With a new name, attractions and spirit, theme parks and entertainment company Coast Entertainment Holdings (ASX: CEH) has kicked off life to shed baggage of yesteryear dramas but not even a surge in ticket sales was able to offset losses incurred from storm damage to its attractions.
A class action lawsuit (costing the Company about $4 million), damaged property due to devastating storms (the most damage it saw in 30 years), asset sales and tax losses became a horror ride for Coast Entertainment which reported an EBITDA loss of $5.2 million.
Still, not everything was downhill.
Its Theme Parks & Attractions business saw a 6.5% growth in visitation in H1 FY24 compared to the prior period. This came even as a severe storm on Christmas night prompted the closure of Dreamworld and WhiteWater World, impacting attendance. While visitation for the month increased by 11.8%, December attendance before the closure was trending strongly, up 22.9% on the prior corresponding period.
During the half, the business increased promotional activities and opened new attractions including Kenny and Belinda’s Dreamland precinct, the Dreamworld Flyer and the Wiggles Big Red Boat coaster. These have seen ticket sales in H1 FY24 being the highest recorded since H1 FY16, up 11.8% on the prior period.
Group Chief Executive Officer, Greg Yong, said, “H1 FY24 was coloured by a backdrop of external factors, from high inflation affecting costs of doing business and consumer confidence, to severe weather activity. The half was also impacted by a substantial amount of capital works occurring throughout Dreamworld and in a difficult macroeconomic construction environment.”
Coast Entertainment, formerly Ardent Leisure (ASX: ALG), is the Company behind Dreamworld, WhiteWater World and SkyPoint theme parks and attractions across Australia.
In the first half of FY24, the Company’s revenue held steady at $43.5 million despite a change in sales mix and challenges. It saw a $3.2 million increase in deferred revenue compared to December 2022. This was achieved despite international visitation remaining well below historical levels and the prior period benefitting from $2.4 million of revenue funded by guests utilising vouchers provided under Queensland Government COVID stimulus programs.
Yong added, “Management remains focused on delivering a differentiated and compelling guest experience. As a result, we have continued to achieve category-leading guest review scores, which have again outperformed our Gold Coast theme park peers notwithstanding the significant impact of construction works on the guest experience.
“The Group is well positioned to create further value, with ongoing strong performance at SkyPoint, the new Jungle Rush and Rivertown development on track for Dreamworld, and the Company’s submission to the City of Gold Coast for revitalised uses of owned land currently underway.”
The Theme Parks division recorded a positive EBITDA excluding Specific Items of $3.1 million, slightly below $4.3 million in the prior period, due to inflation and bad weather.
After the first storm, Southeast Queensland suffered a second severe storm, causing further damage and disruption to the parks. Together, the two storms resulted in the closure of Dreamworld for a further two days and WhiteWater World for a further four days in H2 FY24. The impact has been felt beyond the days of closure due to cancellations of travel and accommodation into the Gold Coast and continuing inclement weather.
January 2024’s operating revenue was 7.1% below the prior period, impacted by lost/disrupted trading days. But total attendance for January was up 8.9%, thanks to the Queensland Government launching a Gold Coast ‘Summer FUNds’ promotion in mid-January to support local tourism. All allocated Dreamworld annual passes were sold out within the first 24 hours of the campaign.
The Board continues to see significant upside potential for the business. As international visitation and local tourism boom, the Company is looking forward to entering its new chapter.
Alinda is a Business Reporter for The Sentiment
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