PROFIT PARKS: THRILL CONTINUES FOR VILLAGE ROADSHOW

SEP 2010

VILLAGE Roadshow Limited’s (VRL) strongly performing Gold Coast theme parks have contributed more than $44.3 million (46 per cent) to the film production, media and leisure behemoth’s overall net profit of $94.9 million.

The $1.28 billion company’s properties include Warner Bros. Movie World, Seaworld, Wet’n’Wild, Australian Outback Spectacular and Paradise Country – Aussie Farm Tour, but its annual report to shareholders cited Sea World Resort and Water Park as the most improved performer.

Sea World made a splash, helping to boost VRL’s coffers. Now Village is giving back in buckets - and penguins. From where Village Roadshow Theme Parks CEO Tim Fisher sits, it’s money well spent.

“Clearly the Gold Coast is integral to the financial room of Village Roadshow’s theme park division,” he says.

“We have a strategy with all of our projects and that’s our annual pass initiative. On the Gold Coast alone we sold 440,000 in the last 12 months, which is up 88 per cent on last year. Village Theme Parks offer a very good price in the market and we have been able to penetrate regional markets. That’s the reason you are seeing these types of results.”

The overall economic impact by Village Roadshow Theme Parks on the Gold Coast is greater than $1 billion.

“There are a lot of different businesses that benefit greatly from this type of economic engine,” says Fisher.

Sea World Resort contributed 6.1 per cent EBITDA to the consolidation of the water park inside the resort, allowing free access to hotel patrons and the refurbishment of 120 rooms.

Stage two of the resort’s refurbishment program is scheduled to be completed early next year and coincides with the opening of new attractions at the Sea World theme park and Wet’n’Wild.

Warner Bros. Movie World also performed strongly on the back of heavy investment and marketing into the theme park’s special events attractions, while the USA Wet’n’Wild water parks in Phoenix, Arizona, and Oahu, Hawaii, continue to record slight profits in the challenging economic conditions.

“In the US in our industry we have found that during difficult times, people continue to look for escapes. With limited income, our businesses still cope reasonably well particularly mini vacations or stay at home vacations,” says Fisher.

“We opened Phoenix recently and it’s off to a great start. We are always looking for opportunities and will launch four new attractions on the Gold Coast, including Australia’s first upside down waterslide where you travel at 60km/h and hit 2.5 g’s.

“At Sea World we are delivering the multimillion dollar ($6 million) Castaway Bay, the largest interactive play structure in Australia and a splash battle where people can shoot water cannons at other boats.”

Sea World will also unveil its frozen world penguin encounter. The new exhibit will be home to the world’s second largest penguin species, the king penguin which stands almost 1m tall.

From one world to another, Fisher says the company’s Warner Bros. Movie World Studios will be at capacity over the next 12 months, including the production of Hollywood royalty Steven Spielberg’s next sci-fi/adventure series.

The Terra Nova series will shoot 13 one-hour episodes and bring an estimated $54 million in economic activity.

“We are fortunate enough that we have a full slate of productions over the next 12 months,” says Fisher.

“We have just wrapped up the Nadia films and Sanctuary and now we have the Spielberg series. The film industry has been impacted by the high Aussie dollar in the US, it really does impact decision making process. But they also realise that our facilities are fantastic, they’re world class.”

Fisher concedes that a double dip recession in the US is likely, but believes it will not impact on Village’s core theme park businesses.

“It’s concerning but we feel relatively good about our positioning. We’re off to a good start, it’s nice to have a strong first quarter,” he says.

Other Village assets include Sydney Aquarium and Sydney Wildlife World. The company also owns film distribution companies Roadshow Films and Roadshow Entertainment as well as Village Cinemas and radio stations including TripleM and 2Day plus film and music entities. Earlier this year it sold its Greek and Czech Republic businesses for a $25.6 million profit.

VRL has undertaken a capital restructure program and highlights the successful $109.9 million share buyback in the first half while announcing an on-market buy-back and variation of rights proposal.

Executive chairman of four years John Kirby has switched roles with the group’s deputy chairman and younger brother Robert Kirby.

Robert Kirby says the trading result for the group demonstrates the underlying strength of the company’s core operations.

“We continue to focus on delivering what consumers want and not only meet their entertainment expectations, but exceed them,” he says.

“The focus is delivering strong results for the group and demonstrating our commitment to be the best in our industry.”