVIT’ bushfire relief appeal.
TREASURY BRISBANE
Treasury Brisbane supported a variety of community focused
and charitable organisations that reflect our values of ‘Local
Spirit’ and ‘City Pride’.
In September 2019, Treasury Brisbane partnered with Brisbane
Festival to bring to life one of the country’s largest international
arts and cultural events for the sixth year in a row.
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.
In the 2020 financial year, our team members continued
their support of, and volunteered at Ronald McDonald
House South East Queensland (RMHSEQ) through the
‘Make-A-Meal’ program and the Christmas toy drive. Since
The Star Entertainment Group’s partnership with RMHSEQ
commenced in 2014, over 100 chefs and 30 stewards have
volunteered their time and expertise to help feed families.
SLSQ volunteers with Jessica Mellor,
The Star Gold Coast COO and SLSQ Board President Mark Fife
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 36
SUSTAINABILITY
Lunar New Year 2020 celebrations at The Star Sydney
THE STAR SYDNEY
The Star Sydney continued to support significant events,
charitable groups and organisations that are important to
the city and the local Pyrmont community.
As part of its ongoing community donations and giving
program, The Star Sydney allocated over $148,000 to local
groups and charities across Sydney. These included:
The partnership ensures that official naming rights for
The Star Championships continues through to 2022. The Star
will also have naming rights for The Star Mile run as a part of
The Everest Carnival line-up in October 2020 and 2021.
The Star Sydney continued a variety of partnerships and
sponsorships including:
• Pyrmont Cares – a group that provides household goods,
furniture and whitegoods to those in greatest need
• NSW Rugby League
• Pyrmont Ultimo Chamber of Commerce – which supports
local businesses
• Innari Inc – a grassroots Indigenous organisation which
assists families and individuals who are homeless or at risk
of homelessness
• Lifeline Australia
• Ultimo Public School and Fun Run
• OzHarvest.
In February 2020, The Star Sydney expanded its commitment
to racing in New South Wales and The Star Entertainment
Group’s 20-year association with Australian Turf Club (ATC)
with a new three-year sponsorship deal. The agreement
secured The Star Sydney as the Official Entertainment Partner
of the ATC, as well as naming rights to Sydney Autumn Racing
Carnival’s showpiece, The Star Championships.
• Sydney Gay and Lesbian Mardi Gras
• Queer Screen (a not-for-profit arts organisation that
showcases LGBTQI screen content)
• Sydney FC
• Sydney Swans
• City of Sydney’s Lunar New Year Festival
• ARIA Awards
• AACTA Awards.
SUSTAINABILITY
TALENTED TEAMS
PAGE 37
The Star Entertainment Group is delighted to train the next generation of world-class hospitality and
tourism team members. We are committed to developing talented teams that deliver exceptional guest
experiences, and in turn, create shareholder value.
DEVELOPING FUTURE TALENT
The Star Academy centres around three pillars of
learning: The Foundation Centre, The Skills Centre and
The Leadership Centre.
The Star Academy’s objectives are to offer outstanding,
accessible development programs and learning journeys,
to facilitate professional career development within the Group
and personal growth through the following training programs:
Graduate Programs
Traineeships
Apprenticeships (The Star Culinary Institute)
Internal Career Development Pathways
Leadership Coaching and Development
The formal trainee programs, the Graduate Programs and
The Star Culinary Institute form part of the overall attraction
and retention strategy for the Group.
THE STAR CULINARY INSTITUTE
The Star Culinary Institute (SCI) operates under The Skills
Centre, nurturing and developing future talent in the
culinary sector. In the 2020 financial year, the Group
hosted 108 apprentices with a gender diversity breakdown
of 38% female and 62% male. The program’s success
was reflected in its apprentice retention and employment
rates of 86% and 83% respectively.
In 2018, a school-based apprenticeship program was
piloted at The Star Gold Coast to generate a talent pathway
into the full-time program. Working with an independent
training organisation (Icon), year 10 and 11 students who
are studying a Certificate II or Certificate III in Hospitality
or Commercial Cookery are invited to join the SCI
apprenticeship program on a part-time basis.
The school-based apprenticeship program has been so
well accepted, it has an ongoing waitlist of young talent
wishing to join the program at The Star Gold Coast. The same
apprenticeship program has now been launched in Sydney with
the support of the New South Wales Department of Education.
The program’s delivery framework continues to evolve and
lead the way in training future chefs. The apprenticeship
program has a positive external brand within the hospitality
industry, professional associations and education sector.
The attraction for apprentices is the diversity of training on
offer through the variety of outlets at the Group’s properties
which provide the apprentices with valuable experiences
working with different cuisines, production and service
offerings, whilst receiving expert mentorship from senior chefs.
One of the major highlights was the international recognition
of our apprentice, Cristopher Matkowski. Cristopher proudly
represented both The Star Entertainment Group and
Australia at the 2019 WorldSkills competition held in Kazan,
Russia. This competition is referred to as the “Olympics” for
trade and vocational skills.
The process for WorldSkills competitions commences in
Australia and SCI prepares a team of New South Wales and
Queensland apprentices to compete in the challenge under
the SCI banner. The apprentices are trained in-house and by
TAFE NSW or TAFE Queensland, with the support from the
Group’s preferred suppliers. Cristopher has now graduated
from the culinary apprenticeship program and is a Commis
Chef at Flying Fish at The Star Sydney.
Other international opportunities were created through
external competitions hosted by education partners and
professional associations. The apprentices are proud to
represent the Group internationally, whilst gaining new skills,
cultural awareness and an international experience to share
with other apprentices and chefs.
The Group continues to attract highly talented and diverse
university graduates into the expanding graduate program
across all locations. The graduates learn on-the-job,
developing their career skills by working within the operations
teams and on dedicated projects with the executive team.
To date, all successful graduates have been offered
employment opportunities with the Group upon completion
of the graduate program.
The 2020 graduate program is focussing on developing
women in leadership, with a 50/50 gender split.
ELEVATING PREMIUM GUEST SERVICE
Offering premium guest service across our world-class
properties is key to the Group delivering exceptional and
unique experiences. In preparation for the opening of the
new Sovereign for our most valued guests, a premium
service standard and guest service program was designed
to elevate our current guest service commitments and
provide relevant training.
The premium guest service program commenced delivery in
early March 2020, with 250 team members completing the
program in the first few weeks.
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 38
SUSTAINABILITY
SUSTAINABILITY
PAGE 39
SUPPORTING TEAM MEMBER WELLBEING AND
CONNECTIVITY THROUGH COVID-19
The physical health, emotional, and financial wellbeing of our
team members has remained at the forefront of our focus
throughout the COVID-19 crisis.
On 23 March 2020, the Group announced the closure of all
its property operations in Sydney, Gold Coast and Brisbane
following a shut-down order by the Australian Government.
SOCIAL CONNECTION AND LEARNING SUPPORT
The need for our team members to be socially connected
was recognised. To support this connectivity and as a
way to promote two-way-communications with a largely
stood down workforce, we established The Star Connected
Facebook page.
More than 95% of the Group’s approximately 9,000
workforce was stood down following the initial
announcement. In reaction, the Group took immediate
steps to provide support to our team members.
The Star Connected Facebook group has welcomed over
4,600 team members who received continuous updates on
COVID-19 and had an opportunity to remain connected with
colleagues and leaders.
DIVERSITY AND INCLUSION GROUPS
Our diversity and inclusion program sits at the heart of The Star Entertainment Group’s culture, and is
represented in all areas of our team members’ experience. These include our Employee Values Proposition,
our Vision, our Values, our Service Commitment and our talent and development strategies.
Our team member-led working groups focus on four key areas of diversity: multicultural; LGBTQI; gender;
and age. In the 2020 financial year, the working groups re-evaluated the Group’s diversity targets with the
support of the Board.
To guide our actions and responses, a range of support
materials and initiatives were deployed to shape our collective
resilience. Support and initiatives deployed included:
PHYSICAL SUPPORT
• From January 2020, all team members were welcome to
bring and wear their own medical face mask.
• The Group also offered a supply of face masks for team
members (on request) and to ensure correct application
and removal of face masks, qualified nurses were available
on-site to offer instructions.
• Extra hand sanitisers were distributed across all back of
house areas including team cafes, bathrooms, team entry,
and kitchens.
HEALTH AND WELLBEING SUPPORT
• A range of practical tips including COVID-19 specific
podcasts, YouTube videos, and mental health support
links and resources to keep our people healthy, shared
regularly via email and on the Group’s dedicated
COVID-19 intranet page
• To ensure a centralised point for all information and team
member communications, a dedicated intranet page was
established
• The Star COVID-19 Hotline was established to help team
members with coronavirus related health questions manned
by specialist registered nurses available 24/7 to answer any
medical or leave questions about COVID-19.
DIRECT ACCESS TO COVID-19 SUPPORT FOR LEADERS
AND TEAM MEMBERS
Immediately following the Australian Government’s shut-down
order, a dedicated email address was established for a working
team (the MyQueries team) to receive and respond to all
non-health related queries from team members and leaders.
The MyQueries team responded to over 22,000 emails.
FINANCIAL AND EMPLOYMENT RELATED SUPPORT
In March 2020, the Group offered two weeks of paid
Pandemic Leave in addition to existing statutory leave
entitlements and other employment obligations, to assist
team members impacted by the COVID-19 pandemic.
