In the ongoing economic environment, it’s difficult to find moments of peace and joy—of relaxation. Casting around for avenues of thrill, people have taken to theme parks as a way to make the most of this time. Thanks to that, Aussie leisure company Ardent Leisure (ASX: ALG), owning theme parks like Dreamworld and Whitewater World, is reaping the rewards.
The Theme Parks & Attractions business reported an operating revenue of $83.9 million in FY23, up 70% on FY22. What’s more, its current year revenue exceeded FY19 pre-COVID levels by 25% and is the highest since FY16. This comes even as international visitation to Dreamworld/WhiteWater World remains well below historical levels.
Group Chief Executive Officer, Mr Greg Yong, said, “This year saw the first operating profit for the Theme Parks & Attractions business since 2016. This is a significant achievement given the very substantial challenges the organisation has faced in the intervening years.”
Cost pressures on households and Covid kept people’s discretionary spending limited. Still, the Group’s EBITDA loss from continuing operations of $4.8 million improved significantly compared to the EBITDA loss of $55.4 million reported in FY22. Its EBITDA has been impacted by several significant one-off Specific Items, including Dreamworld accident-related costs worth $1.3 million and associated insurance recoveries of $500k, lease payments no longer recognised in EBITDA and other non-recurring and non-cash items.
Ardent Leisure Chairman, Dr Gary Weiss, commented, “This result represents a significant improvement compared to the loss reported in the prior year and largely reflects the successful completion of the Main Event sale and growth of our Theme Parks & Attractions business.
“The Theme Parks & Attractions business has delivered positive revenue and attendance growth since the second half of FY22, and this trend has continued through FY23. Although the second half of the year has seen some economic challenges emerge, the business nevertheless achieved a 30% increase in revenue in 2H23 despite the business also cycling an unimpeded 2H22.”
Its consolidated NPAT was $665 million, a significant improvement compared to the $97 million loss in the prior year, driven by a $682 million gain on sale of Main Event Entertainment. Moreover, its solid trading performance in the Theme Parks & Attractions business and $4.8 million increase in interest income and a $1.4 million reduction in interest expense bolstered its results.
On August 24, 2023, the Company informed that it had reached an agreement with the applicants to settle the shareholder class action that was commenced in June 2020 after four people died on a ride at Dreamworld in 2016. It caused both the public and shareholders to feel incensed by the Company’s lacking safety protocols, resulting in massive losses. The settlement deed amounting to $26 million has been executed, and Ardent Leisure is required to make a one-off payment of approximately $4 million following Court approval.
Though it saw footfall decline since in 2017, it is finally picking back up as Ardent Leisure placed special focus on safety. Its theme parks were issued Major Amusement Park Licences under new government regulations, and it undertook third party audits to ensure adequate aquatic safety measures are in place.
The Company ended FY23 with $141.4 million in cash.
Alinda is a Business Reporter for The Sentiment
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