Village Roadshow shares plunge after earnings drop
Written on the 30 January 2018 by David Simmons
Entertainment group Village Roadshow (ASX: VRL) has seen its shares plummet more than 10 per cent after the group flagged its first half results will be "substantially below" the previous first half.
The group, which operates theme parks on the Gold Coast and Sydney, says conditions in the theme park sector are challenging.
Village Roadshow blamed the tragedy at rival amusement park Dreamworld in 2016 for a significant dent in its visitor numbers.
In November 2017, Village Roadshow said the drop in visitor numbers was 5.4 per cent behind 2016, but expected it to pick up over the summer trading period.
Chairman Robert Kirby said at the time that the effect of the Dreamworld accident impacted amusement parks around Australia.
"Although not in one of our theme parks, the unprecedented publicity around the tragedy resulted in broad based community concerns about safety of rides, dramatically impacting the earnings of our Australian theme parks," said Kirby.
A slow schedule of new movie releases is also to blame for the earnings drop, which has impacted cinema attendances in Australia.
The group says its cinema sector will pick up thanks to releases of most major blockbuster films on its books happening during the second half.
Shares are down 10.22 per cent to $3.69 at 11.52am AEDT.
During the first half of the 2017 financial year the company made a $6.7 million loss, with revenue of $545 million.
The company is set to release its 2018 first half results on February 16.
The company was slightly more upbeat about its full year estimations, saying it has seen an improvement in ticket sales in January at its theme parks, and its cinema business is expected to recover in the second half.
Village Roadshow also announced it has realised a substantial profit of about $150 million from the sale of its Singapore Exhibition business in October 2017.
The company says its full-year net profit will be in the range of $12 million to $17 million. Last year's full-year statutory loss was $66.7 million.
Business News Australia
Author: David Simmons