Partnerships were established with Woolworths, the
Queensland Government and NOVA Partners, and
communications were activated via email and on
the Group’s intranet to notify team members of alternative
job opportunities and free training.
In May 2020, the Group implemented the ‘Star Offers
Support’ (SOS) initiative to provide additional financial
support for team members experiencing sudden and severe
financial hardship as a result of the COVID-19 pandemic.
This initiative assisted over 600 team members with
SOS payments totalling around $3 million, alongside the
paid pandemic leave distribution of $18 million.
Bernice Colcomb, Chef De Cuisine - The Star Culinary Institute and
Rebecca Merhi, Junior Sous Chef at Flying Fish at The Star Sydney
MULTICULTURAL DIVERSITY - Unity@The Star
GENDER DIVERSITY - WOMEN@TheStar
SPONSOR: Greg Hawkins, Chief Casino Officer (NSW)
SPONSOR: Paula Martin, Chief Legal & Risk Officer
TARGET: 20% Asian representation of leaders
(levels 1 - 3) by 2023.
AIM: To leverage and champion our cultural diversity to
become Australia’s leading integrated resort company,
creating inclusive frameworks to promote career
development for all team members and to extend
personalised excellence to our guests
TARGET: 45% female and 45% male representation of
leaders (levels 1 - 4) by 2023 (with the remaining 10%
reflecting scope for non-binary gender identities).
AIM: To promote gender equality in all aspects of
our business by championing change and advocating
opportunities for all individuals.
LGBTQI DIVERSITY - SPECTRUM
AGE DIVERSITY - Young@Heart
SPONSOR: George Hughes, Chief Marketing Officer
SPONSOR: Geoff Hogg, Chief Casino Officer (QLD)
TARGET: LGBTQI-inclusive employer as measured by
increasing our scores on the Australian Workplace Equality
Index (AWEI) by 5% year-on-year
TARGET: Providing a welcoming culture for our mature
aged Team Members as measured by our employee
engagement survey.
AIM: To foster a safe, inclusive and welcoming environment
for LGBTQI team members and guests, and to enable
everyone to be their best and true self.
AIM: To encourage everyone to be their best self at every
age and every stage, primarily through the provision of
greater career support for mature aged employees and
through a range of policies and practices that allow for
people to optimise their career.
DIVERSITY & INCLUSION RECOGNITION AND AWARDS
REFINITIV DIVERSITY & INCLUSION INDEX
The Star Entertainment Group was ranked number 2 in
Australia, and number 25 globally in the 2019 Refinitiv
Diversity and Inclusion Index.
AUSTRALIAN WORKPLACE EQUALITY INDEX
In 2020, The Star Entertainment Group was recognised as a
Bronze Employer in the Australian Workplace Equality Index.
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 40
SUSTAINABILITY
PAGE 41
EVENTS AND CELEBRATIONS
REWARD & RECOGNITION
In FY2020, The Star continued its reward and recognition
framework first established in the previous financial year.
The annual Star Awards Gala, an event to celebrate and show
appreciation of team members, was scheduled for September
2020 but has been postponed as a result of COVID-19.
The Star Awards is our premier program for rewarding
and recognising top performers - team members who
are delivering thrilling guest experiences and leaders
who are living our values and demonstrating leadership
competencies. Team members are recognised across four
key areas: Guest Excellence, Service Support, Leadership
and a Team Award.
In FY2020, formal recognition was awarded to 543 team
members (including all nominated team members and
the quarterly winners). In addition, the Group recognised
approximately 700 team members for long-term tenures of 5,
10, 20 and 30 years of service via its ‘Let’s Celebrate’ initiative.
CHANGE LEADERSHIP & ORGANISATIONAL
EFFECTIVENESS
Recent organisational changes provided an opportunity
to simplify and look at consistency across the business.
This assisted the Group's ability to adapt and respond
effectively to the COVID-19 crisis.
To assist our leaders in navigating change and new ways
of working, a series of two-hour workshops were held
across the Group’s properties to refocus and re-energise
its 200-plus leadership cohort. These workshops
highlighted the long term objectives of the organisation
and aimed to equip our leaders with the capability
and mindsets required to lead enterprise-wide cultural
transformation post change and in readiness for
completion of the Queen’s Wharf Brisbane development.
The Group’s annual ‘Walk and Talk’ event celebrates
International Women’s Day. Around 400 leaders and team
members came together across our three properties to take
action against inequality and to raise awareness against
gender bias.
The Star Sydney has been an active participant and
sponsor of the Sydney Gay and Lesbian Mardi Gras for
the past five years. At the 2020 event, 70 team members,
including senior management, from across Sydney,
Brisbane and the Gold Coast participated in the parade.
More than half of the Group’s 9,000 team members come
from culturally diverse backgrounds, and collectively are
fluent in over 70 languages and dialects.
EQUALITY AT THE STAR
• The Group is actively reducing the gender pay gap
through targeted renumeration increases which has
resulted in a year-on-year decrease of the gap for
salaried team members
• The percentage of women promoted to manager positions
increased by 23.28% to 42.9% in FY2020.
• Overall female representation has remained at just above
44% for the past three years.
• Female representation in levels 1, 2, 3 and 4 has steadily
increased in the past three years.
SHAPING OUR CULTURE
The Group’s culture is underpinned by its 'Values', ‘Strategy
on a Page’, ‘Star Quality’, and ‘Guest Excellence programs’.
A series of executive forums were held over the 2020 financial
year to further explore the mindsets, behaviours and traits
necessary to support the Group’s cultural framework.
As a result of this exploration, the following activities
were undertaken:
• Executive Leadership Cultural Assessment, including
interviews with Executive Leadership Teams (ELT) and a
cultural fitness diagnostic survey where 14 one-on-one
interviews were held with ELT and select direct reports
• ELT and select direct reports attended a 4.5 hour
Cultural Alignment session
• ELT and select direct reports attended a Future State
Cultural BluePrint planning session.
RELAUNCH OF CAREERS WEBSITE AND RECRUITMENT
CAMPAIGN
To reflect and showcase the Group’s commitment to hiring,
developing and promoting team members regardless of
age, gender, sexual orientation or cultural background, and
to support our future growth plans, The Star launched the
‘You’re Welcome’ recruitment campaign via its refreshed
careers website www.thestarcareers.com.
DIRECTORS’, REMUNERATION AND
FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2020
THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES
CONTENTS
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
REMUNERATION REPORT
FINANCIAL REPORT
Consolidated income statement
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the financial statements
A. Key income statement disclosures
B. Key balance sheet disclosures
C. Commitments, contingencies and subsequent events
D. Group structure
E. Risk management
F. Other disclosures
G. Accounting policies and corporate information
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
PLEASE NOTE: Page numbering from the original Directors’, Remuneration and Financial Report
released to ASX on 20 August 2020 are also included for reference
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ANNUAL REPORT 2020ANNUAL REPORT 2020
PAGE 42
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DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
Directors' Report
for the year ended 30 June 2020
Directors' Report
for the year ended 30 June 2020
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 2020.
1. Directors
The names and titles of the Company's Directors in office during the financial year ended 30 June 2020 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 2020 has been designed to provide shareholders with
a clear and concise overview of the Group’s 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 ASIC’s 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 long term strategic priorities for the Group, in pursuit of its vision to be Australia's leading integrated resort
company, remain unchanged:
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 volume of high-value visitation from local, domestic and international markets through continued
emphasis on loyalty and gaming strategies;
Grow the domestic and International VIP Rebate business;
Identify, retain, develop and engage a highly talented team of employees across properties and the Group; and
Improve customer experience, including providing customers with tailored product and service offerings.
The Group has continued to make good progress on all these key strategic priorities during the year, despite the
impact of COVID-19, with:
Solid domestic earnings growth pre-COVID-19, including growth from Gold Coast investments;
Comprehensive response to COVID-19 pandemic - safeguarded customers and staff, secured group funding,
reduced operating expenditure during closure and positioned the business for post-pandemic recovery;
Long term agreement to FY2041 was concluded with the NSW Government, providing regulatory certainty over
gaming taxes, casino exclusivity in relation to electronic gaming machines and other key issues;
Cessation of the process to create a second integrated resort on the Gold Coast with no requirement for additional
capital expenditure;
Joint venture growth projects are proceeding to plan, including $1.6 billion in debt funding secured for Queen’s
Wharf Brisbane on terms agreed pre-COVID-19;
Ongoing construction of first Gold Coast joint venture tower and continued presales for second tower; and
Delivery on time and on budget of the upgraded and expanded Sovereign in Sydney, opened on 3 July 2020.
Looking forward into FY2021, the focus will be on the following key priorities:
Operational priorities
Safely and effectively lift performance through the COVID-19 recovery;
Address the introduction of casino competition into the Sydney market through leveraging the newly opened
Sovereign, upgrades to the loyalty program, focused marketing and sales plans, and retention of key staff;
Continue to differentiate the value proposition of each of the properties through brand, depth and breadth of
gaming offer, loyalty, customer service, hospitality and tourism; and
Maintain operating expenses disciplines.
Balance sheet priorities
Maintain robust cash position through ongoing management of capital expenditures and suspension of the
dividend;
Constructive engagement with lenders to obtain covenant waivers that are likely to be required; and
Continue capital recycling program of non-core operating assets, including the Sydney carpark, VIP assets, and
other options.
