Theme park operator’s next bold step

SHARES in theme parks and cinema operator Village Roadrose 2.26 per cent yesterday as it opened the retail round of a $51 million capital raising exercise so it can pay off debt.

Existing retail shareholders have been offered the chance to purchase five new shares for every 26 they hold at a discounted rate of $1.65 each.

Village yesterday released the offer documents for retail shareholders, after closing off the institutional entitlement round last Wednesday. The retail offer closes next Thursday.

Shares were trading at $1.81 at close of market yesterday, up from $1.77 on Monday.

Combined with the $37 million sale of its Sydney waterpark, the fundraising will help reduce the company’s borrowings by $87 million as it continues to grapple with slow trading in the wake of the Dreamworld tragedy.

The company has $375 million in debt which is due to mature in December next year.

Village said the new shares would only be available to shareholders in Australia and New Zealand and said their offer document, available on the ASX website, must not be distributed or released in the United States.

Village has also written down the value of its Gold Coast theme parks by $95 million, due to lower earnings and the sale of the Oxenford land where the parks are situated.

The company also updated its guidance for the past financial year, saying it expects pretax earnings of between $88 million and $92 million, which it described as their “lowest in a decade”.

It is forecasting an after-tax loss of between $6 million and $10 million for FY18.

Village said it expects a revised ticket pricing strategy to result in a substantial increase to ticket revenue this financial year.

The company sold its halfstake in Singapore cinema business Golden Village for $165 million last year and also sold, for $100 million, the land at Oxenford, which hosts its Gold Coast theme parks.

The company also pumped money in to its Gold Coast operations.