Ardent Leisure, like the recently upgraded Village Roadshow, is in the entertainment business. Its two largest assets are the Dreamworld theme park on the Gold Coast, and a chain of 65 gyms across Australia. Together these divisions generate over 60% of group earnings. It also runs ten-pin bowling alleys, marinas, laser tag arenas, games arcades and rock climbing centres both here and in the US.
This is an collection of average quality businesses worth around six to eight times earnings before interest and tax. The current share price implies a value 50% higher than this range, and doesn’t afford much protection. AVOID.