Sales to follow plunge
GOLD Coast theme park operator Village Roadshow says the impact of the Dreamworld tragedy on visitor numbers will disappear soon, as it looks to sell assets to retire debt.
Shares in the company plunged 14.6 per cent to $3.22 in the wake of the release of its latest half-year results before recovering to close at $3.56, down 21¢.
The company declared a net loss of $6.7 million compared to $3.5 million in the previous corresponding period due to losses from material items after tax of $25.9 million.
A poor result at Gold Coast theme parks contributed to a net debt level of 3.27 times pre-tax earnings.
VRL said the ratio is unacceptable and it will focus on reducing debt through asset sales. However, it did not specify what assets are earmarked for divestment.
Revenue from Gold Coast theme parks – Movie World, Sea World, Wet’n’Wild, Paradise Country and Australian Outback Spectacular – was slightly down at $38 million compared to $38.7 million for the FY16 first half.
VRL said theme park attendance fell 8.4 per cent between October 26 (the day after the Dreamworld tragedy) and February 7.
Overall revenue at its theme parks, including Wet’n’Wild Sydney and Wet’n’Wild Las Vegas, was up $600,000 to $42.6 million.
The company said it expects the division to deliver FY17 pretax earnings below the previous year’s $80.1 million, but the final figure will depend on special-offer sales.
VRL executive Graham Burke said, while the Dream- world incident had impacted on business, its effects will ebb and visitor numbers will return to normal reasonably quickly.
Mr Burke said VRL has the “most rigorous safety standards in the industry” and the chance of being hurt at one of its theme parks is one in 300 million.
“Compare that to a onein-70,000 probability of being hurt driving home from Gold Coast Airport,” he said.
“People can take one of our rides with the same confidence they have when they board a Qantas or Virgin flight.”
Mr Burke said, despite the half-year loss, he is happy with the company’s performance, singling out its Australian cinema business which recorded pre-tax earnings of $29.1 million – its secondhighest half-year result on record.
“We are progressing in a way that we’re pleased with,” he said.
VRL’s film distribution business had a poor result with pre-tax earnings falling $4 million to $10.8 million after the under-performance of titles Deepwater Horizon and Red Dog: True Blue.
The company, which has 55 cinema sites across Australia, plans to open a new cinema at Coomera late next year.