Shares in Village Roadshow edged higher yesterday on very small volume after shareholders were told at Friday’s annual meeting they will have to wait for nearly a year before they find out when the company will resume paying dividends.
Chairman Robert Kirby said the board was “confident of being able to recommend a return to dividends before the end of FY18”, adding that the timing and level of any payout would depend on the actual trading results.
“Outside these unpredictable circumstances of the past 12 months, our long-term policy is to pay strong dividend,” Mr Kirby said.
The shares rose 1.1% to $3.70 yesterday which wasn’t bad given the flat performance for the ASX. Certainly a trading update from its Gold Coast theme parks didn’t help confidence with the meeting they are still experiencing low visitor numbers a year after the fatal accident at rival theme park Dreamworld, but expects to start paying dividends again this financial year.
The company Gold Coast theme park attendance to October 31 was 5.4% behind the prior corresponding period, which was largely before four people were killed when a Dreamworld ride malfunctioned.
But it expects to see a pickup in attendance during the Christmas – New Year summer holiday period and directors told the meeting they are looking for the theme parks division to deliver a “substantial improvement” in 2018 full-year earnings, compared to 2016-17.
But theme parks are not the only headache the company is encountering. It has also been impacted by the weak performance from its cinema exhibition division’s performance which has been significantly below the same period last year, due to decline in the number of people going to the cinema and an underperformance in a number of films (an industry wide experience here and around the world – the US has seen a 25% fall in cinema going attendances).
But Village expects this to improve from January onwards with a stronger selection of films, including Star Wars: The Last Jedi, The Greatest Showman, Solo: A Star Wars Story and Deadpool 2, schedule to come out.
But on top of this weak performance Village warned its film distribution division this year is not expected to perform as well as last year.
Chairman Kirby said 2017 had been the toughest trading year on record for Village Roadshow following the impact of the Dreamworld fatal accident and worldwide box office angst.
“However, we remain confident the tide is turning and our divisions are poised to return to their previous profitability,” Mr Kirby told the meeting.
He said the recent $165 million sale of the Singapore cinema business, along with the sale and long-term leaseback of the 154 hectare land package at Oxenford on the Gold Coast, would help repair the company’s balance sheet and gearing.
The Oxenford land, if sold, would be leased for 30 years, with the company also outlining six 10-year options, meaning a total leasing period of 90 years. Mr Kirby, itold the meeting the company in “exclusive negotiations with a preferred bidder”.