Strategic priorities remain unchanged
Deliver on operating model by leveraging improved capabilities and retain cost management benefits; and
Progress investment strategy in Sydney, the Gold Coast masterplan, and Queen’s Wharf Brisbane in partnership
with Chow Tai Fook (CTF) and Far East Consortium (FEC).
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
The Group continued executing its growth strategy despite an unprecedented environment. Whilst acknowledging the
impacts of COVID-19 have been challenging, the fundamental earnings opportunity for the Group remains unchanged,
underpinned by valuable long-term licences in sought after destinations.
Group performance in FY2020 was significantly affected by COVID-19. Following Federal and State Government
directives requiring the closure of all non-essential businesses, the Group ceased gaming, food and beverage,
banqueting and conferencing operations at all its properties from 23 March 2020. Hotel accommodation remained
open in a significantly reduced capacity.
The Star Sydney re-opened on a highly restricted basis from 1 June 2020 in accordance with a COVID-Safe Plan
which complied with NSW Government health orders. At the re-opening, The Star Sydney was initially limited to
serving up to 500 customers at one time due to COVID-19 spatial distancing requirements. The Star Gold Coast and
Treasury Brisbane did not re-open until 3 July 2020.
The closure of the Group’s properties on 23 March 2020 followed a period of lower visitation and revenue, impacted by
border closures and travel restrictions as a response to COVID-19. Given the exogenous disruption and property
closures as a result of COVID-19, the Group’s financial performance in FY2020 may be considered over 1 July 2019 to
29 February 2020 (the Group’s performance pre-COVID-19) as well as over FY2020 (incorporating the property
closures and restricted trading).
Gross revenue, before commissions, of $1,748.9 million was down 30.4% on the prior comparable period (pcp).
For the period to February 2020, gross revenue, before commissions of $1,586.1 million was down 7.6% on the pcp,
largely due to the unusually low win rate in the International VIP Rebate business of 0.69% (1.45% in the pcp). This
was partially offset by 2.4% growth in domestic revenue, driven by broad based growth across the Queensland
properties. Normalised1 revenue increased 7.5% to $1,817.7 million, reflecting growth in International VIP Rebate
volumes, up 25.3%.
State Government imposed restrictions lead to a deterioration of revenue post February 2020, as social distancing
measures were progressively imposed, up to closure of the properties on 23 March 2020. Gross revenues post
February 2020 of $162.8m includes $31.5m related to the Sydney property re-opening in June and revenue initiatives
during closure.
For the period to February 2020, operating costs were flat on pcp, reflecting domestic and International VIP volume
growth, higher wages, performance based provisioning and International VIP debt provisioning, offset by cost out
benefits. Gaming taxes and levies were down 2.3%, in line with lower revenue. Significant expense items ($7.7 million
before tax) relate to written off costs related to the Sydney Ritz-Carlton Tower.
1 Normalised results reflect the underlying performance of the business as they remove the inherent win rate volatility of the
International VIP Rebate business. Normalised results are adjusted using an average win rate of 1.35% of actual turnover, gaming
taxes and commissions on revenue share programs. Normalised earnings exclude significant items.
1
2
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 44
PAGE 45
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
Directors' Report
for the year ended 30 June 2020
Directors' Report
for the year ended 30 June 2020
Post February 2020, operating costs were $108.9 million, which includes approximately $10 million per month during
property closures. Gaming taxes and levies were $12.5 million, reflecting the significantly reduced revenue over this
period. Significant expense items ($148.2 million before tax) relate to increased provision for VIP debts, asset
impairments and one-off COVID-19 related expenditures.
Earnings before interest, tax, depreciation, amortisation (EBITDA) (excluding significant items) of $282.0 million was
down 49.0% on pcp. Normalised EBITDA (excluding significant items) of $429.6 million was down 22.8% on pcp. For
the period to February 2020, EBITDA (excluding significant items) of $263.8 million was down 35.0% on pcp.
Normalised EBITDA (excluding significant items) of $420.7 million was up 12.1% on pcp.
Depreciation and amortisation expense of $205.0 million was down 0.4% on pcp, reflecting $9.0 million of one-off
accelerated depreciation in the pcp, partially offset by $8.1 million of depreciation on leased assets, introduced for the
first time in FY2020 following adoption of the new accounting standard AASB 16 Leases. Finance costs of $48.4
million (excluding significant items) were up 37.1%, reflecting the higher average drawn debt balances.
Net loss after tax was $94.6 million. Normalised net profit after tax, excluding significant items, was $120.8 million,
down 46.0% on the pcp. Basic and Diluted Earnings per Share were both (10.3) cents (both 21.6 cents in the pcp).
2.4. Group financial position
The Group remains committed to maintaining a balance sheet that positions it for post-COVID-19 recovery. No final
dividend was declared, and the interim dividend was deferred, allowing for settlement via a fully underwritten share
issue on 2 July 2020. In accordance with the conditions of debt covenant waivers at 30 June 2020, no further cash
dividends will be paid until the Group’s gearing, which represents the ratio of net debt to 12 month trailing statutory
EBITDA, is below 2.5 times.
Patron receivables continue to be recovered, however collection has been subdued due to closure of casinos in the
region and international travel restrictions limiting VIP patron visitation. An additional provision reflecting the increased
uncertainty of recovery has been recognised, limiting the Group’s exposure to outstanding trade receivables to $53.7
million. Trade and other payables of $324.0 million were down 5.0%, reflecting reductions to operating expenditure
during property closures, partially offset by the 2020 interim dividend declared but not yet paid.
Net debt2 was $1,382.7 million (30 June 2019: $972.6 million). The Group refinanced its bank facilities, increasing the
total facility limit to $1.2 billion, and secured a further $200.0 million short term facility, providing additional liquidity
through the COVID-19 pandemic. Operating cash flow before interest and tax was $157.6 million (30 June 2019:
$478.8 million) with an EBITDA to cash conversion ratio of 102% (30 June 2019: 92%).
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 Company’s operating segments. The activities and
drivers of the results for these operations are discussed below.
Sydney
Gross revenue was $1,169.5 million, down 25.4% on the pcp and EBITDA (excluding significant items) was $284.1
million, down 7.6% on the pcp. Normalised EBITDA was $276.9 million, down 24.6% on the pcp. The property was
subject to progressively imposed social distancing measures through March 2020, culminating in closure of the
property on 23 March 2020. While the property was re-opened on 1 June 2020, this was under restricted capacity
limits.
For the period to February 2020, gross revenue was $1,051.0 million, up 3.9% on pcp. International VIP Rebate
revenue was $225.6 million, up 17.4% on pcp due to an improved win rate of 1.22% (1.02% in the pcp). Domestic
revenue was up 0.7%, driven by non-gaming revenue. Hotel cash revenue was up 5.4% due to higher occupancy and
rates while food and beverage cash revenue, up 7.1%, benefited from a full year of trading in the new outlets.
Domestic gaming revenue was flat on a strong pcp. Normalised gross revenue in Sydney was $1,076.0 million, up
0.3% on the pcp.
For the period to February 2020, gaming taxes and levies of $247.8 million were up 2.4% on the pcp, in line with
increased revenue. Sydney’s average non-rebate tax rate was 31.3%, down from 31.5% in the pcp (top marginal tax
rate of 50.0% in both years). Operating expenditure of $423.4 million was down 1.7% on the pcp, reflecting increased
domestic volumes and higher wages offset by lower International VIP Rebate volumes.
2 Net debt is shown as interest bearing liabilities (excluding lease liabilities), less cash and cash equivalents, less net position of
derivative financial instruments.
The Sydney property is a Leadership Partner for Sydney’s Lunar Festival, a proud major sponsor and participant in the
Sydney Gay and Lesbian Mardi Gras, a Foundation Partner of the Australian Turf Club and participates in The Everest,
the world’s richest race on turf. It 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 Lifeline, Pyrmont Cares Inc and
Kookaburra Kids Foundation.
Queensland (Gold Coast and Brisbane)
Gross revenue was $579.4 million, down 38.8% on the pcp and EBITDA (excluding significant items) was ($2.1)
million, down 100.9% on the pcp. Normalised EBITDA was $152.7 million, down 19.2% on the pcp. The properties
were subject to progressively imposed social distancing measures through March 2020, culminating in closure on 23
March 2020. Both properties remained closed through 30 June 2020. The COVID-19 pandemic has had a significant
impact on the Queensland properties.
For the period to February 2020, gross revenue was $535.1 million, down 24.2% on pcp. Domestic revenue growth of
5.2% was broad based, and primarily driven by realisation of investments into the Gold Coast property. Gaming
revenue grew across both slots and table, while non-gaming benefited from an uninterrupted year of open food and
beverage outlets and greater room rates in the hotels. International VIP Rebate revenue was $14.4 million, down
93.2%. Despite turnover of $16.4 billion, up 80.3%, revenue declined due to an extraordinarily low win rate of 0.09%
(2.33% in the pcp). Normalised gross revenue in Queensland was $741.7 million, up 20.2% on the pcp.
For the period to February 2020, gaming taxes and levies were down 10.8% on the pcp, in line with decreased
revenues. Operating expenses of $295.4 million across the Queensland properties was up 2.2% 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.
The Star Gold Coast 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 contributed to various charities and not-for-profit organisations including Surf Life
Saving Queensland, Cancer Council Queensland and Currumbin Wildlife Sanctuary.
International VIP Rebate business
The results of the International VIP Rebate business are embedded in the segment performance overviews above. For
the period to February 2020, the International VIP Rebate business turnover was $34.9 billion, up 25.3% on the pcp.
