It’s been coming for months, and on Thursday Village Roadshow put us all out of our misery (well its shareholders) by finally revealing the bottom line for what was a rotten year in 2016-17 – a $66.7 million loss against what was a weak $15.7 million profit a year earlier. And the problems and losses for the company (which include quitting Hollywood film financing) means there’s no dividend for shareholders.
That’s after the company paid a 28 cents a share to shareholders in 2015-16 (an interim and final of 14 cents each).
Driving this was a collection of one offs, with the biggest the foreshadowed write down in the value of its Wet’n’Wild theme park in western Sydney because it cost too much to build.
But that wasn’t the headline story – that was the way the company’s southeast Queensland theme parks were hammered in the wash up of the terrible Dreamworld disaster last October.
Tourists and ordinary consumers shied away from theme parks and fun rides etc in the wake of the Dreamworld disaster which saw four people killed.
While the greatest impact of that deaths was felt on Dreamworld’s owner, Ardent Leisure where it caused losses, a profit drop, board and management changes. But the fallout hit Village almost as hard in some respects.
Village Roadshow’s competing Warner Bros. Movie World, Sea World and Wet’n’Wild parks on the Gold Coast parks lost thousands of customers in the aftermath profits at Village Roadshow’s Gold Coast parks plunged from $28 million to just $200,000.
The theme parks division result went from a profit of $23 million in 2015-16 to a loss of $9 million.
Village said the impact was on theme parks was felt as far a way as Melbourne’s Luna Park.
While its Gold Coast parks suffered a $5 million impairment charge, the $55 million charge for Wet’n’Wild Sydney was the biggest single factor in the company’s overall loss and driven by the overspend.
But for Village there were two more hits – the weak movie market for much of 2016-17 (which is also being felt in the US, especially the current summer season where there has been a sharp drop in ticket sales, revenues and profits) and weak distribution as a result.
Village said profits in its 83 (in Australia) cinema business fell to $55 million from $62 million, and in film distribution fell to $14 million from $17 million. Judging by what is happening in the US, the two divisions face a tough time in the currnet six months, and perhaps all year if there isn’t a big hit or three from Hollywood for our summer season.
The shares fell 1.8% to $3.79.
