DREAMWORLD LURES MORE VISITORS, BUT THEY'RE A FRUGAL BUNCH

Written on the 19 August 2015 by Nick Nichols

DREAMWORLD LURES MORE VISITORS, BUT THEY'RE A FRUGAL BUNCH

ALMOST 240,000 more visitors passed through the turnstiles at Dreamworld last financial year, but the continuing challenge to get them to spend more has put a cap on the theme park's earnings.

Ardent Leisure (ASX:AAD) today reported what it calls a solid result from its Gold Coast operations, which include Dreamworld, WhiteWater World and SkyPoint at Q1, as total theme park revenue for the group slipped to $99.6 million in the year to June 30, from $100.1 million in FY14.

This is despite combined attendance figures at all three attractions climbing 11.7 per cent to 2.28 million.

Ardent has posted EBITDA of $32 million from its theme parks, down from $32.8 million, although the result again was hampered by heavy rainfall and Cyclone Marcia in the critical third quarter of trading.

Operating margins slipped from 33.8 per cent to 33.3 per cent, while property costs jumped 7.5 per cent to $1.148 million.

However, spending by visitors dropped 11 per cent to $43.64 from $49.04 per head in FY14.

Ardent says China and New Zealand remain its largest international markets and both have recorded strong growth over the year. It expects the weaker Australian dollar to boost international visitor numbers in the current year, along with new twice-weekly Jetstar flights from China to the Gold Coast.

SkyPoint has been the highlight for the group with attendance growth of 40 per cent during the year from pass holders and international markets.

SkyPoint has also jumped in value on Ardent's books, rising from $22.3 million to $26.5 million. Dreamworld and WhiteWater World remained steady at $227.5 million.

Investment in online and digital marketing strategies has seen online sales grow to 38 per cent of total revenue. Ardent says it is investing further in digital technology to gauge the markets it is attracting.

"A change in marketing strategy to ensure targeted media coverage to support the June Pass campaign over May, June and July, along with a more competitive pass offer, has resulted in increased pass sales of 28 per cent and attendance across the division up 9.7 per cent over these three calendar months," says Ardent CEO Deborah Thomas.

She says Dreamworld is also pinning its hopes on a new era of trading from the end of 2017 when the billion-dollar Coomera Town Centre, located immediately to the north of the theme park, is expected to open. Construction of the Westfield-backed centre is yet to start.

While Dreamworld was voted Queensland's Best Major Tourist Attraction and Australia's third most popular tourist attraction in the annual tourism awards, as a percentage of Ardent Leisure's group revenue the Gold Coast theme parks division has dropped from 20 per cent to about 16.5 per cent.

Theme parks accounted for 28 per cent of Ardent's EBITDA in FY14, just behind the Goodlife Health Clubs at 30 per cent. In FY15, this had shrunk to 25 per cent of group EBITDA with Main Event living up to its name by accounting for 35 per cent of the total.

The growth of Main Event bowling division in the US has helped Ardent's group revenue jump 19 per cent to $594.6 million. Main Event has benefitted this past year from the falling Australian dollar.

Ardent's group net profit slumped 34.4 per cent to $32.1 million, due largely to higher depreciation costs.

Ardent is paying a final distribution of 5.5c per stapled security, down from 6.2c in FY14. This brings the full-year payout to 12.5c from 13c previously.


Author: Nick Nichols

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