The actual win rate of 0.69% was below both the win rate for the pcp of 1.45% and the theoretical rate of 1.35%.
Statutory revenue was $240.0 million, down 40.5% on the pcp, compared to normalised International VIP Rebate
business revenue of $471.6 million (up 25.3% on the pcp).
Player rebates and levies of $261.9 million were down 26.4% on pcp, reflecting the lower win rate.
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. Agreement was reached with the NSW Government on gaming taxes
applicable to the property until the end of FY2041. Effective from FY2022, the new 20-year arrangement will comprise
flat rates of gaming tax as a percentage of revenue. Further, agreement was reached on key issues which provide
regulatory certainty, including an agreement to preserve The Star Sydney as the exclusive casino provider of electronic
gaming machines in the two casino Sydney market.
Capital expenditure in the year was approximately $200 million. On 3 July 2020, the upgraded and expanded
Sovereign was launched with a soft opening. Initial customer response has been positive. The project was delivered on
time and on budget.
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 be approximately $370 million. Equity contributions towards the first tower are complete, with remaining
costs to be funded out of secured project level debt facilities. Other works in the $845 million capital spend program
have been completed. Presales on the second tower are progressing (execution 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 Group’s share of the proposed investment is expected to be
approximately $578 million (prior to the sale of any apartments).
3
4
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PAGE 47
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
Directors' Report
for the year ended 30 June 2020
The Queensland Government has ceased the process to create a Global Tourism Hub or second integrated resort on
the Gold Coast and has confirmed it has no intention of reviving the market process for a new integrated resort. The
Group continues to focus on delivery of its major investment projects in Queensland.
Capital expenditure, excluding equity investments into the new tower with joint venture partners CTF and FEC, in the
current year was approximately $30 million across various minor projects.
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 Queen’s Wharf Brisbane development. DBC’s 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 Group’s 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 Queen’s Wharf Brisbane development. The Group is not a party to the residential apartments development
joint venture.
Shell, core and façade work is underway, with construction progressed above ground. Works have been uninterrupted
by the COVID-19 pandemic, however appropriate contingencies are in place should an issue arise.
Target total project costs are estimated to be approximately $2.4 billion, excluding government payments and Treasury
Brisbane repurposing costs, with increased capital return expectations. Hotel fit out costs were contracted in 2H
FY2020, bringing the total project costs under lump sum terms to approximately 75%. A further 13%, related to the
next stage of hotel fit out, is expected to be contracted in 1H FY2021.
$1.6 billion project level debt facility was established in May 2020. The debt runs for a 5.5 year term, which includes
approximately 3 years of operating performance and was negotiated prior to COVID-19 market disruptions. The Group
has approximately $100 million in remaining equity contributions, after which the remaining construction costs will be
funded via the new debt facility.
Directors' Report
for the year ended 30 June 2020
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 Company’s Corporate
Governance Statement describes the Group’s risk management framework which is based on ISO31000, the
international standard on risk management. The Corporate Governance Statement can be viewed on the Company’s
website.
The COVID-19 pandemic has resulted in additional risk focus areas for the Group being identified and monitored
during Q3 and Q4 of FY2020 and through the phased re-opening of the resort facilities. The Group has established a
Working Committee to provide oversight during the re-opening process and will undertake regular scenario-based risk
assessments to inform prompt decision making. In addition, the Group has developed specific COVID-19 situation
related key performance indicators that will be monitored and reviewed by the Risk and Compliance Committee in
FY2021 to support effective risk management in a more fluid environment.
Details of the Group’s 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 Group’s 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
satisfy
without
interests
the Group’s operations or
compromising
achievement of
strategic
objectives.
the Group’s
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.
5
The Group’s vision is to be Australia’s 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 Group’s 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.
6
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 48
PAGE 49
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
Directors' Report
for the year ended 30 June 2020
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 Group’s 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 Group’s 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 including with respect to COVID-19. 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. In January 2020, the Group released ‘Beyond 2020, The Star’s Sustainability
Action Plan’ to support the delivery of the Sustainability Strategy pillars. The Star’s Beyond 2020 Sustainability Action
Plan highlights the Group’s achievements to date, material issues, priorities, commitments and future goals.
Directors' Report
for the year ended 30 June 2020
As part of the Group’s 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. Within the year,
the Group expanded its commitment to a low carbon future by setting a target to achieve net-zero carbon emissions for
its wholly owned and operated assets by 2030 as a long term measure.
The pathway to achieve this target includes the purchasing of renewable energy and the assessment of onsite solar,
continuing the company’s energy efficiency program and developing a carbon offsetting strategy.
The Group remains committed to immediate action through its interim targets to achieve a 30% reduction in carbon
and water intensity by FY2023 against the base year FY2013.
An 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 Group’s 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 Green Star Performance and NABERS Ratings, enabling
the benchmarking of operational performance of The Star's assets. The Company’s 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 fourth year running.
The Group's Global Reporting Index (GRI) report is published on the Company's website, demonstrating a ‘core’ 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 Company’s Environmental
Management Policy, Sustainability Strategy and Action Plan, Materiality Assessment and Sustainable Design and
Operational Standards can be found on the Company’s 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 (10.3) cents (2019: 21.6 cents), 147.7% down on the pcp
predominately due to the impact of the COVID-19 pandemic. 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 declared on 19 February 2020 and payable on 1 April
2020. However, due to the impact of COVID-19, payment of the interim dividend was deferred and paid on 2 July
2020.
In order to maintain a balance sheet that positions the Group for a post COVID-19 recovery, no final dividend was
declared.
In accordance with agreed terms associated with the waiver of covenants at 30 June 2020 from debt providers, no
further cash dividends will be paid until gearing, which represents the ratio of net debt to 12 month trailing statutory
EBITDA, is below 2.5 times. Further detail can be found in the ASX Announcement - Deferral of 1H FY2020 Dividend
and Changes to Dividend Policy (dated 31 March 2020).
5. Significant events after the end of the financial year
On 2 July 2020, the Group issued 30,730,998 new shares to settle the interim dividend (refer to note A6). Existing
shareholders who elected to participate in the Dividend Reinvestment Plan (DRP) received 6,849,977 new shares. In
accordance with the underwriting agreement, Credit Suisse Equities (Australia) Limited received 23,881,021 new
shares in exchange for $75.1 million cash to fund the dividend cash payment.
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 2020 and up to the date of this report that have
materially affected or may materially affect the Group’s operations, the results of those operations or the Group’s state
of affairs.
7
8
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 50
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DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
Directors' Report
for the year ended 30 June 2020
Directors' Report
for the year ended 30 June 2020
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
Gerard Bradley
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 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. He
is also a member of the 2032 Brisbane Olympic Bid Advisory Board to the Premier of
Queensland.
Special Responsibilities:
Mr O’Neill 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
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
Government’s Fintech Advisory Group. Mr Heap is also a Non-Executive Director of
Redbubble Limited and Chair of its People and Nomination Committee.
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:
• Redbubble Limited (20 April 2020 to present)
9
10
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DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
Directors' Report
for the year ended 30 June 2020
Directors' Report
for the year ended 30 June 2020
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 a Director of Carnival Corporation & plc, and is a member of the
National Indigenous Culinary Institute Advisory Board.
Ms Lahey was previously the Chair of Carnival Australia and the Chairman Australasia of
Korn Ferry International. In addition, Ms Lahey was 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 with over 20 years’ experience as a Non-Executive
Director and board member across a wide range of industries in the private and public
sectors. She has extensive experience in the gaming industry.
Dr Pitkin is a former lawyer and senior corporate partner with a national law firm.
Dr Pitkin is currently the Chair of Super Retail Group Limited and a Non-Executive Director
of Link Administration Holdings Limited.
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)
• IPH Limited (23 September 2014 to 20 November 2017)
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 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 Honorary
Treasurer 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 a Non-Executive Director of Coles Group Limited and a member
of the Council of the University of Wollongong. He is also the Chief Executive Officer &
Managing Director of Boral 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:
• Adbri Limited/Adelaide Brighton Limited (22 March 2017 to 15 June 2020)
• Coles Group Limited (19 November 2018 to present)
11
12
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 54
PAGE 55
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2020
Directors' Report
for the year ended 30 June 2020
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
Current
John O'Neill AO
Matt Bekier
Gerard Bradley
Ben Heap
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Zlatko Todorcevski
Ordinary Shares
Performance Rights
133,800
1,008,905
75,000
40,000
46,907
45,900
200,000
155,000
Nil
2,535,329
Nil
Nil
Nil
Nil
Nil
Nil
8. Company Secretary
Paula Martin holds the position of Chief Legal & Risk Officer and Company Secretary. She holds a Bachelor of
Business (Int. Bus.), a Bachelor of Laws and a Graduate Diploma in Applied Corporate Governance.
Paula has over 14 years' experience in the gaming industry, first with Tabcorp Holdings Limited 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.
Paula has a broad commercial law and regulatory background, having first practised with King & Wood Mallesons in
the telecommunications, information technology and competition law areas. She 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 2020, the Company held 14 meetings of the Board of Directors (including 6
unscheduled meetings which were attended by all Directors). The numbers of Board and Committee meetings
attended by each of the Directors during the year are set out in the table below.
