I am pleased to report to shareholders again this year, that the 2019 financial year saw The Star Entertainment Group’s portfolio of high-quality tourism, entertainment and gaming assets continue to expand in our attractive local destinations of Sydney, the Gold Coast and Brisbane. This continued expansion was coupled with strong domestic results and a reset of the organisational structure to ready the Group for the next stage of its growth and development.

The strong performance of the domestic business, coupled with the increase in International VIP business visitors, is a testament to the investment being made in our properties and positioning to capitalise on opportunities within both domestic and international tourism markets.

The Star’s growth strategy continues to be supported by the development of The Star’s strategic alliance with our Hong Kong-based joint venture partners, Chow Tai Fook Enterprises (CTF) and Far East Consortium (FEC), announced last year. The 2019 financial year marked five years of this valued partnership with CTF and FEC – the $3.6 billion Queen’s Wharf Brisbane bid being the vehicle that created the initial joint venture partnership. In the 2019 calendar year, we are looking forward to delivery of the first of the new public spaces within the Queen’s Wharf Brisbane development, including the Mangrove Walk and Waterline Park.

Pleasingly, the depth of this partnership continues to develop, with pursuit of marketing opportunities through the strategic alliance and the ongoing development projects, including construction underway on the Dorsett hotel and residential tower within the Gold Coast masterplan, and pre-sales commenced for the residential component of the second tower, which is to include another five-star hotel.

The value of existing assets and proposed investment in Queensland by The Star and its partners, CTF and FEC, underline our commitment to continue as a leading tourism infrastructure investor for the State.

The 2019 financial year results were in line with the earnings guidance provided in June 2019. Pleasing growth in domestic earnings was offset by softer International VIP Rebate business results, which were impacted by market conditions, although visitor numbers were up.

Statutory NPAT for the Group was $198 million, up 33.7% on the prior year (after significant items). Statutory earnings before interest, tax, depreciation and amortisation (EBITDA) increased 14.1% on last financial year to $553 million (before significant items). Statutory results were supported by an actual win rate of 1.38% in the International VIP Rebate business as compared with 1.16% in FY2018.

In normalised terms, at a win rate of 1.35%, the full year normalised NPAT result was $224 million (after equity accounted investments, but before significant items), down 8.4% on FY2018 and normalised EBITDA was down 2.0% to $557 million (before significant items).

In light of the business performance overall, and the strength of the Company’s balance sheet, the Board declared a final dividend of 10 cents per share (fully franked), taking total dividends for the year to 20.5 cents per share (fully franked). This total dividend amount is in line with FY2018 and reflects a payout ratio of 84% of normalised NPAT.

The Board has confidence that the organisational changes and cost management measures implemented in 2HFY2019 will position the Group to continue to deliver high-quality results in the context of softening macro-economic environment and some challenging market conditions, both domestically and internationally.

With the Board’s full support, in 2019 Managing Director and Chief Executive Officer, Matt Bekier, led an organisational structure reset, including changes to the executive management team. These changes will support the company’s further transition over the coming years, in both a practical and an attitudinal sense, from development to readiness to deliver and operate extensive new assets in New South Wales and Queensland.

The reset structure, under Matt Bekier’s leadership, provides confidence that the company is well positioned to continue to deliver against the rising expectations of external stakeholders, including guests, investors, regulatory authorities and the broader community, in relation to the sustainable and socially responsible delivery of services within our industry. The Board and management remain cognisant of the need for ongoing focus and vigilance as a hallmark of success.

On behalf of the Board, I congratulate and thank Matt Bekier and the management team on their dedication to making The Star Entertainment Group Australia’s leading integrated resort company and returning value to shareholders.

I also thank my fellow directors on the Company’s well-established Board of Directors for their ongoing commitment.

I extend a warm invitation to all shareholders to join me and my fellow directors at the 2019 Annual General Meeting, which is being held in Brisbane for the first time as we prepare to deliver the first stages of public realm areas within the Queen’s Wharf Brisbane precinct.

Thank you to all shareholders for your support for the Company’s vision and strategy to be Australia’s leading integrated resort company.

John O’Neill AO

33.7% TO $198

14.1% TO $553