'Rotten couple of years': Village Roadshow CEO says turnaround has begun

Village Roadshow chief executive Graham Burke says a bitter feud within the cinema and theme parks operator's founding family is resolved and strong results for the 2019 financial year are "just the beginning".

The MovieWorld owner's net profit after tax excluding material items was $20.6 million, compared to a $7.3 million loss in 2018. When including discontinued operations and material items Village posted a $6.6 million loss compared to a $0.2 million profit in 2018.

Village Roadshow chief executive Graham Burke.Credit: Peter Rae

Earnings (before interest, tax, depreciation and amortisation) increased 37 per cent from $90.9 million to $124.9 million, with the overall net debt to earnings ratio dropping from 3.73 to 1.76.

Village also revealed on Thursday it had agreed to sell promotions agency Edge Loyalty Systems for $32.3 million to Blackhawk Network.

The results come after John Kirby, the older of two brothers who run the cinema and theme parks business founded by father Roc Kirby, supported by former Rothschild boss David Kingston, last year pushed for a sell-off of the film production business and the removal of Mr Burke from his role.

The feud between Mr Kirby, his older brother and Mr Burke came after a three-year share price slide that cut $500 million off the company's market value. The Kirby family and Mr Burke are major shareholders.

Mr Burke has since announced he will step down at the end of the year and be replaced by executive chairman Robert Kirby's son Clark Kirby. Robert Kirby will also step down from his role with an independent chairman to be put in the role.

Former Foxtel chief executive Peter Tonagh joined the Village board in July as a non-executive director.

"The noise that we had earlier in the year... I've been focused on running the business but the major issues are over. We've been through a rotten couple of years, but the stars are aligning for us," Mr Burke said.

One of the factors he has blamed for the company's recent financial woes was the Thunder River Rapids Ride malfunction in rival Dreamworld in 2016 that left four people dead and hit attendance at all theme parks.

"The Dreamworld tragedy has virtually worn off," Mr Burke said.

He was also confident of a strong result even in a difficult economic environment saying that "ups and downs in the economy haven't affected theme parks historically".

"Our experience with theme parks is that we win either way. If the economy is strong people have money and they're going to go out. If it's weak they want to forget their worries," he said.

Mr Kingston said the results were a "solid improvement" and "good to see [the] asset sale and dividend".

He added the next step he considered important was the appointment of an independent chairman.

Village Roadshow's share price increased 16.5 per cent to $2.82.  A 5c fully franked dividend will be paid on 11 October.