Star Entertainment Group returned to positive earnings in the September quarter, supported by higher revenue and lower corporate costs.

The Australian casino operator reported consolidated EBITDA of A12 million for the three months ended September 30, compared with a 13 million loss in the same period last year.

Group revenue increased 2% year-on-year to A$284 million. The Star Sydney and The Star Gold Coast generated more than 98% of consolidated first-quarter revenue, while Brisbane also delivered a strong result.

Star shares closed 13% higher at A$0.135 on Tuesday after rising as much as 26.1% during the session.

Chief executive Bruce Mathieson Jr said the company expects to begin rebuilding cash during FY27.

“We now expect to start building cash reserves in FY27, before non-operating items,” said Mathieson Jr, according to Reuters.

Star held a 239 million in cash and cash equivalents at the end of September, down from a 267 million at the end of June.

Brisbane Delivers Record EBITDA

Revenue increased across Star’s Sydney, Gold Coast and Brisbane operations during the quarter.

The Star Brisbane generated EBITDA of A$37 million before the management fee charged to the Destination Brisbane Consortium. That result was nearly three times the prior corresponding period and marked a record for the property.

Lower overheads also contributed to the group improvement. Unallocated corporate costs fell 29% to A$23 million.

Star said operating free cash flow for FY27, excluding one-off items, was positive. The company expects the financial year to become its first period of positive annual operating cash inflows before one-offs in more than two years.

Philip Deloughery, head of equities at MPC Markets, said investors saw the results as encouraging, although he described the update as a relief rather than a “clean bill of health.”

He added that Mathieson’s comments on rebuilding cash reserves provided a useful indication of Star’s near-term financial position.

Regulatory and Financial Pressure Continues

Star still faces several unresolved issues despite the improved operating result.

AUSTRAC is seeking a financial penalty of up to A$400 million following findings related to anti-money laundering compliance failures at Star’s Australian casinos.

The company said in its official report (pdf) continuing matters could affect future assessments of whether it can remain a going concern.

Regulatory oversight also remains in place across its casino portfolio.

The Star Sydney casino licence is still suspended, and external manager Nick Weeks has been appointed until June 30, 2027.

At The Star Gold Coast, the deferred licence suspension and Weeks’ appointment currently extend to the end of March. External advisory arrangements at The Star Brisbane also remain in place until March.

Star said these matters will be reconsidered when it prepares its half-year financial statements, although it gave no guarantee that they will be resolved by then.

Shares Rise After Quarterly Update

The September-quarter figures represented a clear improvement from the same period last year.

Stronger property earnings, particularly in Brisbane, and reduced corporate costs helped Star return to positive EBITDA and operating cash flow.

The market responded positively, sending the company’s shares to a three-week high.

Star’s next challenge will be maintaining that operating improvement while managing the potential AUSTRAC penalty and ongoing regulatory oversight at its casinos.