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Ardent earnings to exceed guidance

Trevor Chappell  |  11 Aug 2017Text size  Decrease  Increase  |  

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MELBOURNE - [AAP] Theme parks and entertainment company Ardent Leisure (ASX: AAD) expects to report full-year earnings ahead of its guidance but admits it can do better.

Ardent expects core earnings before interest, tax, depreciation, and amortisation (EBITDA) of $76 million when it releases its annual financial results on August 31, slightly ahead of its guidance range of $73 million to $75 million.

But last year's Dreamworld theme park closure for 45 days following a fatal accident in October would likely drag revenue down nearly 15 per cent to $586 million.

Ardent says the lift in earnings was driven by a better-than-expected finish to the year by its US-based Main Event business.

Main Event grew revenue by 30 per cent to $US226.2 million ($4.5 million) as new centres were opened, but despite the revenue increase, earnings lifted only 5.6 per cent and margins fell.

Ardent's theme parks operations suffered a 34 per cent fall in revenue to $70.9 million, reflecting the Dreamworld closure and lower visitation levels after it re-opened.

Ardent says the recovery of Dreamworld is likely to take two years.

Revenue for Ardent's bowling and entertainment centres in Australia was down 2.2 per cent at $127.7 million, impacted by the closure of Kingpin Crown for renovation.

Ardent chief executive Simon Kelly says Main Event's results were disappointing, and Dreamworld had faced very challenging trading since re-opening but was on the path to recovery.

"From my relatively early days in the business, it is clear that there are many opportunities for us to do better," Mr Kelly said in a statement on Friday.

"We are firmly focused on these opportunities which will deliver significant value upside for our security-holders."

Ardent said that, in future, cash flows from Main Event would be directed towards reinvestment in growth while cash generated by Dreamworld would be mainly directed towards distributions.

Shares on Ardent Leisure were 1 cent, or 0.5 per cent, lower at $2.02 at 1012 AEST.


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