Coast Entertainment warns of headwinds from inflation and Gold Coast wild weather

Eight years after the Thunder River Rapids ride tragedy, Dreamworld’s owner has flagged its first positive group earnings result, sending shares surging.

The Dreamworld Flyer opened in December, 2023. Picture Glenn Hampson

Dreamworld owner Coast Entertainment has flagged its first positive full year group earnings result since the Thunder River Rapids ride tragedy eight years ago, after navigating cost of living headwinds and adverse weather impacts.

The company, previously known as Ardent Leisure, told the market in a trading updated, that unaudited revenue for the year to June 25 was $87m, up 3.8 per cent on the previous year and 29.6 per cent above the pre-Covid, 2019 financial year.

The upbeat news sent Coast Entertainment shares surging almost nine per cent to close at 49c on Friday.

“With further meaningful savings in the group’s corporate overheads, the group also anticipates reporting its first positive consolidated EBITDA (earnings fore interest, tax, depreciation and amortisation) for the continuing business (excluding specific items) since FY16,” the theme park operator said.

The Theme Parks & Attractions division’s positive EBITDA result should be an improvement on the $4.7m reported a year ago, excluding specific items.

Revenue and earnings took a sharp hit after four Dreamworld park guests were killed on the Thunder River Rapids ride on October 25, 2016.

Coast Entertainment said the group had delivered a resilient performance in the 2024 financial year, despite the high interest and inflationary environment weighing on consumer

spending and the impact of severe storms. The storms caused significant property damage and trading disruption to Dreamworld and WhiteWater World during the peak summer holiday period. To date, the company has received $700,000 in interim insurance payments related to property damage.

Revenue of $43.5m for the six months to June 25, 2024, was 8.3 per cent above the prior corresponding period and matched the revenue recorded in the first half, despite being significantly impacted by wild weather on the Gold Coast.

The aggregate value of ticket sales was again the highest since the 2016 financial year, up 3.1 per cent on the 2023 financial year, and 42.1 per cent above FY19.

“This was driven by increased promotional activity and the launch of several new attractions in December 2023 (such as the Dreamworld Flyer and Wiggles Big Red Boat Coaster), which have resonated well with guests,” the company said.

The new Wiggles Big Red Boat ride. Picture Glenn Hampson

The new attractions have helped propel sales of annual passes to the highest level since FY16, which has resulted in higher levels of repeat visitation albeit at slightly diluted per capita yields. Total visitation has grown by 14.3 per cent over the prior year.

The SkyPoint attraction atop of the Q1 tower on the Gold Coast, which was previously heavily reliant on international business, has continued to trade well, the company said. The 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.

Coast Entertainment held $89.2m cash on hand at the June 25, balance date, and will recommence a share buyback program suspended on June 26.

“Given current economic conditions, the board continues to consider it prudent to maintain a robust balance sheet to provide financial strength and optionality in respect of potential opportunities to grow earnings as they arise,” the company said.

The board will continue to assess funding priorities, liquidity needs and options for further capital management initiatives for remaining cash in light of the Group’s ongoing performance, capital position and prevailing market conditions.”

Coast Entertainment has lodged a Preliminary Development Application with Gold Coast City

Council which, if approved, would allow a broader range of uses for the theme parks and surrounding land owned by the company. A decision is expected in coming months.