BUTTERFLIES FOR ARDENT IN DREAMWORLD PROFIT DROP

Written on the 16 February 2012

BUTTERFLIES FOR ARDENT IN DREAMWORLD PROFIT DROP

ARDENT Leisure’s (ASX:AAD) theme park division went backwards in the first half of the 2011-12 FY, recording an 8.5 per cent decline in revenue on the previous period.

Dreamworld is the flagship of the division, which also includes the recently-launched SkyPoint Climb atop the Q1 residential tower in Surfers Paradise.

Of the group’s four divisions, theme parks recorded the only reduction in profit, with its US-based Main Event delivering 19.6 per cent earnings growth.

The theme park’s statutory earnings for the period ending December 2011 totalled $19.8 million, representing an 8.6 per cent decrease on prior period earnings of $21.6 million.

The division’s revenues of $53 million represented an 8.5 per cent decline on revenues of $57.9 million in the prior period.

Despite the revenue decline, operating margins remained consistent at 38.7 per cent against 39.2 per cent recorded in the prior period.

Christmas holidays saw earnings rebound in January, with unaudited earnings before interest, tax, depreciation and amortisation (EBITDA) up 8.7 per cent on the previous period.

The company says restructure of pricing and new product releases drove a strong increase in per capita yield, partially offsetting lower attendance levels caused by a high Aussie dollar and poor weather for the first few months in 2012.

Despite the profit dip, CEO Greg Shaw says Dreamworld’s partnership with DreamWorks will provide a timely boost.

“The second half will see the opening of the new DreamWorks themed precinct as the start of a long-term alliance with this world-leading animated film producer,” he says.

“The first stage of the DreamWorks alliance commenced with the launch of the Shrektacular Holiday show throughout the December/January school holidays, with very positive guest feedback (received).”

SkyPoint Climb opened to the public in January and is expected to drive incremental revenue and earnings in the second half.

The group expects to return to positive trading conditions at its theme parks, with a focus on product innovation and margin improvement.

Health clubs were strong performers for Ardent, registering 18.9 per cent earnings growth.

The group recorded positive results overall, with revenue up 2.1 per cent to $200 million and core earnings up 1.6 per cent to $27.3 million.

Ardent’s fourth division, bowling, remained steady with 0.1 per cent growth in EBITDA.

Ardent shares last traded at around $1 per unit.


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