Star Entertainment Group announced that Steve McCann, former Crown Resorts CEO, has been appointed as the group’s new chief executive officer and managing director.
McCann is expected to take over as the CEO of Star at 8 July.
Robbie Cooke is replaced by him. Cooke left his position as CEO in March, but continued to consult Star while it sought out a successor. Neale O’Connell, interim group chief financial office and acting CEO of Star Group Inc. has taken on extra responsibilities during the interim.
McCann is an executive with 28 years of experience. He has held several positions at the highest levels during that time. His 18-month stint as Crown’s CEO and managing Director between May 2021 to September 2022 is most relevant for Star.
He spent more than 15 years at the real estate investment and development group Lendlease. It included over a decade of its CEO.
He also held senior management positions at ABN AMRO, Bankers Trust and other companies.
McCann Joins Star in “Critical” Time
McCann, in announcing his appointment to Star, acknowledged that he was joining the company at a time of “criticality” for it. McCann says he’s committed to rebuilding trust in the operator.
McCann stated, “I recognize that the company faces many challenges and complex issues.” I am dedicated to working with board members and stakeholders to drive change and restore confidence, and to achieve a lasting resolution.
Ward welcomes McCann’s arrival as well. She said the Star Board is happy to have a CEO with McCann’s caliber.
Ward stated that “his time at Crown and his previous leadership experience with Lendlease give him the credentials necessary to lead Star’s remediation program.” Ward said that his track record shows he is able to collaborate with many stakeholders, and can lead transformational changes and cultural renewal.
This experience is invaluable in our efforts to rebuild trust and accelerate the sustainable transformation at Star.
Star regains its confidence
Star has been hit by a number of issues in the last few years. McCann, as well Ward, acknowledge that Star needs to do a lot of work in order to regain the trust of its customers.
The confirmation by the New South Wales Independent Casino Commission that Star will be the subject of a second investigation is perhaps the latest significant development. Adam Bell SC will lead the investigation, as he did with the previous Bell Report.
Ward will examine how Star implemented the recommendations of the initial inquiry. In September 2022, the group’s suitability to be granted a New South Wales casino license was deemed unsuitable after an initial investigation revealed a number of social responsibility and anti-money laundering failings.
A final report on the second investigation, which was launched in February, has been sent to all parties last month. The details of the second inquiry are still pending.
Other recent regulatory news includes the Queensland authorities who announced last month a delay in a scheduled licence suspension of Star.
In December 2022, the group received a sanction from the state for a number of failures. The group was told that its license could be suspended until it proved it was fit to have a licence. Star had 12 months in which to fix its problems, with a deadline set at 1 December 2023.
Star had submitted an initial remediation plan in order to fix the problems. Last month, authorities again delayed the decision saying that they needed to wait for the results of a second Bell Inquiry.
Star’s revenue to drop by the full year
Star revealed this week that it will report a drop in revenue for the full year due to a difficult 12 months.
For the year ending 30 June, Star is forecasting that revenue will be between AU$1.68bn (PS879.6m/EUR1.04bn/US$1.11bn) and $1.69bn. This upper range is 11.1% below the $1.90bn reported in FY23.
Star mentions “challenging”, but constant, trading conditions. The company also reports higher operating expenses due to remediation, transformation and increased resources in the risk and control function.
Star also predicts a decrease in EBITDA. The range is between $165m to $180m with an upper limit of 43.2% less than last year.
Star has made a forecast for Q4, which will end this coming week. The final quarter is expected to be low as well, with revenues falling 3.3% on an annual basis and 4.3% quarterly.
Star referred to possible asset sales in terms of planning for the future. The Treasury Casino, Hotel and Car Park are among the assets that could be sold. Talks about a possible deal have already begun. Star also considers selling non-core assets. Further updates will be provided when the company posts its FY24 Results later this year.
