Star Entertainment Group has announced the appointment of Steve McCann, the former head of Crown Resorts, as its new group chief executive and managing director.
McCann will assume his new role as CEO of Star on 8 July, subject to regulatory approvals.
He replaces Robbie Cooke, who left the position in March but retained a consultancy role while Star sought a replacement. Interim group chief financial officer Neale O’Connell has been serving as acting CEO, while newly appointed chair Anne Ward took on additional responsibilities in the interim.
McCann, an experienced executive, has served in several high-level positions during his 28-year career. Most relevant to Star is his 18 months as CEO and managing director of Crown between May 2021 and September 2022.
Prior to this, he spent over 15 years working at real estate development and investment group Lendlease. This included more than a decade as its group CEO,
Earlier in his career, he also spent time in senior leadership roles at ABN AMRO and Bankers Trust.
McCann joins Star at “critical” time
Speaking about his appointment, McCann acknowledged he is joining Star at a “critical” time for the business. He adds that he is committed to restoring confidence in the operator.
“I recognise that there are many complex issues and challenges for the company to address,” McCann said. “I am committed to working with the board and the various stakeholders to help drive change, restore confidence and achieve a sustainable resolution.”
Chair Ward also welcomes the arrival of McCann. She says the Star board is pleased to have secured a CEO of McCann’s calibre.
“Given his time with Crown, and previous long-standing leadership at Lendlease, he has the right credentials to lead Star’s remediation programme,” Ward said. “His track record reflects his capability to work collaboratively with multiple stakeholders and lead meaningful transformational change and cultural renewal.
“This experience will be invaluable as we work towards rebuilding trust and expediting the sustainable transformation of Star.”
Restoring confidence in troubled Star
Star has suffered a series of blows in recent years in terms of regulatory issues. Both McCann and Ward recognise that plenty of work is required to restore customer confidence in Star.
Perhaps the most recent significant development is confirmation that Star faces a second inquiry from the New South Wales Independent Casino Commission (NICC). This will be led by Adam Bell SC, who also oversaw the first Bell report.
Ward will focus on how Star has implemented recommendations from the first inquiry. The group was declared unsuitable to hold a casino licence in New South Wales in September 2022 after the initial investigation uncovered a catalogue of anti-money laundering and social responsibility failings.
The second inquiry launched in February and a final report was sent last month. Details of this are yet to be published.
In other recent regulatory news, authorities Queensland last month announced a further delay to a planned licence suspension for Star.
The group was sanctioned in the state in December 2022 over a series of failings. It was fined $100.0m and informed its licence could be suspended unless it could prove it was suitable to hold a licence. Star was given 12 months to resolve its issues with an initial deadline of 1 December 2023.
However, this was pushed back to 31 May this year after Star submitted a draft remediation plan to address issues. Authorities last month delayed this again, saying they wanted to see the second Bell Inquiry before making a final decision.
Star heading for full-year revenue drop
This week, Star also revealed it is set to report a decline in full-year revenue on the back of a “challenging” 12 months.
For the year ending 30 June, Star is forecasting that revenue will be between AU$1.68bn (£879.6m/€1.04bn/US$1.11bn) and $1.69bn. The upper end of this range would be 11.1% behind the $1.90bn posted in FY23.
Star speaks about “challenging” trading conditions, which have been constant throughout the year. It also highlights higher operating costs due to remediation and transformation activities, as well as increased resourcing in risk and control functions.
With this, Star is also forecasting a decline in adjusted EBITDA. This is set to be between $165m and $180m, with the upper end being 43.2% lower year-on-year.
Star made the forecast with Q4 set to end later this week. Expectations for the final quarter are also low, with revenue set to fall 3.3% year-on-year and 4.3% quarter-on-quarter.
In terms of future planning, Star referenced possible asset sales. These include the Treasury casino, hotel and car park, with talks over a deal in motion. Star is also considering selling other, non-core assets, with further updates due when it posts its FY24 results later in the year.
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