Finally, it’s good news for Ardent

SHAREHOLDERS in struggling Dreamworld owner Ardent Leisure received some rare good news in a trading update for the first quarter at the company’s annual meeting yesterday.

However, the update by group chief finance officer Darin Harper did not lead to a spike in the share price, which closed down 1.5¢, or less than 1 per cent, at $1.535.

Ardent has struggled to restore visitor numbers at Dreamworld to levels seen before the October, 2016 Thunder River Rapids tragedy, which claimed four lives.

An inquest into the tragedy is expected to conclude next month.

Mr Harper told shareholders yesterday that increased ticket prices had seen revenue at its theme parks division surge 19 per cent in the first quarter, based on a per capita spend that was 26 per cent higher.

However, a recovery in visitation numbers for the second half had been stifled by renewed media coverage of Dreamworld when the coronial inquest began again in June.

Attendance was down 6 per cent at the same time.

“We believe that our attendance decline is directly correlated with the coronial inquest (and attendant media coverage) which commenced in June, 2018, continued for two weeks in October and two more weeks in November,” Mr Harper said.

He said it expected “chal- lenging sales” conditions to continue until at least the end of the inquest next month.

He said the increased revenue was offset by increased costs relating to new safety systems, processes and people at its theme parks.

“This resulted in a pre-tax loss of $3.8 million for the four months to October, of which $1.8 million relates to restructuring and one-off items,” Mr Harper said.

“The park has also seen increased capital investment, with approximately $16 million of development capital invested in the first half of FY19.”

At the same meeting, chairman Gary Weiss said the sale of d’Albora Marinas ($126 million) and the bowling and entertainment division ($160 million) had enabled Ardent to reduce net debt to $11 million at the end of the past financial year.

He said it had freed up capital to invest in Main Event and new attractions at Dreamworld.

Ardent will seek new credit facilities in the US to provide further capital to invest in its assets.

Mr Weiss said the focus this year had been to review Dreamworld’s operations and identify areas for investment.

“We have already made significant investment in new safety systems, processes and people, and remain committed to restoring value through new rides and attractions, improved guest services, retail offerings and increased food and beverage outlets,” he said.

Mr Weiss said the coming opening of the flying theatre – Sky Voyager – was the biggest investment in a Dreamworld attraction in many years.

“This family attraction will take guests on an immersive journey over some of Australia’s greatest landmarks with special effects such as wind, sound and light in a 4D simulated experience,” he said.

Mr Weiss said Westfield Coomera, which recently opened its doors, was an opportunity for more visitors to come to the region and, in turn, visit the theme parks.

Also, at yesterday’s annual meeting, shareholders approved a plan to reunite Ardent Leisure Trust and Ardent Leisure.

The company said the merger would allow the newly formed company, Ardent Leisure Group, greater flexibility to fund investment into the growth of US-based Main Event and Dreamworld.

It would also make Ardent Leisure Group more attractive to a broader range of investors and reduce the regulatory uncertainty associated with stapled structures.

Ardent reported a $88.6 million loss for the past financial year on the back of a drop in Dreamworld visitors with 1.658 million filing through the turnstiles compared to 1.663 million the year before.

The theme park division reported revenue of $69.9 million, down 1.4 per cent for the same time last year, as the business continued to be affected by the slow recovery after the tragedy.

Main Event accounted for more than 80 per cent of revenue in FY18.