RIDE TO PROFIT

Roadshow gets back on track with assets sell- off

THEME park and cinema operator Village Roadshow is selling its huge Gold Coast land holdings in a $ 100 million cash grab and 90- year leaseback deal.

The listed company, controlled by Melbourne’s Kirby and Burke families, wants to use the money to reduce debt and fund growth.

The 154ha site includes Warner Bros Movie World, Wet’n’Wild, Paradise Country, Australian Outback Spectacular and Village Roadshow Studios.

Shareholders were unmoved by the announcement: although the volume of shares traded was higher than usual at the opening yesterday, Village shares closed up just 3c, or 0.8 per cent, at $ 3.73.

“This sale and leaseback will unlock the value in these land assets, allowing Village Roadshow to pay down debt and free up capital for growth initiatives,” Village Theme Park chief Clark Kirby said.

Village is offering a relatively strong, long- term income stream for the commercial property.

With a starting rent of $ 6.2 million a year, it signals a 6 per cent annual yield for a $ 100 million price tag.

The leaseback deal includes 3 per cent annual rent increases, while the initial lease of 30 years – one of the longest in the Australian commercial property market – is followed by a further 60 years in options.

Village last month reported a $ 66.7 million loss for the year to June following a downturn in theme park visitor numbers.

That followed the death of several visitors at the Dreamworld theme park, owned by Ardent Leisure, when a ride malfunctioned last October.

In its full- year results, Village was also forced to book a $ 90 million loss from bad investments and impairments. According to its accounts, the company had total debt of $ 627.5 million at the end of June and net debt of $ 527 million.

As well as the existing attractions on the land for sale, Village is also building a Topgolf venue on the site and has development approval for a nine- storey hotel.

It is also about to open the longest, highest and fastest rollercoaster in the southern hemisphere, known as the DC Rivals Hyper-Coaster, this month.