Two years of generating hundreds of millions of dollars of revenue, yet ended up with net loss after tax. The past two years of pandemic has been a bumpy roller coaster period full of terror for Ardent Leisure Group (ASX: ALG) but the ride is now turning for shareholders.
As more people come back to sunny Gold Coast and visit the theme parks for their long-awaited joyride, the Dreamworld parent company reversed the situation by concluding the first half of FY23 with $669.5 million Group net profit thanks to a one-off asset sale of Main Event, the group’s US entertainment business that was sold in June 2022 to Dave & Busters. Ardent gained $649m from the sale. Ardent now solely focuses on its Theme Parks & Attractions business consisting of Dreamworld, WhiteWater World and SkyPoint. The Group’s net profit from continuing operations amounted to $20m, a 199% increase compared to $20.2m net loss on pcp.
The increasing trend in local and international tourist visits to the Gold Coast boosted Theme Parks & Attractions division’s operating revenue to $43.7m. This was the highest result in over six years, up 136.5% on pcp of $18.5m and up 13.0% on pre-COVID levels in H1 FY20. Division EBITDA excluding Specific Items (significant non-trading income or expense items which are non-cash or non-recurring in nature) of $3.3m was positive for the first time since H1 FY17, compared to a loss of $11.8m on pcp despite the prior period benefitting from the receipt of a $2m Major Tourism Experiences Hardship Grant.
Ardent Leisure Chairman, Dr Gary Weiss, said, “We are pleased to deliver a positive EBITDA and net profit for the Group in 1H23. In what has been a long recovery journey for Ardent, exacerbated by the COVID-19 pandemic, the significantly improved trading performance demonstrates the resilience of our Theme Parks & Attractions business particularly during the recent challenging times.”
“Our priority is to focus on recovering and growing the Theme Parks & Attractions business back to, and beyond, historical earnings. We are encouraged by the growth trajectory experienced in the second half of FY22 which has continued into the first half of FY23, and we believe the business is well placed to benefit further from the gradual return of international visitors and steady recovery of the tourism industry.”
The Theme Parks & Attractions division’s growth was driven by improved guest attendances, improvements in entry and in-park yields and the business cycling a prior period which was impacted by COVID-led snap lockdowns and border restrictions. As the easing of COVID restrictions in the latter half of FY22, the business has been slowly recovering to pre-pandemic levels. During the period, activations and events programmes launched have also proven to be popular with guests, resulting in total attendances growing 67.4% on pcp and ticket sales value increased by about 84.3% on pcp.
In August 2022, Dreamworld and Whitewater World were issued with Major Amusement Park (MAP) Licences by the Workplace Health and Safety Queensland (WHSQ) under the Work Health and Safety Regulation 2011 (Qld). In November 2022, the business announced plans for several new and upgraded rides and attractions worth $50m over the next few years. This includes a new Wave Swinger ride, a redesigned and enhanced kid’s area and a new ‘Rivertown’ precinct that will include a redesigned vintage cars attraction, as well as a new major family rollercoaster. The new ‘Jungle Rush’ coaster costing $35m will feature the world’s first inclined turntable, as well as Dreamworld’s most immersive theming and storytelling ever built.
Following the Main Event sale, all debt facilities were fully extinguished, along with an amount payable to the Australian Taxation Office of $11m. The sale also resulted in a $649.5m gain on disposal and a distribution of $455.7m to shareholders, representing $0.95 per share. This comprised a $221m return of capital and a $234.7m unfranked special dividend.
As of 27 December 2022, the Group holds $147.7m of cash at bank.
Clara is a Business Reporter for The Sentiment.
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