Investment &
Capital
Expenditure
Review
Committee
A B A B A B A B A B A B
People, Culture
& Social
Responsibility
Committee
Risk and
Compliance
Committee
Remuner-
ation
Committee
Audit
Committee
Board of
Directors
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
14
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
5
-
2
5
5
5
1
3
5
-
-
5
5
5
-
-
3
-
1
3
3
3
-
2
3
-
-
3
3
3
-
-
1
-
1
1
1
1
1
1
1
-
1
-
-
-
1
1
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
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 Company’s website.
Directors' Report
for the year ended 30 June 2020
10.
Indemnification and insurance of Directors and Officers
The Directors and Officers of the Company are indemnified against liabilities pursuant to agreements with the
Company. The Company has entered into insurance contracts with third party insurance providers, in accordance with
normal commercial practices. Under the terms of the insurance contracts, the nature of the liabilities insured against
and the amount of premiums paid are confidential.
11.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young during or since the end of the financial year.
12. Non-audit services
Ernst & Young, the external auditor to the Company and the Group, provided non-audit services to the Company
during the financial year ended 30 June 2020. 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 auditor’s performance
on an annual basis.
Limited authority is delegated to the Company's 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 Company’s 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
Fees
for other assurance and agreed-upon-procedures services (including sustainability
assurance) under contractual arrangements where there is discretion as to whether the service is
provided by the auditor
Fees for other advisory and compliance services
Total of all non-audit and other services
$000
90.0
224.4
314.4
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
Commission’s ASIC Corporations (Rounding in Financial/Directors’ Reports) 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.
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 2020. The auditor's independence
declaration forms part of this Directors’ Report.
This report has been signed in accordance with a resolution of Directors.
John O'Neill AO
Chairman
Sydney
20 August 2020
13
14
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 56
PAGE 57
AUDITOR'S INDEPENDENCE DECLARATION
REMUNERATION REPORT (AUDITED) FOR THE YEAR ENDED 30 JUNE 2020
=jfkl Qgmf_
*((?]gj_]Klj]]l
Kq\f]qFKO*(((9mkljYdaY
?HG:gp*.,.Kq\f]qFKO*(()
L]d2#.)*1*,0----
>Yp2#.)*1*,0-1-1
]q&[ge'Ym
9m\algjÌkAf\]h]f\]f[]<][dYjYlagflgl`] 5 years
$m
< 1 year
$m
1 - 5 years
$m
> 5 years
$m
64.1
2.0
99.5
165.6
318.7
21.8
10.7
128.9
480.1
-
-
-
-
-
872.2
37.8
69.6
979.6
-
-
-
-
-
75.0
90.2
464.5
629.7
104.3
10.0
235.5
349.8
338.3
201.6
9.2
33.5
582.6
-
-
-
-
-
335.4
43.7
191.1
570.2
-
-
-
-
-
-
90.2
490.4
580.6
Net outflow
(314.5)
(979.6)
(629.7)
(232.8)
(570.2)
(580.6)
67
68
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 110
PAGE 111
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
(ii) Derivative financial instruments
2020
2019
< 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
Financial liabilities
Interest rate swaps - pay AUD fixed
Cross currency swaps - pay AUD floating
Cross currency swaps - pay AUD fixed
0.4
128.9
129.3
9.1
107.6
13.6
130.3
0.6
69.6
70.2
8.2
26.2
54.2
88.6
-
464.5
464.5
-
219.1
253.2
472.3
Net (outflow)/inflow
(1.0)
(18.4)
(7.8)
2.4
33.5
35.9
8.4
13.1
13.6
35.1
0.8
5.3
191.1
196.4
13.9
137.5
54.2
205.6
-
490.4
490.4
-
231.5
266.8
498.3
(9.2)
(7.9)
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:
2020
AUD
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
USD
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
2019
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
(3.4)
3.4
-
-
(1.6)
1.6
-
-
12.4
(12.5)
(10.4)
10.9
12.9
(13.3)
(11.2)
11.7
69
Notes to the financial statements
For the year ended 30 June 2020
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)
2020
$m
-
-
2020
$m
10.2
(14.0)
2019
$m
-
-
2019
$m
16.4
(17.0)
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.
70
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 112
PAGE 113
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
Notes to the financial statements
For the year ended 30 June 2020
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:
2020
$m
2019
$m
Less than one year
One to five years
More than five years
Notional Principal
98.0
200.0
-
298.0
-
198.0
-
198.0
Fixed interest rate range p.a.
1.0% - 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.
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 $22.0 million
(2019: $17.9 million) has been recognised in finance costs and offsetting gain on the USPP borrowings. The
ineffectiveness recognised in FY2020 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
2020
2019
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) Reconciliation of movement in financing activities
2020
Interest bearing
lease liabilities) (refer to note B7)
liabilities (excluding
Net derivative assets (refer to note B3)
2019
Interest bearing liabilities (refer to note
B7)
Net derivative assets (refer to note B3)
Opening
$m
Cash
flows
$m
Changes
in fair
values
Foreign
exchange
movement
Option
premium
Borrowing
costs
Closing
$m
$m
$m
$m
$m
(1,162.3)
(382.0)
75.4
-
(22.0)
43.6
(10.7)
-
(820.0)
(296.0)
31.7
-
(17.9)
43.7
Opening
Transition
Interest
(32.7)
-
Cash
flows
5.5
-
5.3
-
3.7 (1,567.8)
119.0
-
(1.0)
(1,162.3)
-
75.4
Additions
Other
costs
Closing
$m
$m
$m
$m
$m
$m
$m
2020
Lease liabilities (refer to note B7)
-
(58.4)
(4.0)
9.4
(4.1)
(0.1)
(57.2)
71
72
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 114
PAGE 115
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
F Other disclosures
F1 Other comprehensive income
Net gain/(loss) on derivatives
Tax on above items recognised in other comprehensive income
F2 Income tax
(i)
Income tax benefit
The major components of income tax benefit/(expense) is:
Current tax benefit/(expense)
Adjustments in respect of current income tax of previous years
Deferred income tax benefit/(expense)
Income tax benefit/(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 (expense)/benefit reported in equity
Income tax (expense)/benefit reported in equity
Income tax expense
A reconciliation between income tax benefit/(expense) and the
product of accounting profit before income tax multiplied by the
income tax rate is as follows:
Accounting (loss)/profit before income tax benefit/(expense)
At the Group's statutory income tax rate of 30%
- Non assessable gain on sale
- Recognition of temporary differences
- Research & Development tax offset
- Over provision in prior years
- Other items
Aggregate income tax benefit/(expense)
Effective income tax rate
2020
$m
13.2
(4.0)
9.2
2020
$m
8.1
(1.8)
28.5
34.8
1.3
(4.0)
(2.7)
(129.4)
38.8
-
2.0
-
(1.8)
(4.2)
34.8
%26.9
2019
$m
(7.7)
2.3
(5.4)
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)
%28.9
73
Notes to the financial statements
For the year ended 30 June 2020
(ii) Deferred tax balances
The balance comprises temporary differences attributable to:
2020
Employee provisions
Other provisions and accruals
Impairment of trade receivables
Unrealised financial liabilities
Other
Tax losses
Deferred tax assets set off
Intangible assets
Property, plant and equipment
Unrealised financial assets
Other
Balance
1 July 2019
$m
Recognised
in the
income
statement
$m
Recognised
directly in
equity
$m
Balance
30 June 2020
$m
Other
$m
20.9
21.5
3.4
39.4
2.3
-
87.5
(68.2)
(131.3)
(27.0)
(31.7)
(258.2)
0.9
(3.6)
27.8
(1.0)
4.9
-
29.0
(17.3)
21.8
-
(5.0)
(0.5)
-
-
-
8.9
-
-
8.9
-
-
(12.9)
-
(12.9)
-
-
-
-
-
7.8
7.8
-
-
-
-
-
21.8
17.9
31.2
47.3
7.2
7.8
133.2
(85.5)
(109.5)
(39.9)
(36.7)
(271.6)
Net deferred tax (liabilities)/assets
(170.7)
28.5
(4.0)
7.8
(138.4)
Balance
1 July 2018
$m
Recognised
in the
income
statement
$m
Recognised
directly in
equity
$m
Balance
30 June 2019
$m
Other
$m
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
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
Net deferred tax (liabilities)/assets
(172.8)
(0.1)
2.2
-
-
-
-
-
-
-
-
-
-
-
-
20.9
21.6
3.4
39.4
2.2
87.5
(68.2)
(131.3)
(27.0)
(31.7)
(258.2)
(170.7)
74
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 116
PAGE 117
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
(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)/receivable balance is attributable to:
2020
Tax consolidated group - year ended
30 June 2020 a
Tax consolidated group - year ended
30 June 2019 b
Prior years
Total Australia
Overseas subsidiaries
(Payable) /
receivable
1 July 2019
Decrease /
(increase) in
tax payable
Tax
instalment
paid
Over
provision of
tax
$m
-
(18.4)
6.2
(12.2)
-
(12.2)
$m
7.8
(0.8)
0.7
7.7
-
7.7
$m
-
19.5
-
19.5
0.3
19.8
$m
-
-
-
-
-
-
Receivable
30 June
2020
$m
-
0.3
6.9
7.2
0.3
7.5
Other
$m
(7.8)
-
-
(7.8)
-
(7.8)
Loss for current year recognised as deferred tax asset.
The decrease in tax payable is an amendment to the income tax return relating to the application of the tax consolidation reset
and depreciation for capital projects.
