Ardent Leisure upbeat on future as theme park demand bounces back

The Dreamworld operator says visitation at its theme parks has returned to levels seen prior to Thunder River Rapids incident in 2016 as its promises new rides amid a surge in revenue.

Ardent Leisure is upbeat about the future as it emerges debt free from the sale of its Main Event business and revenue at its Gold Coast theme returns to levels seen prior to the deaths of four people at Dreamworld.

The company has told investors that ticket sales at its core theme parks business are the highest they’ve been since the 2017 financial year when the Thunder River Rapids incident saw demand spiral.

The theme park business, consisting of Dreamworld, WhiteWater World and SkyPoint, reported a 37.3 per cent jump in revenue in FY22 to $49.5m — driven by a large uptake in annual passes by local residents and the rebound in domestic tourism. Revenue per ticket was also 36 per cent higher than before the 2016 incident.

Visitation to its theme parks was up 18.4 per cent from the previous year as admissions per capita at Dreamworld rose 29 per cent on FY17 levels.

Barrenjoey analysts said the 2H22 Theme Park EBITDA loss of $2.8m was well-ahead of its $7m predication as a result of stronger admissions, revenue per admission and cost containment.

Shares in the Ardent Leisure were up 7.1 per cent on the result to $0.60.

Ardent Leisure announced its theme parks and attractions division CEO Greg Yong would also be the group’s new CEO. Mr Yong said that he had never been more confident in the recovery of the business then now.

“The second half was the strongest we’ve seen since FY17, with ticket sales the best we’ve seen since then also,” he said.

“This is despite there being twice the amount of rain affected days than at any other time in the past 20 years and little to no international visitors.”

Despite a rebound in the company’s fortunes, Ardent Leisure opted against providing detailed guidance for FY23 due to “macro-economic” factors and a lack of international tourists, which made up 0.1 per cent of all visitors in FY22.

“International visitation is still well below pre-pandemic levels, and this is having a material impact on non-holiday periods,” Mr Yong said.

Mr Yong said the return of international tourists opened the door for new opportunities to grow revenue including ticket price increases and the type of tickets made available.

The company said that visitation at its theme parks in July were the best since July 2018, building on from numbers seen in the first half of the calendar year.

A strong bounce back theme parks came as Ardent Leisure saw group revenue climb 63.2 per cent to $637.6m in FY22, compared to $390.7m in the previous year. The uplift came on the back of a 59.7 per cent uplift in its Main Event unit in the US, which exceeded pre-Covid levels.

Ardent Leisure completed the $US835m ($1.1bn) sale of Main Event Entertainment in July to David & Busters, which saw $455.7m returned to shareholders via a special 95c dividend.

Despite growing optimism by Ardent Leisure that it had started to turn it fortunes around, the company saw its net loss after tax grow from $86.9m in FY21 to $97.4m in the past financial year due to impact of “significant” one-off expenses attached to the sale of Main Event including foreign exchange and valuation changes.

The theme park business recorded an EBITDA loss off $14.5m compared to $11.1m in the prior.

A $63.7m secured loan provided by the Queensland Government in 2020 for its theme parks division was repaid in full with interest ahead of schedule following the sale of Main Event.