EVENT Hospitality & Entertainment (ASX: EVT) has delivered strong growth on the back of its hotels business, while EVENT Cinemas has been weighed down by a declining Australian box office.
The listed company behind the QT brand of hotels, Event Cinemas, and the Thredbo Alpine Resort, delivered normalised profits after tax of $124.3 million, up 9.3 per cent.
The total Australian Box Office for the year finished 4.7% below the prior year, and revenue generated by the Event Cinemas division was correspondingly impacted by this fall.
Despite a dwindling box office, CEO Jane Hastings says the company's overall growth over the last financial year demonstrates strength across its suite of businesses including hotels and cinemas in Australia, New Zealand, and Germany.
"The full year results demonstrates the benefit of the group's diverse operating businesses and strong property portfolio," says Hastings.
The group's hotels division saw earnings grow by 31.4 per cent, with its new hotels QT Melbourne, QT Queenstown and Rydges Geelong delivering just over half of this increase.
The company also operates the Thredbo Alpine Resort, which also saw significant growth thanks to the popularity of mountain-biking during the off-peak period.
The group's New Zealand cinema division also performed well, with underlying earnings in this division up 11 per cent from the previous financial year.
"These divisions offset the comparatively weak performances from Entertainment Australia and Germany, both of which traded relatively in line with the markets they operate in," says Hastings.
The company recently completed a strategic review of its businesses, determining that it's German cinema division, CineStar, may be a problem.
"We have formed a solid five year growth direction with a clear capital allocation framework, albeit this plan will evolve as new opportunities arise and market conditions change," says Hastings.
"One element of this strategic review has been the evaluation of the group's German cinema exhibition division, CineStar. CineStar has delivered a good return over the last decade and maintains a consistently strong German market share position, however, it brings no economies of scale to our other cinema businesses. We are therefore exploring options for CineStar, in conjunction with our local investment and development opportunitiesto deliver future sustained growth for shareholders."
As part of its strategic review, EVENT has decided to divest QT Port Douglas and Rydges Gladstone, which has negatively contributed to earnings for several years.
The company has declared a fully franked final dividend of 31 cents per share, bringing the total dividend for the year to 52 cents per share, an increase of 1 cent on the previous year's total dividend.
Shares in EVENT are up 2.09 per cent to $15.16 per share at the close of trading on Thursday.
Business News Australia
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