Total
a
b
2019
Tax consolidated group - year ended
30 June 2019
Tax consolidated group - year ended
30 June 2018
Prior years
Total Australia
Overseas subsidiaries
Total
(Payable) /
receivable
1 July 2018
$m
(Increase) /
decrease in
tax payable
$m
Tax
instalment
paid
$m
Over
provision of
tax
$m
-
(84.2)
(2.1)
1.8
(0.3)
-
(0.3)
2.5
0.4
(81.3)
-
(81.3)
65.8
2.0
-
67.8
-
67.8
-
1.5
-
1.5
-
1.5
Other
$m
-
0.1
-
0.1
-
0.1
(Payable) /
receivable
30 June
2019
$m
(18.4)
4.0
2.2
(12.2)
-
(12.2)
75
Notes to the financial statements
For the year ended 30 June 2020
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)
2020
$m
(94.6)
(10.3)
(10.3)
2019
$m
198.0
21.6
21.6
2020
Number
2019
Number
Weighted average number of shares used as the denominator a
914,599,793
917,322,730
Adjustment for calculation of diluted earnings per share:
Adjustment for Performance Rights
718,294
1,589,665
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
915,318,087
918,912,395
a The weighted average number of shares takes into account the weighted average effect of changes in treasury shares during the
year.
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 (2019: nil).
F5 Trade and other payables
Trade creditors and accrued expenses
Dividend payable
Interest payable
2020
$m
57.2
2.7
59.9
-
40.4
40.4
222.3
96.4
5.3
324.0
2019
$m
49.4
2.6
52.0
9.7
37.9
47.6
338.3
-
2.6
340.9
Trade and other payables of $324.0 million were down 5.0%, predominately relating to the reduction in safe
keeping and patron deposits as a result of a decrease in IRB volume and over all reduced trading levels
impacted by property closures and government restrictions on pcp, partially offset by deferral of the 2020
interim dividend to subsequent to year end, due to the exceptional circumstances associated with COVID-19
(refer to note A6).
76
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 118
PAGE 119
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
F6 Provisions
Current
Employee benefits
Workers' compensation
Other a
Non-current
Employee benefits
Other
Notes to the financial statements
For the year ended 30 June 2020
F7 Other liabilities
Current
Customer loyalty deferred revenue a
Other deferred revenue
Non current
Other
2020
$m
63.2
7.7
-
70.9
9.2
1.3
10.5
2019
$m
60.9
6.6
32.4
99.9
8.6
8.3
16.9
2020
$m
20.7
0.8
21.5
5.9
5.9
2019
$m
17.1
1.7
18.8
5.9
5.9
a Restructuring and redundancy provision relating to Group reorganisation in FY2019.
Reconciliation
Reconciliations of each class of provision, except for employee benefits and other (current), at the end of each
financial year are set out below:
Workers' compensation reconciliation
2020
Carrying amount at beginning of the year
Provisions made during the year
Provisions utilised during the year
Carrying amount at end of the year
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
Workers'
compensation
(current)
$m
Other (non-
current)
$m
6.6
4.2
(3.1)
7.7
6.9
1.4
(1.7)
6.6
8.3
-
(7.0)
1.3
5.0
3.3
-
8.3
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.
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 3,859,774 (2019: 1,458,361) of its own shares for use to settle future employee
share based payment schemes.
Opening balance 1 July
Value of treasury shares purchased
Closing balance 30 June
Opening balance 1 July
Number of treasury shares purchased
Closing balance 30 June
2020
$m
6.7
12.2
18.9
2019
$m
-
6.7
6.7
2020
Number
1,458,361
3,859,774
2019
Number
-
1,458,361
5,318,135
1,458,361
77
78
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 120
PAGE 121
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
F9 Share capital and reserves
(i) Share capital
Ordinary shares - issued and fully paid a
Purchase of treasury shares b
Issuance fees
2020
$m
2019
$m
3,063.0
3,070.2
(12.2)
-
(6.7)
(0.5)
3,050.8
3,063.0
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 The Group purchased 3,859,774 (2019: 1,458,361) of its own shares for use to settle future employee share based payment
schemes.
Movements in ordinary share capital
Balance at beginning of the year
Balance at the end of the year
2020
2019
Number of
shares
Number of
shares
917,322,730
917,322,730
917,322,730
917,322,730
On 2 July 2020, the Group issued 30,730,998 new shares to settle the interim dividend (refer to note C3).
(ii) Reserves (net of tax)
Hedging reserve a
Cost of hedging reserve b
Share based payments reserve c
2020
$m
(16.6)
3.2
16.8
3.4
2019
$m
(27.5)
4.9
7.0
(15.6)
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.
Notes to the financial statements
For the year ended 30 June 2020
(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 2020 USD/AUD spot
rate of 1.4999 (2019: 1.4261), after adjusting for cash and cash equivalents and derivative financial instruments.
The Group’s 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. The Star secured a full waiver of its
gearing and interest cover covenants for the 30 June 2020 covenant testing date from all its debt providers. 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) c
2020
$m
1,625.0
1,382.7
155.1
8.9
x
2019
$m
1,162.3
972.6
519.8
1.9
x
a Net debt is shown as interest bearing liabilities (excluding lease liabilities), less cash and cash equivalents, less net position of
derivative financial instruments.
b EBITDA is a non-IFRS disclosure and stands for earnings before interest, tax, depreciation, amortisation and impairment.
c Gearing ratio (times) has increased 7.0x. EBITDA has been negatively effected by the exceptional circumstances associated with
COVID-19, which saw the closure of the Group's properties during FY2020. Net debt was also impacted by the cashflow
reduction associated with the closure of the properties.
F10 Reconciliation of net profit after tax to net cash inflow from operations
Note
A4
F11
A5
D5
Net profit after tax
- Depreciation, amortisation and impairment
- Employee share based payments expense
- 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
- Decrease/(increase) in trade and other receivables and other assets
- Decrease/(increase) in inventories
- (Decrease)/increase in trade and other payables, accruals and
provisions
- (Decrease)/increase in tax provisions
Net cash inflow from operating activities
2020
$m
(94.6)
228.5
9.0
(0.7)
52.6
12.1
-
128.8
1.1
(142.7)
(55.9)
138.2
2019
$m
198.0
205.8
2.1
(0.9)
35.7
0.6
(9.7)
(33.9)
(2.0)
6.8
8.9
411.4
Operating cash flow before interest and tax was $157.6 million, down 67.1% on the pcp, due to the exceptional
circumstances associated with COVID-19. The EBITDA to cash conversion ratio was 102%.
79
80
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 122
PAGE 123
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
Notes to the financial statements
For the year ended 30 June 2020
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 $1.8 million (2019: $0.7 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.
2020
Grant Date
21 September 2015
5 October 2016
2 October 2017
3 October 2018
3 October 2019
2019
Grant Date
26 September 2014
21 September 2015
5 October 2016
2 October 2017
3 October 2018
Balance at start
of year
Granted during
the year
621,767
1,062,560
1,600,456
1,599,402
-
-
-
-
-
1,874,038
Forfeited
during the
year a
-
861
140,031
132,105
-
Lapsed
during the
year b
621,767
-
-
-
-
4,884,185
1,874,038
272,997
621,767
Vested
during the
year
Balance at end
of year
-
-
-
-
-
-
-
1,061,699
1,460,425
1,467,297
1,874,038
5,863,459
Balance at start of
year
Granted during
the year
921,619
665,548
1,146,415
1,734,717
-
-
-
-
-
1,599,402
Forfeited
during the
year
3,224
43,781
83,855
134,261
-
4,468,299
1,599,402
265,121
Lapsed during
the year
Vested during
the year
Balance at end
of year
-
-
-
-
-
-
918,395
-
-
-
-
-
621,767
1,062,560
1,600,456
1,599,402
918,395
4,884,185
Grants from 26 September 2014 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 The number of Performance Rights forfeited during the year is net of Performance Rights reinstated for employees who were
terminated in FY19 as part of the Group reorganisation, but subsequently deemed good leavers. The number of Performance
Rights reinstated is 48,650 from the 5 October 2016 grant, 43,678 from the 2 October 2017 grant and 27,963 from the 3 October
2018 grant.
b Performance rights granted on 21 September 2015 were tested on 21 September 2019 and did not vest. The TSR percentile rank
for the Company was 14.93%, below the 50th percentile rank. The EPS performance was 22.4 cents, below the 33.5 cents
threshold. As a result, these Performance Rights lapsed and no shares were issued to participants.
The key assumptions underlying the Performance Rights valuations are set out below:
Equity retention plan
During the current period, the Company granted restricted shares under the equity retention plan to eligible
employees. The share based payment expense of $1.3 million (2019: $1.4 million) 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.
2020
Grant Date
1 July 2019
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
1,433,959
201,410
317,750
-
-
1,317,619
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
24,402
-
-
1,433,959
The shares are purchased on-market and are granted to participants at no cost, subject to a service condition of five
years. Participants are entitled to dividends and may benefit from share price growth over the vesting period.
Short term incentive plan
Due to the exceptional circumstances associated with COVID-19, the Board resolved to exercise its discretion to make
a significantly reduced equity award under the FY2020 short term incentive plan. The award will be delivered as a
share based payment, subject to a holding lock of one year from the date of issue. A share based payment expense of
$5.9 million has been recognised in the income statement.
