Commonwealth Games rain on theme park figures
Theme park operator Village Roadshow has downgraded its earnings forecasts after weak visitor numbers were compounded by a wet March and competition from the Gold Coast Commonwealth Games.
Village Roadshow’s Gold Coast parks are yet to recover from the 2016 fatal accident at Ardent Leisure’s Dreamworld, which brought the safety of amusement rides into question.
In a trading update released yesterday, Village Roadshow says it expects full-year net profit to be within the range of a $10 million loss to break-even.
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In February, the company was forecasting a loss in the range of $12 million to $17 million.
The update says Village Roadshow theme parks were affected by low attendance during the Commonwealth Games, and wet weather in the preceding month.
But it was hopeful the “outstanding success of the Games” would see the parks benefit in the longer term from the highly visible media coverage generating tourism growth for the region.
Ord Minnett senior research analyst John O’Shea says it was not unusual for a major event like the Commonwealth Games to have an impact on local attractions.
“By the sound of the trading update, it was very, very quiet (at the theme parks) and I understand the Gold Coast had 21 days of rain in March,” O’Shea says.
“It certainly seems to have knocked them around.”
On the back of the announcement, shares in Village Roadshow fell 12% to a six-year low of $2.77.
“Shareholders and investors will be looking for improvement in the theme parks over time. That’s a key thing they’ll be focused on,” O’Shea says.
Village Roadshow says it considered a new ticket price strategy for the theme park division would deliver profit growth but the impact could not be fully assessed until after the key annual pass renewal period for May-June.
This article originally appeared on www.theaustralian.com.au/property.
