VILLAGE ROADSHOW THEME PARKS ARE ON A HIGH
MOVIE World operator Village Roadshow says its Gold Coast theme parks are trading ahead of expectations this financial year, driven by a new pricing strategy.
Shareholders were told yesterday, at the company’s annual meeting in Melbourne, that the theme parks were ahead of budget for FY19, with a “sustainable” earnings recovery expected.
And shareholders were also told by chairman Robert Kirby that the board will only consider reinstating dividend payments at the end of the financial year if “appropriate”.
The theme park sector has struggled since the Thunder River Rapids Ride tragedy at Dreamworld in October, 2016, which claimed four lives.
The Commonwealth Games also led to a fall in attendance during the Easter break. However, Village has performed marginally better than rival Ardent Leisure, booking a $7.3 million underlying loss for FY18 compared to Ardent’s $88.6 million loss.
Village has invested considerably in its theme parks, including opening the DC Rivals HyperCoaster at Movie World last year, the sea jellies attraction at Sea World, and a new show at Australian Outback Spectacular.
It has also moved to cut debt at the same time, selling its 50 per cent stake in its Singapore cinema business for $164 million, selling and leasing back its land at Oxenford for $100 million, and also divesting itself of the Wet’n’Wild Sydney park.
The company also completed a $50 million capital raising in July.
Net debt has shrunk from $627 million at the end of FY17 to $316 million at the end of last month.
Mr Kirby said the “severe impact” of the Dreamworld tragedy had continued in FY18. However, he said, the parks’ ticketing strategy had led to improved sales.
“This supports the company’s confidence in an earnings recovery from this division,” he said.
Mr Kirby said the business has a sound platform for building profitability.
“Our primary businesses are going out experiences, and they remain financially strong,” he said.
“We also continue to operate our businesses in an environmentally and socially responsible manner, while continuing to maximise long term shareholder value.”
Shares closed up 7 , or 2.9 per cent, at $2.42.