F12 Auditor's remuneration
Fees to Ernst & Young (Australia):
- Fees for auditing the statutory financial report of the parent and
consolidated group*
fees
-
for other assurance and agreed-upon-procedures services
(including sustainability assurance) under contractual arrangements
where there is discretion as to whether the service is provided by the
auditor
- Fees for other advisory and compliance services
Total fees to Ernst & Young Australia
2020
$
2019
$
1,029,652
1,067,766
90,000
224,419
88,860
-
1,344,071
1,156,626
*includes $31,000 for overseas entities.
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.
F13 Assets held for sale
Share price at
date of grant
Expected
volatility in
share price
Expected
dividend yield
Risk free
interest rate
Average Fair
Value per
Performance
Right
Aircraft
Vessel
Effective grant
date
Test and vesting
date
21 September 2015
21 September 2019
5 October 2016
2 October 2017
3 October 2018
5 October 2020
2 October 2021
3 October 2022
25 September 2019
25 September 2023
$
4.82
5.89
5.17
5.21
4.20
%
28.00
%
25.03
%
24.40
%
22.76
%
22.00
%
%
%2.70
%2.74
%2.98
%4.66
%-
%
%1.98
%1.68
%2.28
%2.14
%0.72
$
3.53
4.27
4.02
3.77
3.66
81
In June 2020, the Group tendered for sale an aircraft and a vessel. The sales are expected to be completed before the
end of October 2020. The assets were classified as 'held for sale' and measured at the lower of their carrying value
and fair value less costs to sell at the time of reclassification. This resulted in an impairment expense of $13.3 million
(2019: nil) (refer to note A7). The assets' fair values were determined by reference to independent market data. This is
a level 2 measurement as per the fair value hierarchy set out in note E2(i).
82
2020
$m
32.5
4.7
37.2
2019
$m
-
-
-
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 124
PAGE 125
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
Notes to the financial statements
For the year ended 30 June 2020
G Accounting policies and corporate information
Significant accounting policies are contained within the financial statement notes to which they relate and are not
detailed in this section.
Corporate Information
The Star Entertainment Group Limited (the Company) is a company incorporated and domiciled in Australia. The
Financial Report of the Company for the year ended 30 June 2020 comprises the Company and its controlled entities
(collectively referred to as the Group). The Company's registered office is Level 3, 159 William Street, Brisbane QLD
4000.
The Company is of the kind specified in Australian Securities and Investments Commission (ASIC) Instrument
2016/191. In accordance with that Instrument, amounts in the Financial Report and the Directors' Report have been
rounded to the nearest hundred thousand dollars, unless specifically stated to be otherwise. All amounts are in
Australian dollars ($). The Company is a for profit organisation.
The Financial Report was authorised for issue by the Directors on 20 August 2020.
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'.
Going concern
The financial statements have been approved by the Directors on a going concern basis. In determining the
appropriateness of the basis of preparation, the Directors have considered the impact of the COVID-19 pandemic on
the position of the Group at 30 June 2020 and its operations in future periods.
At 30 June 2020, the Group is in a net current liability position of $234.6 million (2019: net current liability of $246.6
million) and a net asset position of $3,465.0 million (2019: $3,740.9 million). For the year, the Group generated a loss
after tax of $94.6 million (2019: profit after tax of $198.0 million). The net decrease in cash and cash equivalents of
$48.2 million (2019: net increase $4.0 million) was driven by the payments for property, plant, equipment and
intangibles and investments in associate and joint venture entities.
A waiver from banks and USPP holders was obtained providing relief against restrictive loan covenants at 30 June
2020.
Current Period Impact
The COVID-19 outbreak was declared a pandemic by the World Health Organization in March 2020. The response of
governments in dealing with the pandemic is impacting the general activity levels within the community, the economy
and the operations of the Group. On 23 March 2020, following government directives, The Star’s properties in Sydney,
Gold Coast and Brisbane:
ceased gaming activities
closed food and beverage, banqueting and conferencing offerings with the limited exception of in-room dining
services for hotel guests; and
significantly reduced the capacity of its hotel accommodation services.
From June 2020, The Star’s properties commenced a staged return to operation, albeit at significantly reduced
capacity. Restrictions remain in place around the number of patrons allowed onsite as well as minimum health and
safety standards, the compliance to which require complete closure of the properties each day for 4 hours. It remains
uncertain for how long these restrictions will remain in place.
At 30 June 2020 the Group has re-assessed all significant judgements and estimates included in the 30 June 2020
financial result and position, including but not limited to, provisions against debtors, liability to future claims,
impairment of non-current assets, the fair valuation of debt and associated instruments as well as other provisions and
estimates.
Future Impact and Going Concern
COVID-19 and the resulting border closures and other restrictions imposed by governments has had a significant
impact on the current year financial results and financial position. COVID-19 has created significant uncertainty in
relation to the Group's cash flow forecasts. Furthermore, there is the potential that the Group may breach covenants
associated with its borrowing facilities at 31 December 2020, which if not amended or waived by the lenders, may lead
to those borrowings becoming due and payable. The Group would need to raise additional capital or secure new
borrowing facilities to repay existing borrowings should this eventuate. The financial report does not include any
adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and
classification of liabilities that might be necessary should the entity not continue as a going concern.
The Directors have taken the following matters into consideration in forming a view that the Group is a going concern,
amongst other matters:
The Group has cash on hand and on deposit of $66.1 million at 30 June 2020;
At 30 June 2020, the Group has $507 million available facility capacity, of which $307 million has a maturity
beyond 12 months. Drawn debt facilities due to mature within 12 months, which comprises the $98 million USPP,
can be met out of available facility capacity;
The Group expects to realise $37.2 million in asset divestments related to an aircraft and a vessel, held for sale at
30 June 2020;
The Group has approximately $102 million in planned and committed capital expenditure and $156 million in
committed investments into associates and joint ventures. The Directors have the ability to control the cash flow of
certain capital expenditure, should the need arise. The Group's $156 million in committed investments into
associates and joint ventures in FY21 fulfil the Group's remaining equity contributions towards both the Queen's
Wharf development and Tower 1 on the Gold Coast. Remaining construction costs will be funded by project
finance, which was fully committed at 30 June 2020;
Scenario modelling has been undertaken, based on events known and current expectations, to forecast Group
operating cashflows for the next 12 months. All scenarios, which assess different staged recoveries of the
domestic economy and availability of international patrons, support operations which will generate operating cash
flows to cover committed investing activities;
As announced to the market, no further cash dividends will be paid until gearing, which represents the ratio of net
debt to 12 month trailing statutory EBITDA, is below 2.5 times;
The Group is required to test covenants at 31 December 2020, at which time it is likely additional waivers will be
required from all lenders. The Group remains in contact with its lenders and is confident that as COVID-19 related
restrictions continue to ease, waivers are obtainable at 31 December 2020. Historically, the Group has
demonstrated an ability to successfully obtain waivers in previous periods, including most recently at 30 June
2020; and
The Group has the opportunity to raise additional capital either through asset disposal or issuance of new shares,
should the need arise. On 2 July 2020, 30,730,998 new shares were issued to settle the 2020 interim dividend.
This equated to approximately $96.4 million in additional capital (refer note C3).
Based on the above, the Directors are satisfied that sufficient cashflows will be generated along with the capacity to
either amend existing funding agreements or obtain new funding, such that the Group will be able to meet its liabilities,
as and when they fall due, over the next twelve months.
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:
Going concern (refer note above);
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);
Provisions (refer note F6); and
Asset held for sale (refer note F13).
83
84
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 126
PAGE 127
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
Notes to the financial statements
For the year ended 30 June 2020
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 2020:
Reference
AASB 16 (i)
AASB Interpretation 23 (ii) Uncertainty over Income Tax Treatments, and relevant amending standards
Title
Leases
(i) AASB 16 Leases
AASB 16 supersedes AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease,
Interpretation 115 Operating Leases-Incentives and Interpretation 127 Evaluating the Substance of Transactions
Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement,
presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance
sheet model.
The Group has adopted the new standard using the modified retrospective method of adoption with the date of initial
application of 1 July 2019. Under this transition method, prior period comparative financial statements are not required
to be restated. The Group also elected to use the recognition exemptions for lease contracts that, at the
commencement date, have a lease term of 12 months or less and do not contain a purchase option (short-term
leases), and lease contracts for which the underlying asset is of low value (low-value leases).
The impact of the new standard is that leases whereby the Group is lessee are required to be recognised on the
balance sheet as a right-of-use (ROU) asset and lease liability, except for short-term leases and low-value leases. On
transition, for existing leases, the lease liability is measured at the present value of future lease payments, discounted
using the incremental rate of borrowing at transition date. The Group elected to use the exemption whereby on
transition, the ROU asset is recognised at an amount consistent with the lease liability, adjusted for any existing lease
related assets or liabilities (prepaid lease payments and accrued lease incentives).
The effect of adopting AASB 16 on the balance sheet is as follows:
Balance sheet
Property, plant and equipment
Other assets
Interest bearing liabilities
Provisions
30 June 2019
$m
Adoption
adjustment
$m
1 July 2019
$m
2,779.8
99.6
(1,162.3)
(116.8)
60.3
(8.9)
(58.4)
7.0
2,840.1
90.7
(1,220.7)
(109.8)
The impact on the income statement for the year ended 30 June 2020 are as follows:
Income statement
Depreciation, amortisation and impairment
Net finance costs
Property costs *
Other expenses *
30 June 2020
AASB 117
$m
Transition
adjustment
$m
30 June 2020
AASB 16
$m
224.2
48.2
74.6
193.1
8.1
4.0
(9.7)
(1.0)
232.3
52.2
64.9
192.1
* These costs represent the operating lease expense which would have originally been recorded under AASB 117.
