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Village Roadshow swings back to H1 profit

Petrina Berry  |  16 Feb 2018Text size  Decrease  Increase  |  
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BRISBANE - [AAP] Village Roadshow (ASX: VRL) has swung back to profit in the first half following its exit from the Singapore cinema business and has flagged a second-half lift in earnings at its struggling theme parks.

The firm bounced back from a loss in the prior corresponding period with a $171.9 million profit for the six months to December 31, largely due to the sale of its 50 per cent stake in Golden Village Singapore cinemas.

Earnings from its theme parks fell 22.6 per cent as Village Roadshow continued to struggle with lower attendances following 2016's fatal disaster at rival Dreamworld.

But its shares were up 4.2 per cent at $3.22 by 1330 AEDT after it flagged a "significant recovery" in the second half at its Gold Coast attractions, including Sea World and Warner Bros. Movie World.

The company said its new ticketing and marketing strategy and new attractions has resulted in "a sizeable uplift in the customer feedback, in-park spend and ticket yield" at its amusement parks.

January trade was strong with ticket yield up 30 per cent and admission revenue up 24 per cent on a year ago, it added.

"It is expected that the division will deliver a full-year EBITDA (earnings before interest, tax, depreciation and amortisation) above the previous year," the company's statement to the ASX said.

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"The extent of the uplift will largely depend on May and June ticket sales."

It also said its cinema division, which was hit by the timing of blockbusters in the first half, would have a better second half because of an unprecedented number of blockbusters in the last quarter.

The company will finish the year on a strong note with four blockbusters in the last quarter: The Avengers, Solo: A Star Wars Story, Deadpool 2, and Jurassic World: Fallen Kingdom.

Village Roadshow said it will reduce operating costs and maximise earnings from its film distribution division following a revision of its business model.

Stripping out the impact of the $154 million sale of its Singapore stake and other one-offs, EBITDA was $49.8 million, down from $78.4 million in the prior corresponding period.

The company plans to achieve cost savings of about $2.5 million for the film distribution business over the next financial year.

It has also forecast full-year net profit for the current financial year in the range of $12 million to $17 million.

VILLAGE ROADSHOW RETURNS TO H1 PROFIT

* Net profit of $171.9m v $6.7m loss

* Revenue down 5pc to $515.2m

* Other income $169.3m v $15.9m

* No interim dividend, unchanged

 

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is an AAP journalist.

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

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