Ardent Leisure hits the ground running in FY23 with a new CEO and a ‘dream’ focus

Gold Coast theme park operator Ardent Leisure (ASX: ALG) has entered FY23 with a fresh focus and a new CEO after the company sold out of its Main Event bowling centres business in the US in June.

The company, which today announced higher revenues but lower net earnings for FY22, has named its theme parks CEO Greg Yong as group CEO in a move that aligns with Ardent Leisure’s sole business assets, namely the Dreamworld and WhiteWater World theme parks on the Gold Coast.

“Following the divestment of our Main Event business in June, the board reviewed Ardent’s management structure and believes it is appropriate that Greg assumes overall management responsibility for group activities,” says Ardent Leisure chairman Dr Gary Weiss.

“Since being appointed as theme parks and attractions CEO in April 2021, Greg has shown outstanding leadership and is highly regarded by the board and all of the team members he leads.”

News of the appointment accompanied Ardent Leisure’s FY22 results, which have revealed surging revenue for the Main Events business which was sold to American restaurant and entertainment group Dave & Buster’s for US$835 million (AUD$1.2 billion).

Main Event, which has a portfolio of 51 bowling centres in the US, lifted revenue by 63.2 per cent to $637.6 million in FY22, pushing the figure well above the pre-pandemic total of $483.3 million as the group opened four new centres during the year. Main Event reported EBITDA, excluding specific Items, of US$106.5 million ($153.24 million) for the year, an increase of 174.7 per cent.

While its Gold Coast theme park business, which also includes the SkyPoint Observation Deck and SkyPoint Climb on the Q1 building, reported a 37.3 per cent increase in revenue, underlying earnings appear weaker as the EBITDA figure blew out to a $14.5 million loss from an $11.1 million loss a year earlier.

However, the previous year’s total was aided by $10.5 million in hardship payments, largely from JobKeeper. Excluding this benefit, and accounting for $2 million received in the form of a Major Tourism Experiences Hardship Grant in FY22, the EBITDA result for FY22 is a 23 per cent improvement on the previous year.

Theme-park revenue was bolstered by higher ticket prices and an 18.4 per cent increase in visitor numbers during the year.

“Whilst the Theme Parks and Attractions business continued to be impacted by the prolonged border closures due to the pandemic during the first half of FY22, the successful launch of the Steel Taipan rollercoaster in December 2021 and pick-up in demand in both local and interstate markets during the second half of FY22 have seen the business achieve some of its best trading results in recent years,” says Weiss.

“We believe the business is well positioned to benefit from further potential upside in the tourism sector, particularly from international visitors, and therefore the positive momentum experienced recently should continue into FY23.”

Overall, Ardent Leisure’s group result saw its net loss after tax widen to $97.4 million for the year, up from $86.9 million in FY21, with the result largely impacted by one-off expenses related to the Main Event sale.

Weiss says the sale of Main Event has placed the group in a ‘solid financial position, with all debt being repaid and significant cash being retained to recover, grow and develop the Theme Parks and Attractions business’.

“The group now has the financial ability and capacity to ensure that the recovery program that we have overseen in our Australian business is given every opportunity to succeed,” he says.

Unaudited July figures reveal that the Gold Coast theme parks are tracking at their highest EBITDA level since July 2018.

“Excluding the impact of COVID-19 associated cost reductions and government support, Dreamworld ticket sales, in park revenues, and per capita spend were the highest seen since FY17 while the underlying EBITDA loss was the lowest for the same period,” says Yong.

“We note that international visitation is still well below pre-pandemic levels, and this is having a material impact on non-holiday periods whilst the macro-economic outlook remains uncertain. Despite these factors, the business is well positioned with a strong, unencumbered balance sheet, fully owned land holdings and a pipeline of exciting new attractions set to be announced over the next six months.”

Ardent Leisure retains significant land holdings adjacent to Dreamworld in the booming northern Gold Coast suburb of Coomera, with the group announcing earlier this year plans to develop a $75 million resort on part of the land.