Why The Star Entertainment Share Price Has Fallen Again

This morning Star Entertainment Group Limited [ASX:SGR] shares have dipped by 0.64%

This is the latest in a series of falls, since the company released half-year earnings in early February. The market seems to have viewed the results as mixed at best. At the beginning of February they were trading at $6.36 a share. Today they have dropped to $5.42.

Star’s market cap is valued at $4.479 billion and enterprise value stands at $5.52 billion.

Star Entertainment is an integrated resort company that provides an extensive array of hospitality functionalities.

They operate across three different segments with property in Sydney, Gold Coast and Brisbane.

Star Entertainment’s Gold Coast hotel launch

Star Entertainment is set to release their new Gold Coast hotel ahead of the Commonwealth games.

‘The Darling’ is a 17-storey high hotel which will feature 57 rooms.

Star has undertaken a $345 million refurbishment of the Star Gold Coast located in Broadbeach.

The hotel has been in development for three years as Star Entertainment Group has been preparing to reveal it.

The Urban Developer reported that Managing director Geoff Hogg stated:

‘The Darling positions The Star Gold Coast at the premium end of the market and ensures the Gold Coast has an even more compelling value proposition as we seek to compete on a global scale for domestic and international visitors.’

The Darling will connect to the more recently refurbished five-star hotel, The Star Grand.

Share Price Growth in Star Entertainment’s Future?

Star Entertainment are working towards improved earnings across the group, while sustaining domestic growth through a capital development program.

The business wants to improve earnings through gains in customer engagement and operating efficiency.

Brand loyalty, customer service and tourism are strong business aspects that they want to further enhance.

Star is aiming to expand their Sydney hotel property to 1000 premium hotel rooms, while also incorporating a Lyric theatre and signature gaming areas.

Partner contributions have provided all the necessary funding arrangements, as well as free cash flow generation.


Ryan Clarkson-Leward

PS: Hotel stocks like Star are almost always heavily exposed to the real estate market. Fluctuations in real estate values can make or break companies like this. But after so many years of non-stop growth, is Aussie real estate about to crash? You may be surprised by the answer. The Markets & Money team have prepared a FREE report on the Aussie real estate boom that you can download here.

Ryan Clarkson-Ledward is a junior analyst for Markets & Money. Ryan has degrees in both communication and international business. His priority is bringing you the latest price updates on stocks through ASX updates, as well as supporting Sam Volkering with background research. As part of the team at Markets & Money his aim is to provide unbiased and relevant news for readers. Ryan’s work with Sam is designed to provide research that complements Sam’s analysis for small-cap and technology stocks. Together, their objective is to break through all the jargon and give you the hard facts to inform your investment decision-making. Ryan writes for:

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