Written on the 26 October 2016


SHAREHOLDERS have urged Ardent Leisure (ASX:AAD) to 'meet and exceed community expectations' following the deaths of four people at its Dreamworld theme park.

The company had no choice but to go ahead with its pre-scheduled AGM today, just two days after Kate Goodchild, her brother Luke Dorsett and his partner Roozbeh Araghi were killed alongside 42-year-old Cindy Low when the Thunder River Rapids ride malfunctioned.

Ardent Leisure CEO Deborah Thomas and retiring non-executive chairman, Neil Balnaves, offered their condolences to the families and were reluctant to talk material matters when they addressed shareholders today.

"This is a tragedy of a proportion we have never seen before - 33 million people have walked through that gate and we have never seen a tragedy like this," says Balnaves.

"The financial impact has occupied the thinking of the board over the past 48 hours, but not as much as the grief the death of those four people is occupying."

After being urged by one shareholder to 'compassionately and generously deal with the issues', Balnaves replied that it has been difficult for the board to proceed with the families.

"The families are going through enormous grief. The board has written to them offering any support required."

Balnaves and Thomas briefly addressed the financial impact of the tragedy. Thomas' bonus of $843,000 was approved by the shareholders at the AGM.

"As of 25 October 2016, approximately 34 per cent of total revenue generated by Theme Parks in FY16 has already been earned in FY17," says Thomas.

"However, revenue lost as a result of this tragic event will have a significant impact on EBITDA for the remainder of the year, due to the high level of fixed costs required to operate the business.

"It is not possible for me to provide any further guidance at this time, however we will provide regular updates to the market with our trading figures during the next eight months to ensure that the market is fully informed."

Ardent receives around 34 per cent of its revenue from its theme parks buisness, which includes Dreamworld and the Skypoint attractions on the Gold Coast. Stockbroker Morgans is forecasting theme park revenue to fall by 20 per cent and EBIT by 33 per cent in FY17 due to the incident.

Ardent Leisure, which is cooperating with a coronial inquiry, has faced allegations in the media about the safety culture at Dreamworld. Already, the Australian Workers' Union has made a series of claims, including that workers were subject to a culture of 'fear and intimidation'.

Witnesses have come forward with reports about the sequence of events on the day, saying that the ride had spent a period of time offline before the incident.

DRA Safety Specialists has been conducting safety audits for Dreamworld for six years and in a statement, managing director David Randall says, "Dreamworld, under the leadership of Craig Davidson, the CEO, has demonstrated a commitment to developing and maintaining a strong safety culture across all departments".

Investigations into the incident will continue for months. At their conclusion, Ardent Leisure could face millions of dollars worth of fines and compensation to the victims and its directors could face jail if they are found personally liable.

Despite his scheduled retirement, Balnaves says he will stay in contact with the company in a consulting role as it deals with the tragedy.

"If there is any way I can help the board, the company and families, with what is just a devastating tragedy and a lot of problems for all of us deal with, I will. I'm not going to depart the company and leave it, I will remain in touch and available," he says.

Ardent has recovered some of the losses it sustained on the ASX over the past few days. Today, it is trading up 7.25 per cent at $2.145 per share.

The park remains closed indefinitely as police continue their investigations. Ardent will make a further announcement on Monday about when Dreamworld will resume business.







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