Village’s rough ride
VILLAGE Roadshow investors were left with a queasy feeling yesterday after the share price plummeted more than 10 per cent in the wake of a profit warning.
The company, which operates theme parks including Movie World on the Coast, yesterday flagged a first-half result “substantially below” last year’s, when it recorded a net loss of $6.7 million.
Investors punished the Melbourne-based company, sending the share price down 44¢ to close at $3.67, and wiping more than $70 million off its market capitalisation.
Village said it experienced challenging conditions at its Gold Coast and Sydney theme parks, and in its Village Cinemas business, during the six months to December 31.
The owner of Sea World and Wet’n’Wild said the October 2016 tragedy at rival amusement park Dreamworld continued to hurt its theme parks’ visitor numbers.
It said it had a slow start to the year for its cinema division due to a large number of blockbuster movies being scheduled to run in the second half of 2018 rather than earlier in the year.
However, it will be hoping investors top up their popcorn when movies such as Ready Player One, Avengers: Infinity War, Solo: A Star Wars Story, Deadpool 2 and Jurassic World: Fallen Kingdom are released.
On a positive note, the company said its Gold Coast theme parks had seen improved revenue from ticket sales this month due to a new ticketing and marketing strategy. It noted the full impact could not be assessed until after the annual pass renewal period in May/June.
In recent months, Village has cut its debt due to the sale of its Singapore exhibition business, which it said would realise an after-tax profit of about $150 million. The company also recently sold its land at Oxenford, where its Gold Coast theme parks are based, for $100 million.
However, Village said it would not record a profit from the sale as it would be treated as a finance lease for accounting purposes.
The 154ha of land was purchased by LGIAsuper.
Village will pay $6.2 million in annual rent to lease back the land, with an initial lease term of 30 years.
Village’s half-year results are due on February 16. It expects full-year net profit in the $12-$17 million range.