Lessor accounting under AASB 16 is substantially unchanged from 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. Adoption of the new standard has had no impact on the accounting for those
contracts whereby the Group is the lessor.
Leases previously accounted for as operating leases
The Group recognised right-of-use assets and lease liabilities for those leases previously classified as operating
leases, except for short-term leases and leases of low-value assets.
The lease liabilities as at 1 July 2019 can be reconciled to the operating lease commitments as at 30 June 2019:
Operating lease commitments as at 30 June 2019
Less:
Discounting of leases a
Lease liabilities as at 1 July 2019
$m
143.1
(84.7)
58.4
a The weighted average incremental borrowing rate was 11.3% as at 1 July 2019.
Summary of new accounting policies
Right-of-use assets
The Group recognises ROU at the commencement date of the lease (i.e. the date the underlying asset is available for
use). ROU assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities. The cost of ROU assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives
received. The recognised ROU assets are depreciated on a straight-line basis over the shorter of its estimated useful
life and the lease term. ROU assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of
a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease,
if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend
on an index or a rate are recognised as expense in the period on which the event or condition that triggers the
payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement
date,the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease
term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying
asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of buildings, leasehold
improvements and plant and equipment. (i.e., those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition
exemption to leases of office equipment that are considered of low value (i.e. below $10,000). Lease payments on
short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease
term.
The above policies replace the lease policy in place at 30 June 2019, which reads: 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.
85
86
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 128
PAGE 129
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
Notes to the financial statements
For the year ended 30 June 2020
(ii) AASB Interpretation 23
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the
application of AASB 112 Income Taxes. It does not apply to taxes or levies outside the scope of AASB 112, nor does it
specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The
adoption of this interpretation has no material impact on the financial results of the Group.
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 key standards, shown below, are not expected to have a material impact on the financial statements:
Reference Title
AASB 3
AASB 101 Amendments to the definition of material
AASB 7
Application date
1 January 2020
1 January 2020
1 January 2020
Interest rate benchmark reform on hedge accounting
Amendments to AASB 3 Definition of a Business
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.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received, and all
attached conditions will be complied with. When the grant relates to an expense, it is recognised net of the related
expense for which it is intended to compensate. There are no unfilled conditions or other contingencies attached to the
grants.
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.
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.
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.
87
88
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 130
PAGE 131
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
Notes to the financial statements
For the year ended 30 June 2020
Notes to the financial statements
For the year ended 30 June 2020
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.
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.
Assets held for sale
Non-current assets are classified as held for sale if their carrying amounts will be recovered principally through a sale
transaction, rather than through continuing use, and a sale is considered highly probable. They are measured at the
lower of their carrying value and fair value less costs to sell. An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its fair value less costs to sell.
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.
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.
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.
Due to the exceptional circumstances associated with COVID-19, the Board resolved to exercise its discretion to make
a significantly reduced equity award under the FY2020 STI. The award will be delivered as a share based payment,
subject to a holding lock of one year from the date of issue.
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.
89
90
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 132
PAGE 133
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS' DECLARATION
Notes to the financial statements
For the year ended 30 June 2020
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 2020 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
20 August 2020
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
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.
91
92
ANNUAL REPORT 2020ANNUAL REPORT 2020 PAGE 134
INDEPENDENT AUDITOR'S REPORT
INDEPENDENT AUDITOR'S REPORT
PAGE 135
(UQVW afYf[aYd
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
Hjg^]kkagfYdYf\=l`a[YdKlYf\Yj\k:gYj\Ìk9H=K))(Code of Ethics for Professional Accountants
(including Independence Standards) (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.
Emphasis of matter: COVID 19 Material uncertainty in relation to going concern
We draw attention to Note G of the financial report which notes the impact of the COVID 19 pandemic on
l`]afYf[aYdJ]hgjlYf\9m\algjÌkJ]hgjlL`]j]gf
The directors are responsible for the other information. The other information comprises the information
included in the GroupÌk*(20 9ffmYdJ]hgjlgl`]jl`Yfl`]^afYf[aYdj]hgjlYf\gmjYm\algjÌkj]hgjl
thereon. We obtained l`]
BNP PARIBAS NOMS PTY LTD
CITICORP NOMINEES PTY LIMITED
CS THIRD NOMINEES PTY LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ARGO INVESTMENTS LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
BELIKE NOMINEES PTY LIMITED
NETWEALTH INVESTMENTS LIMITED
NAVIGATOR AUSTRALIA LTD
BRISPOT NOMINEES PTY LTD
UBS NOMINEES PTY LTD
MUTUAL TRUST PTY LTD
PACIFIC CUSTODIANS PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – GSCO ECA
314,585,439
176,347,708
142,872,541
71,969,762
15,865,114
13,488,016
11,258,874
10,522,941
7,985,260
6,515,930
5,300,000
4,772,541
3,717,053
2,854,369
2,167,239
2,145,162
2,035,471
1,985,778
1,807,822
1,692,943
33.18%
18.60%
15.07%
7.59%
1.67%
1.42%
1.19%
1.11%
0.84%
0.69%
0.56%
0.50%
0.39%
0.30%
0.23%
0.23%
0.21%
0.21%
0.19%
0.18%
2 July 2020
47,377,137
4.9973%
*on a grouped basis
Total of top 20 registered shareholders
799,889,963
84.36%
The Vanguard Group Inc. and its controlled entities
20 December 2019
45,956,664
5.00987%
(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.
(iii) Shareholding participated in the Dividend Reinvestment Plan for the FY2020 interim dividend payment on 2 July 2020.
LESS THAN MARKETABLE PARCELS
There were 19,504 shareholders holding less than a marketable parcel of 181 ordinary shares (valued at $500 or less, based on
a market price of $2.77) at the close of trading on 14 August 2020 and they hold a total of 2,106,237 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 Tax Exempt Plan (TEP), and the Long
Term Incentive Plan (LTI).
Ordinary Shares (for GESP)
Ordinary Shares (for TEP)
Ordinary Shares (for LTI)
Number of shares
purchased
Average price paid
per share
122,475
23,601
22,532
$4.703
$4.703
$4.205
DISTRIBUTION OF SECURITIES HELD
ORDINARY SHARES
PERFORMANCE RIGHTS1
Range of Holding
No. of Holders
No. of
Securities
% of total
ordinary
shares
No. of
Holders
No. of
Securities
% of total
performance
rights
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
48,730
16,925,241
21,771
3,245
1,857
47,466,086
23,256,702
40,675,925
86
819,729,774
75,689
948,053,728
1.78%
5.01%
2.45%
4.29%
86.47%
100%
0
0
1
28
10
39
0
0
5,436
1,201,405
4,656,618
5,863,459
0%
0%
0.09%
20.49%
79.42%
100%
1Performance Rights were issued pursuant to the Long Term Incentive Plan (refer to the Remuneration Report for more information).
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 2020ANNUAL REPORT 2020 PAGE 144
PAGE 145
CORPORATE INFORMATION
COMPANY DIRECTORY
ANNUAL REPORT
REGISTERED OFFICE
QUEEN’S WHARF BRISBANE
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
General Enquiries
Telephone: 1800 104 535
Email: qwbenquiries@destinationbrisbane.com.au
www.queenswharfbrisbane.com.au
AUDITOR
Ernst & Young
www.starentertainmentgroup.com.au
ABOUT THIS 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
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
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’s securities are
quoted on the Australian Securities Exchange (ASX)
under the share code “SGR”.
SHARE REGISTRY
Link Market Services Limited
Address:
Level 12, 680 George Street
Sydney NSW 2000
Postal address: The Star Entertainment Group Limited
C/- Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
Australia
+61 1300 880 923 (toll free within Australia)
+61 2 9287 0303
starentertainment@linkmarketservices.com.au
www.linkmarketservices.com.au
Telephone:
Facsimile:
E-mail:
Website:
GENERAL ENQUIRIES
Investor information is available on The Star Entertainment Group’s website www.starentertainmentgroup.com.au,
including major announcements, Annual Reports, and general company information.
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
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.
ANNUAL REPORT 2020ANNUAL REPORT 2020
PAGE 146
2020 CORPORATE GOVERNANCE STATEMENT
The 2020 Corporate Governance Statement can be found on The Star Entertainment Group’s website
www.starentertainmentgroup.com.au/corporate-governance.
2020 ANNUAL GENERAL MEETING
The 2020 Annual General Meeting of The Star Entertainment Group Limited will be held as a virtual (online)
meeting on Thursday, 22 October 2020.
Information and guidance on how to join the Annual General Meeting will be made available with
the Notice of Meeting which will be provided electronically via The Star Entertainment Group’s
website www.starentertainmentgroup.com.au/annual-general-meetings.
INDICATIVE KEY DATES FOR FY2021*
HALF YEAR RESULTS ANNOUNCEMENT:
18 February 2021
FINANCIAL YEAR END:
30 June 2021
FULL YEAR RESULTS ANNOUNCEMENT:
19 August 2021
2021 ANNUAL GENERAL MEETING:
28 October 2021
*Dates are subject to change
ANNUAL REPORT 2020 PAGE 148
ANNUAL REPORT 2020