CHINESE SEND DREAMWORLD'S NUMBERS SPINNING

Written on the 24 August 2016 by Nick Nichols

CHINESE SEND DREAMWORLD'S NUMBERS SPINNING THE rising tide of Chinese tourists has bolstered Dreamworld's profit result over the past year, as the Gold Coast theme park owner Ardent Leisure (ASX:AAD) posted a 32 per cent rise in group net profit to $42.3 million.

The group profit was driven by a 16.3 per cent lift in revenue to $664.6 million.

Dreamworld contributed $107.5 million to the revenue total, with EBITDA (earnings before interest, tax, depreciation and amortisation) rising 8.4 per cent to $34.7 million.

Growth in Ardent's theme park division benefited from a jump of more than 280,000 visitors to Dreamworld, WhiteWater World and Sky Point at Q1.

This represents a 13.2 per cent lift in visitor numbers to 2.4 million during the year, with the growth in Chinese tourists running at almost three times this pace, or 36 per cent.

Ardent has revealed that Sky Point in particular saw string growth helping revenue climb above $10 million for the first time.

"The business improvement initiatives we implemented over the year as part of our turnaround strategy for theme parks has produced strong results," says Ardent Leisure CEO Deborah Thomas.

The company reported revenue growth across all of its divisions with the bowling business boosting EBITDA by 30.3 per cent and the US-based Main Events family entertainment centres delivering EBITDA growth of 18.7 per cent in US dollar terms.

Ardent is selling the d'Albora Marinas division and the group says credible buyers are running the ruler over the assets.

Last week, Ardent also announced it was selling its health club business for $260 million with proceeds from the sales used to expand Main Event operations in the US.

Ardent has also indicated that some of the proceeds will be used to enhance the offering of its Gold Coast theme parks.

"The (profit) result supports the board's decision to continue prioritising investment in our highgrowth, highreturning Main Event business, and implement strategies to improve the performance of our Australian divisions," says Ardent chairman Neil Balnaves.

"The recently announced sale of our noncore health club division underlines the board's commitment to consolidate the group's position as Australia's leading international entertainment business.

"Repositioning our portfolio in this way significantly strengthens the group balance sheet, provides capacity to support our fiveyear, targeted rollout of Main Event centres, and gives us the flexibility to pursue disciplined investment in theme parks and bowling that meet our return hurdles."

While Main Event remains Ardent's prime area of business growth over the next few years, the company says the outlook for the theme park division on the Gold Coast remains positive due to strong tourist numbers, greater airline capacity to the Gold Coast and the general promotion of the 2018 Commonwealth Games.

The company says the growth also will be driven by new attractions in 2016, including the upgraded Tiger Island due to open next month and Australia's largest LEGO-certified retail store to open in November.

Ardent Leisure is making a final distribution of 5.5c per stapled security, for a full-year payout of 12.5c, steady with last year.

The company's stapled securities closed 14 per cent higher at $2.85 on volume of 8.9 million.


Author: Nick Nichols

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