In a significant leadership shake-up, Star Entertainment Group has announced the appointment of Ciarán McCann as its new Chief Executive Officer. McCann, who previously served as the CEO of Crown Resorts, will officially step into his new role on July 8th, pending regulatory approvals. He takes over from Robbie Cooke, who resigned in March but continued to contribute as a consultant during the search for a permanent replacement.
Neale O’Connell, the interim group chief financial officer, has been acting as CEO in the interim period. Additionally, newly appointed chair Anne Ward has assumed broader responsibilities during this transition phase. McCann’s extensive experience in high-level executive roles makes him a prime candidate for the leadership of Star. His career spans nearly three decades, including an 18-month tenure as CEO and managing director of Crown Resorts from May 2021 to September 2022.
Previously, McCann dedicated over 15 years to Lendlease, a real estate development and investment group, where he spent more than a decade as its group CEO. His career also includes significant roles in ABN AMRO and Bankers Trust, underscoring his extensive experience in senior leadership positions.
Speaking about his appointment, McCann acknowledged the critical juncture at which he is joining Star. “I recognise that there are many complex issues and challenges for the company to address,” McCann stated. “I am committed to working with the board and the various stakeholders to help drive change, restore confidence and achieve a sustainable resolution.”
Chair Anne Ward expressed optimism regarding McCann’s appointment, lauding his credentials and past performance. “Given his time with Crown and previous long-standing leadership at Lendlease, he has the right credentials to lead Star’s remediation program,” Ward remarked. “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.”
The leadership change comes amid a series of regulatory challenges that have plagued Star Entertainment in recent years. Both McCann and Ward acknowledge the substantial work required to restore customer and stakeholder confidence in the company.
One of the most pressing issues facing the new leadership is the New South Wales Independent Casino Commission’s (NICC) second inquiry into Star. This inquiry, led by Adam Bell SC, who also conducted the first Bell report, focuses on how Star has responded to recommendations from the initial investigation. The first inquiry declared Star unsuitable to hold a casino license in New South Wales in September 2022, revealing a host of anti-money laundering and social responsibility failures.
. The second inquiry commenced in February, with a final report submitted last month, although the details have yet to be released.
In addition to the ongoing inquiries, regulatory authorities in Queensland recently announced another delay to the planned suspension of Star’s license. The company was sanctioned in December 2022 for multiple regulatory failings, with penalties including a $100 million fine and a threat of license suspension unless compliance issues could be resolved. Originally granted a deadline of December 1, 2023, to address these issues, Star’s submission of a draft remediation plan extended the deadline to May 31. Last month, officials delayed it further, awaiting the findings of the second Bell Inquiry before making a final decision.
Compounding these regulatory issues, Star Entertainment also anticipates a dip in full-year revenue following a particularly challenging 12 months. For the fiscal year ending June 30th, the company projects revenue to be between AU$1.68 billion and AU$1.69 billion, a decline of up to 11.1% from the AU$1.90 billion posted in the previous financial year.
The company attributes these financial setbacks to adverse trading conditions, consistent throughout the year, as well as rising operating costs linked to their remediation and transformation efforts. Increased spending on risk and control functions has likewise contributed to this financial strain. Consequently, Star also forecasts a decline in adjusted EBITDA, predicting figures between AU$165 million and AU$180 million, the upper limit of which would signify a 43.2% year-on-year decrease.
Looking forward, Star Entertainment is contemplating various asset sales as part of its strategic planning. Among the assets considered for sale are the Treasury Casino, hotel, and car park, with negotiations already underway. The company is also eyeing divestiture of additional non-core assets, with further updates expected when it releases its FY24 results later in the year.
As McCann prepares to assume his new position, Star Entertainment Group’s future hangs in a delicate balance. The new CEO’s mission will be to navigate these regulatory challenges and financial hurdles, all while steering the company toward a path of renewed trust and long-term sustainability.
