Village Roadshow legacy CEO Graham Burke to retire amid feud reports
Written on the 22 February 2019 by Paris Faint
Graham Burke has announced that he will retire from the top job at Village Roadshow (ASX: VRL) after having spent more than 30 years as its inaugural CEO.
Burke first joined Village Roadshow at age 14 as a ticket collector and floor sweeper before becoming managing director of Village Drive-In Limited at 23.
When Village Roadshow listed on the stock exchange in 1988, Burke became its first CEO.
His decision to finally step down follows reports of a stoush between former Village Roadshow executive John Kirby and his brother, Village Roadshow chairman Robert Kirby, who are locked in a feud concerning the company's future.
The Kirby brothers together with Burke own a 42 per cent shareholding of Village Roadshow, the company which was founded by their father Roc Kirby.
The Sydney Morning Herald reported last week that John Kirby has been pushing for new leadership and direction at Village Roadshow while Robert Kirby remains opposed to the changes, according to board sources.
The family altercation is also reportedly focused on whether the company will sell off underperforming divisions of the business.
At the half, Village Roadshow's film distribution arm contributed only $8.2 million in EBITDA, falling from $9.9 million in the previous corresponding period.
In today's results announcement Village Roadshow said it was attempting to combat the "Netflix effect" which is causing this division to suffer, and its success will rely heavily on the performance of several upcoming releases.
"Distribution has ever been a "hit" driven business and FY19 will depend on the success of titles The Lego movie 2: The Second Part and Shazam! And independent films Five Feet Apart, Poms and Hell Boy," said the company.
Its marketing solutions division has also had a rocky start to the year, delivering an EBITDA of $1.9 million down from $3.6 million in 1H18.
It's not all bad news as Village Roadshow's (ASX: VRL) theme parks division is making progress on the road to recovery, beginning to reap benefits from a new marketing strategy which was implemented in the wake of the Dreamworld tragedy.
This 18-month "market differentiation" scheme appears to have paid off as theme park earnings increased from $29.2 million in 1H18 to a current result of $39.7 million.
While more than $500 million has reportedly been whittled from Village Roadshow's market cap since 2014, outgoing CEO Burke commented that company is beginning to 'right the ship'.
"Our first half result provides clear evidence that the turnaround is underway," he said.
"The team is focused on delivery and we will not be distracted from the task at hand."
Robert Kirby also remains cautiously optimistic.
"We have made real progress but the job is not done," said the chairman.
"In the second half, investors can expect the same disciplined approach to capital expenditure and costs, and a continued commitment to driving operational performance because we are building an even stronger entertainment business for the future."
Robert Kirby's son Clark Kirby, who is currently chairman and CEO of Village Roadshow's theme parks division, will be an internal candidate for Burke's former role.
At the time of writing (11:31am AEST), VRL shares are up 3.4 per cent to trade at $3.34.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Paris Faint