Having long been the target of acquisition talks, Ardent Leisure (ASX: ALG) will be pleased to have held on to Main Event Entertainment when talks went quiet amid the onset of a pandemic. But having held their stake through disastrous trading conditions, the US-based entertainment centre business is now thriving as Americans are flocking to the locations in droves under minimal COVID restrictions.
Considered only a small part of Ardent’s portfolio which has long been anchored by their Gold Coast theme parks, Main Event operates 44 entertainment centres across 16 US States, of which 42 have re-opened with the other two expected to re-open shortly.
As the COVID vaccine continues to be rolled out across the US and foot traffic gradually returns to normal, Main Event has reported stronger earnings than pre-COVID levels.
Upgrades to facilities and the rollout of virtual reality gaming have been drivers of new foot traffic.
For the months of March and April 2021, Main Event has delivered USD $23.7 million in EBITDA excluding significant items, a substantial increase on the same months in 2019 (pre-COVID).
The performance signals a turnaround in operating activity where the centres were subject to acquisition interest before the pandemic. Flagged as one of Ardent’s strongest assets in a market where arcades and entertainment centres have performed much better than other regions.
March and April alone have delivered 4x earnings of January and February 2021 which netted $5.7m EBITDA excluding significant items as centres were still re-opening.
With this resumption of normal business, Ardent intends to progress with its expansion plans for Main Event which is set to open at least 4 new centres in FY22.
In June 2020, RedBird Capital Partners invested USD $80m to secure a 24.2% stake in Main Event Entertainment after broader acquisition discussions ceased during the pandemic.
Back in Australia, Ardent Leisure continues to prepare for a post-COVID world where the Company recently announced plans to build a $75 million resort and tourist park next to Dreamworld to promote visitors to ‘stay and play’. The 4-star resort will have 250 rooms while the 5-star tourist park will have 40 bungalows and 100 powered sites.
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