MOVERS AND SHAKERS
FOR the Gold Coast’s best and brightest businesses, 2017 proved a mixed story of success and horror. While most have thrived in the pre-Games glow, others have dived. Kathleen Skene and Alister Thomson recap the past 12 months for some of our biggest ASX-
Special two-page report on a massive year for Gold Coast business.
STAR ENTERTAINMENT GROUP (SGR)
Casinos, hotels Market Cap: $4.95b
FY17 revenue: $2.432b
FY17 profit: $264m 52-week share price low/
high: $4.65/$6.18 Highlight: Revealed longawaited plans for rooftop masterpiece
Lowlight: Rival Crown casino’s China-jailed staff scandal hit overall casino revenue
STAR began 2017 settling on the $140 million purchase of the Sheraton Grand Resort at Main Beach, and continued as it started, making its long-time presence on the Gold Coast felt more than it had in decades.
The company renamed Jupiters The Star Gold Coast in March and has added 400 new staff during the year as it continued to roll out its $850 million development at speed.
The group has almost completed its new luxury hotel, The Darling and opened an array of new bars and restaurants at The Star Gold Coast and announced an exciting rooftop entertainment spot.
Outside the Coast, Star is also growing its site in Sydney and has embarked on the mammoth Queen’s Wharf integrated resort in Brisbane, a development plan for which was approved last month.
G8 EDUCATION (GEM)
Childcare operator Market Cap: $1.52b
CY16 revenue: $778.5m
CY16 profit: $80.3m 52-week share price low/
high: $3.12/$4.71 Highlight: Revealed plan to expand into China
Lowlight: Lost almost a quarter of its value in a day
THE year began well for the largest Gold Coast-based listed company, when it inked a $212.8 million deal with a Hong Kong company as G8 planned an expansion to Asia, with funds from the sale to be used to settle the purchase of 49 new childcare centres.
But the deal was sunk in May when the Hong Kong company failed to stump up the cash for the purchase.
Despite the setback, G8 unveiled a 22.6 per cent boost to its profit during the first six months of the year, with investors responding by sending the stock rising above $4.
But the bounce didn’t last the year, with a profit warning sending their stocks into a tailspin, wiping $458 million from its market cap in a day.
MANTRA GROUP (MTR)
THE Surfers Paradise-based hotel giant was fast off the blocks, snapping up a record $28 million management deal in February and following it up in August with the purchase of the Art Series Hotel Group for $52.5 million.
Mantra’s shares soared 13 per cent amid speculation of takeover bid, which the company denied, but which turned out to be true later in the year, when it was revealed Accor Hotels had made a $1.2 billion offer for the company.
The board approved the deal in October, and shareholders will have their vote early this year.
ARDENT LEISURE GROUP (AAD)
THE operator of Dreamworld, Whitewater World and Skypoint reported consecutive drops in visitation across its parks as it approached the oneyear-anniversary of the accident which claimed four lives at Dreamworld.
Theme parks revenue fell by $37 million to $71 million and earnings by a similar amount, resulting in a loss for the year of $3.4 million for that division. The company lost one CEO, Deborah Thomas, in April and then another in November, as Simon Kelly resigned suddenly.
The CEO of its bowling and entertainment arm Nicole Noye also stepped down, two days after Christmas, and the CEO of its US-based Main Event business also left.
Along with the executives, the company’s board was completely overhauled after a successful challenge from investor group Ariadne Australia.
New chairman Gary Weiss took over from George Venardos, who had taken over from Neil Belnaves a year before that.
VILLAGE ROADSHOW LTD (VRL)
LIKE its fellow theme park operator, Village Roadshow’s visitation slumped during the year, and it was also hit by reduced earnings from film distribution due to the underperformance of films.
It responded in 2017 by investing heavily in new attractions, including the drawcard DC Rivals Hypercoaster, and an under-construction $35m Top Golf facility.
Last month, the company improved its cash flow and announced it would erase some debt by selling 154ha of land under Movie World for $100 million under a sale and leaseback arrangement.
RETAIL FOOD GROUP (RFG)
Lowlight: Value wiped overnight by franchisee scandal
RFG remains one of our largest companies, despite a plunge in its market capitalisation. Its market cap was north of $800 million prior to claims of a brutal business model that was hurting franchisees.
Now, its market cap is less than half what it was in December. It has had a very tough few months, where its reputation has taken a battering.
Those claims came on the back of flagged changes to International Financial Reporting Standards that meant retailers would have to recognise rental payments over the entire term of a lease as a balance sheet liability - potentially adding $105 million in lease debt from 2019.
Despite those setbacks, boss Andre Nell can look forward to the proceeds of its overseas expansion flowing into company coffers. The share price remains a target for shortsellers, however, and shareholders must be braced for more bad news when the first-half results are released next month. RFG has said it will be less than the $22 million net profit previously flagged - which was already 34 per cent down on the previous year.
VILLA WORLD (VLW)
FY17 revenue: $386.8m
FY17 profit: $37.8m 52-week share price low/
high: $2.09/$2.87 Highlight: Posting 12 per cent growth in profit
Lowlight: CFO Paulene Henderson resigned
THE housing developer made a savvy $33 million acquisition in March, boosting its presence in Victoria, after spreading debt to create a $50 million war chest to fuel a year of big buys. In August, shareholders rejoiced as the company posted a fourth consecutive profit and after receiving an 18.5c dividend.
Last month Villa World announced a joint venture with Singapore’s Ho Bee Land to deliver an $84 million project in Melbourne.
The company also announced it was forecasting 1H18 net profit after tax of $17$18 million — up from its August forecast of between $10 million and $12 million.
SUNLAND DEVELOPMENT GROUP (SDG)
SUNLAND has a raft of projects in the works including twin-towers at Greenmount and a high-rise on Hedges Ave.
While its Mariner’s Cove twin towers proposal remained on the shelf for 2017, the company still has it on the books, with a realisation date of 2021.
A share buyback program continues to enhance earnings per share, which is keeping shareholders happy. Ditto the 4.53 per cent dividend yield.
PWR HOLDINGS (PWH)
PERFORMANCE car parts group PWR Holdings is one of our quiet achievers. The Ormeau-based company makes cooling systems for Formula 1 and NASCAR race cars.
It estimated recently that Formula 1 teams spent $3 billion in 2016 and the company is gunning for a fair chunk of that.
It has a local workforce of 160 staff, and is a successful exporter with the vast majority of its revenue coming from ex Europe and the US. Last year the company said it sees opportunities in emerging tech-