Ardent Leisure suffers another loss, warns of further impact from Dreamworld tragedy

Gold Coast, Australia - December 02, 2014: The Facade of Dreamworld Gold Coast entrance building, Australia National flag flying against the beautiful clouds and blue sky.

The company behind popular Aussie theme parks Dreamworld and WhiteWater World reported yet another dour result for its bottom line.

Ardent Leisure recorded a net loss after tax of $22.5 million for the six months to 31 December 2019 ($19.8 million on a pro forma basis) – compared to the $21.8 million loss it posted in the prior corresponding period.

The company blamed the loss on higher costs as a result of a new lease accounting standard (AASB 16 Leases) and higher borrowing costs, as well as an extra week of trading with FY20 being a 53-week year.

Despite this, Ardent Leisure’s half-yearly earnings before interest, taxes, depreciation, and amortisation jumped by $44 million ($14.7 million on a pro forma basis) to $44.2 million, which it attributed to growth in both its theme parks and Main Event businesses.

In more positive news, overall revenue for the company rose from $226.7 million to $263.2 million ($247.2 million on a pro forma basis).

The group’s US-based leisure and entertainment business, Main Event, saw earnings rise from $24.2 million to $54.6 million ($25.4 million on a pro forma basis) and revenue grow from $210.4 million to $233 million ($218.8 million on a pro forma basis).

Earnings for Ardent Leisure’s theme parks – Dreamworld, WhiteWater World and SkyPoint – fell from $12.4 million to $4.2 million ($5.4 million on a pro forma basis) in the first half of FY20, while revenue rose from by $34.4 million to $38.7 million ($36.1 million on a pro forma basis).

Ardent Leisure noted that despite a strong Christmas holiday trading period, a prolonged period of severe wet weather, the coronavirus and the potential impact on attendances from the coroner’s report into the Thunder River Rapids ride tragedy in 2016 (which is being released today) meant it was unlikely that Dreamworld will break even in the second half of FY20.

“Management believe these challenges are temporary and remain focused on successfully executing planned investments and initiatives,” the company said.

“Planning is well advanced on projects such as the new multi-launch roller coaster, ticketing and digital marketing system, the refurbishment of the ABC Kids and Wiggles precincts (including a new ride), Future Lab, the site master plan, and the development of a pipeline of new rides and attractions for installation over the next three to five years.

“Theme Parks are part of an industry that is showing strong growth in similar markets around the world. The turnaround plan is working as shown by the improved performance in 1H20.”

Featured image: iStock/catchlights_sg

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