Gold Coast theme parks pulled a profit for Village Roadshow Ltd in half-year FY2019 results

Village Roadshow’s Gold Coast Theme Parks helped its listed parent company eke out a profit for the first half of the financial year.

Sea World's latest Gold Coast attraction the "Sky Flyer" a 33 metre swing giving guests breathtaking views of the park and the Broadwater. Photo: Supplied

VILLAGE Roadshow’s Gold Coast Theme Parks helped its listed parent company eke out a $2.4 million net profit for the first half of the financial year.

The group’s earnings of $65 million were up 31 per cent compared to the same time last year, with the company saying record January trade was likely to see full-year results strong enough to deliver shareholders their first dividend since 2016.

Revenue from ticket sales at the group’s Gold Coast parks, which include Sea World, Movie World, Wet n Wild, was up 27 per cent on the same time last year, thanks largely to two ticket increases as visitors started to return to them after slump caused by the tragedy at rival park Dreamworld.

Village’s share price has fallen from $7.95 in June 2014 to $3.23 at close yesterday but had risen 2.8 per cent to $3.32 by 10.30am today.

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Dolphins performing tricks at Sea World on the Gold Coast.

The company’s net profit was well down on the $171.9 million previous comparable period, during which the company sold major assets including its Sydney Wet n Wild theme park.

The company said it had improved the quality of its food and online offerings, and enhanced its in-park attractions, including the DC Rivals HyperCoaster, Sea Jellies Illuminated, Shaun the Sheep, the reimagined Scooby Doo Next Generation Spooky Coaster and Aquaman — The Exhibition.

Despite strong attendance, the group’s Gold Coast Topgolf attraction is expected to deliver below expectations, with Village saying it was on track for full-year net earnings result around $5 million.

The Theme Parks division earnings rose 36 per cent to $39.7 million, up from $29.2 million in the prior corresponding period.

The company said it was on track to deliver annualised cost savings of $10 million or more across its corporate division and had reduced its debt.

It did not provide a profit guidance for the full financial year.

Warner Bros. Movie World on the Gold Coast, as seen from the DC Rivals Hypercoaster. Picture: Jerad Williams

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“To achieve maximum free cash flow, the company continues to adopt a strictly controlled

approach to capital expenditure with budgeted full year capex of approximately $50 million,

substantially lower than prior years,” the company said.

Village Roadshow CEO Graham Burke, whose retirement was announced alongside the results this morning, said the results showed a turnaround was under way.

“With a dedicated team and a clear strategy, we continue to ‘right the ship’,” he said in a statement to the ASX.

“Theme Parks are realising the rewards of an 18-month turnaround strategy.

“Cinema Exhibition recorded its second best first-half industry box office result.

“Roadshow is proactively managing the transition to a digital universe.

“The team is focused on delivery and we will not be distracted from the task at hand.”

VRL Executive Chairman Robert Kirby said there was still work to do.

“In the second half, investors can expect the same disciplined approach to capital expenditure and costs, and a continued commitment to driving operational performance — because we are building an even stronger entertainment business for the future,” he said.

Village Roadshow’s earnings from physical titles in its DVD and Blu-Ray business were down 46 per cent, while its digital revenues have increased 33 per cent and now almost equal its physical sales. The company distributes movies and TV programs for sale and rent via iTunes, Foxtel, Telstra Bigpond and other online platforms, as well as supplying and licensing films to the Foxtel movie channels, Stan and Netflix.