Gold Coast's theme parks can't catch a break

Gold Coast's theme parks can't catch a break

Australia's theme park hub has experienced a rough start to 2020 just as the sector was showing signs of recovery.

The two companies that run the Gold Coast's theme parks, Ardent Leisure (ASX: ALG) and Village Roadshow (ASX: VRL), have both been impacted by a hot January, a stormy February and a virus outbreak.

For Ardent Leisure, the ongoing and mostly uncontrollable impacts of local flooding, the national bushfire crisis and the coronavirus Covid-19 comes just as it was beginning to get back on its feet after the Dreamworld tragedy of 2016.

In its 1H20 results, posted this morning, Ardent saw its theme park revenue improve by $4.3 million, driven by a 2.9 per cent uplift in attendance.

This rise in visitor numbers is a result of the company launching a new attraction Sky Voyager in August. The ride is now the most popular attraction at its Dreamworld theme park.

The theme park division, which in addition to Dreamworld includes theme parks WhiteWater World and Gold Coast observation deck SkyPoint, has recently overcome the long-lasting effects of a coronial inquest into the tragedy at Dreamworld.

Park attendance was severely impacted after four died tragically on the Thunder River Rapids ride in 2016. The tragedy had a chilling effect on not just Dreamworld, but the Gold Coast theme park sector as a whole.

But Ardent Leisure's efforts to rehabilitate the division have been knocked down once again at the very beginning of 2H20, meaning Dreamworld is unlikely to break even this year.

"Trading during the Christmas holidays was the strongest it has been for many years," says Ardent Leisure.

"However, a prolonged period of severe wet weather, the Coronavirus, and potential impact on attendances from the Coroner's Report means that it is unlikely Dreamworld will break even in 2H20."

"Management believe these challenges are temporary and remain focussed on successfully executing planned investments and initiatives."

Competitor Village Roadshow also posted its 1H20 results today, demonstrating a similar predicted impact in the second half to its own theme parks division.

In 1H20 VRL's theme parks division, which includes Gold Coast theme parks Warner Bros. Movie World, Sea World, Wet'n'Wild, and others, saw improved profitability, ticket sales and attendance growth.

However, the bushfires, two days of closure due to flooding, and the effect of international tourists not visiting its parks will have an EBITDA impact of around $3 million in 2H20.

Overall, Village Roadshow, which also produces and distributes movies, saw its 1H19 profit of $2.4 million turn into a $25.8 million net loss after tax in 1H20.

This loss is largely due to impairments of its assets totalling $39.7 million.

Shares in VRL are down 3.04 per cent to $3.83 per share at 11.50am AEDT, while shares in ALG are down 8.11 per cent to $1.25 per share.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Looking for a credit or charge card that’s built for your business? Try American Express
Partner Content
A good credit card should work for you, not against you, and let you and your business ...
American Express
Advertisement

Related Stories

Devine abandons Alba to upsize at Burleigh Heads with $400m Burly tower

Devine abandons Alba to upsize at Burleigh Heads with $400m Burly tower

In a sign that the heat has yet to come out of the Gold Coast prope...

Mandatory COVID isolation to end nationally mid-October

Mandatory COVID isolation to end nationally mid-October

National Cabinet has today determined that mandatory isolation peri...

Sunset on the horizon in 2023 for developer Sunland

Sunset on the horizon in 2023 for developer Sunland

A developer behind some of the Gold Coast's most iconic buildin...

Study finds cybersecurity skills gaps on boards as Optus debacle rolls on

Study finds cybersecurity skills gaps on boards as Optus debacle rolls on

As the backlash continues over a data breach at Optus that has pote...