Ardent half-year results: Dreamworld ‘unlikely to break even’ in next six months

Dreamworld owner Ardent has revealed ambitious plans to transform the park with new rides and attractions after reporting disappointing financial figures.

DREAMWORLD owner Ardent Leisure says the theme park is unlikely to break even for the second half of the financial year despite a strong Christmas trading period.

The Sydney-based company, which released its results this morning for the six months to December 31, said prolonged wet weather, coronavirus, and the potential impact on attendance from the upcoming coroner’s report into the 2016 Dreamworld tragedy was behind its forecast for a poor second half.

However the company, led by chairman Gary Weiss, sounded an upbeat note on the future of the theme park industry.

“Management believe these challenges are temporary and remain focused on successfully executing planned investments and initiatives,” Ardent said in a statement.

Gold Coast kids Jae Chapman, 9, Kyra Sutton, 9 and Alexandra Cotterill, 13 watch in awe of golden girl and ex Olympic hurdler Sally Pearson as she takes on Dreamworld's newest attraction just in time for the school holidays, The Monster. Picture: Nigel Hallett

“Planning is well advanced on projects such as the new multi-launch roller coaster, ticketing and digital marketing system, the refurbishment of the ABC Kids and Wiggles precincts (including a new ride), Future Lab, the site Master Plan and the development of a pipeline of new rides and attractions for installation over the next three to five years.”

Overall the themeparks division, which on the Gold Coast also includes WhiteWater World and SkyPoint, reported revenue of $38.7 million for the first half – 4.9 per cent higher than the prior corresponding period.

“The increase in revenue was driven by a 2.9 per cent uplift in attendance on a like-for-like 26 weeks basis as well as an increase in average per-capita spend,” Ardent said.

“Sky Voyager opened on 23 August 2019 and is currently the most popular attraction at Dreamworld. The transformation of WhiteWater World was also substantially completed prior to Christmas.”

Chief safety engineer for Workplace Health and Safety Michael Chan leaves the inquest into the Dreamworld disaster at the Southport Courthouse on the Gold Coast, Tuesday, November 20, 2018.

Ardent said the “positive trends” from the first half indicate that its turnaround plan is delivering results.

It said on a proforma basis, once costs related to the Dreamworld tragedy were removed as well as other one-off costs, pretax earnings had improved by $2.2 million compared to the prior period.

“Management believes that the planned investments along with a continued focus on operational excellence will unlock pent-up demand for high quality out of home experiences consistent with the worldwide growth in this category.”

Overall Ardent Leisure, which also owns the Main Event entertainment centre business in the US, reported a net loss of $22.5 million, up from $21.8 million in 1H19.

It said that was mainly due to the impact of $7.6 million in incremental costs under new lease accounting standards as well as $10.4 million extra in borrowing costs.

Revenue increased by nine per cent to $263.2 million, partly due to the inclusion of an extra week of trading (with FY20 being a 53-week year).