From A$24M Loss to A$1M: Under Bruce Mathieson Jnr, The Star Entertainment Group Shows Real Recovery Momentum
The Star Entertainment Group delivered a markedly improved EBITDA result in Q3 FY26, but the headline recovery in earnings still sits against a backdrop of declining revenue, negative operating cash flow and continued refinancing pressure.
Group revenue for the quarter came in at A$266m, down 12% quarter-on-quarter and 1% year-on-year, while EBITDA improved sharply to a A$1m loss compared with a A$24m loss in the prior corresponding period. The comparison with Q2 is less favourable, however, given the previous quarter delivered a A$6m EBITDA profit, supported by an A$11m prior-period operator fee true-up related to The Star Brisbane. Excluding that one-off benefit, underlying earnings momentum is improving, but only gradually.
Importantly, lower operating expenses also played a central role in narrowing losses. Group operating costs fell 11% quarter-on-quarter to A$206m, reflecting volume-related reductions and early cost-out measures introduced by management. That suggests margin improvement is currently being driven as much by restructuring discipline as by underlying operational recovery.
Sydney remains the core operating drag
The biggest structural issue remains The Star Sydney, which continues to absorb the commercial fallout from sweeping regulatory reform.
Sydney revenue declined 10% quarter-on-quarter to A$147m, while EBITDA remained negative at A$4m. More significantly, management disclosed that average daily revenue has fallen 20% since mandatory card play and daily cash limits were fully implemented across the gaming floor in October 2024.
That decline matters beyond a single quarter’s trading softness. It reinforces the view that Australia’s stricter regulatory environment is permanently reshaping casino economics, particularly for operators historically reliant on higher-spending VIP and cash-based gaming segments. For The Star, Sydney is no longer simply navigating cyclical weakness – it is operating through a structural reset in customer behaviour and revenue mix.
Gold Coast stabilises earnings while Brisbane strategy shifts
Against Sydney’s weakness, The Star Gold Coast remains the group’s most stable earnings contributor.
The property generated A$101m in revenue and A$8m in EBITDA during the quarter, continuing to provide much-needed operational support. While revenue softened 6% sequentially, performance remained resilient relative to wider group trading and demonstrates the importance of diversified property exposure within The Star’s portfolio.
Brisbane, meanwhile, is becoming more strategically important as a capital-light earnings platform rather than a direct asset ownership play.
Operator fee revenue from The Star Brisbane fell to A$15m from A$26m in Q2, pushing the segment to a A$4m EBITDA loss, but the broader strategic significance lies in The Star’s completed first-stage exit from the Destination Brisbane Consortium joint venture. That transaction included the release of its parent guarantee over 50% of DBC’s A$1.4bn debt facilities, materially reducing contingent balance sheet exposure while repositioning Brisbane toward a management-fee operating model.
Liquidity and refinancing remain the defining issue
Despite operational stabilisation, The Star’s capital position remains fragile.
Available operating cash declined to A$90m at 31 March from A$130m at year-end, while quarterly operating cash outflow totalled A$47m. Based on current burn rates, the company estimates it has approximately 2.7 quarters of available funding, leaving limited room for operational missteps or delays in capital execution.
That places clear focus on the group’s refinancing package with WhiteHawk Capital Partners, which must be completed by 15 May 2026 to satisfy lender waiver conditions and avoid default under its existing senior facility agreement. The current syndicated debt facility carries a steep 15% all-in borrowing cost, underlining both The Star’s elevated credit risk profile and the premium now attached to its access to liquidity.
For operators, suppliers and investors, the conclusion is straightforward: earnings are showing early signs of stabilisation, but The Star remains a restructuring story until refinancing closes and cash burn materially improves. Completion of the WhiteHawk transaction is the near-term event that will determine whether the business can shift from liquidity management toward genuine operational rebuild
Source: The Star Entertainment Group
