Dreamworld owner reports improved ticket sales despite severe peak season storms

The owner of Gold Coast theme parks Dreamworld and WhiteWater World has reported a 3.1 per cent lift in ticket sales in FY24 despite severe storms that caused damages and disrupted trading in the peak Christmas-New Year's holiday period.

Coast Entertainment Holdings (ASX: CEH), formerly known as Ardent Leisure, also revealed in its unaudited trading performance update that earnings would likely be higher than the $4.7 million EBITDA reported in FY23.

The group reports the value of ticket sales was up 42.1 per cent on FY19 pre-COVID levels, representing the highest sales since FY16 - a tragic marker for the trading period that preceded a malfunction of the Thunder River Rapids Ride that took the lives of four people.

Coast Entertainment attributes the sales increase to increased promotional activity and the launch of several new attractions in December 2023, including the Kenny & Belinda’s Dreamland precinct, Dreamworld Flyer and Wiggles Big Red Boat Coaster.

Prior to the storms the company had seen a 22.9 per cent jump in visitation for the two parks in December. The weather event caused widespread damage across the region including blackouts for several weeks in some areas, leading Dreamworld and WhiteWater World to close for three and five days respectively, including Christmas Day and New Year's Day.

To date the group has received around $700,000 in interim insurance payments relating to property damage, and progressing compensation claims with its insurers for both property damage and the loss of earnings.

Due to the effects of inflation, the increased sales are not actually higher in real economic terms. Unaudited revenue for the group is expected to be up 3.8 per cent at $87 million, which is still considerable given in the prior year it had benefited to the tune of $2.6 million from Queensland Government COVID stimulus promotions.

Despite the summer storms that significantly impacted results, unaudited revenue in the June half was up 8.3 per cent at $43.5 million.

Due to the shift in sales mix towards more annual passes, deferred revenue at 25 June 2024 of $12.1 million was 12 per cent higher than the previous year.

But Coast Entertainment is about more than just these two theme parks, and also includes the SkyPoint observation deck atop the Q1 building in Surfers Paradise, with dining and function offerings as well as a climb experience.

Acquired by the group in 2009 for $13.3 million before it built the SkyPoint Climb a couple of years later, the asset has a much higher rating on the Global Review Index than Dreamworld and WhiteWater World, and was recently given an independent fair value of $37 million.

Coast Entertainment reports that SkyPoint, which was previously heavily reliant on international business, has continued to trade well.

"Ongoing focus on driving attendance and yield in local and interstate markets, along with a gradual recovery in international visitation, has resulted in revenue and EBITDA performance being the best on record."

The group also highlights "meaningful" savings in its corporate overheads, which should help it achieve its first positive consolidated EBITDA for the continuing businesses since FY16.

At the time of publication this morning, CEH shares are up 6.67 per cent at $0.48, which is 15 per cent higher than levels traded in the aftermath of the summer storms.