Losses continue for Dreamworld owner’s theme parks
The owner of Queensland theme park Dreamworld, the ailing listed Ardent Leisure Group, today posted another downbeat trading update, saying the theme park division will lose up to $4 million this year.
Ardent expects its theme park division to report an earnings before interest, tax, depreciation and amortisation loss of approximately $2m to $4m in this financial year with the news driving its shares down 3.3 per cent to $2.04 in early morning trade.
Ardent said that during March and April its theme parks visitation had plunged by 36.7% and unaudited revenues were just $9.6 million, a 38.9% drop on last year.
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The company, where Deborah Thomas is still at the helm ahead of the arrival of Simon Kelly as chief executive, has also reviewed historical visitation figures for the theme parks unit and determined it “is appropriate to correct and restate visitation recovery previously provided” for
December, January and February. The company’s revenue remains as previously stated.
Ardent partly blamed poor weather for the park’s poor performance, saying the Gold Coast experienced a significant increase in total rainfall in March, particularly on weekends.
The company was also hit by the Queensland floods, saying that visitation and revenue “was negatively impacted” on the Easter long weekend and school holidays in April as customers cancelled or put off their travel plans due to the floods and damage caused by the cyclones that slammed into the state in late March.
Ardent says it is trying to arrest the slide by investing in key areas to support the recovery of the parks. It has been forced to issue discounted ticket pricing at Dreamworld, that it says is “negatively impacting revenue”, which the company adds it “expects will continue through to at least the end of the current financial year”.
The company has also been hit by increases in fixed operating expenditure, primarily related to greater employee headcount to support attractions maintenance and development.
It is also spending more on marketing and advertising, although Ardent expects this will reduce over time. The company also expects higher spending on “variable entertainment costs”, aimed at offsetting the impact on customer experience from the closure of two rides, to reduce over time.
This article originally appeared on www.theaustralian.com.au/property.
