Village Roadshow: Result 2015
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Like the Soviets trying to explain decades of poor harvests, Village Roadshow's management has regularly blamed the weather when discussing the performance of its Theme Park division.
Unlike the Soviets, however, management was more than justified in doing so this year, with Village's Wet'n'Wild Sydney suffering from the city's worst summer rainfall in 50 years. Things weren't much better on the Gold Coast. As a result, Theme Park earnings before interest and tax (EBIT) declined 14%, to $44m.
Assuming rainfall levels return to 'normal' over the longer term, Village's Gold Coast parks also stand to benefit from an increase in both foreign visitors and domestic tourists should the Australian dollar remains at current levels.
| Year to 30 Jun | 2015 | 2014 | /(–) (%) |
|---|---|---|---|
| Revenue ($m) | 1,006 | 966 | 4 |
| U'lying EBITDA ($m) | 166 | 171 | (3) |
| D&A ($m) | 68 | 65 | 5 |
| U'lying EBIT ($m) | 98 | 106 | (8) |
| U'lying NPAT ($m) | 50 | 56 | (11) |
| U'lying EPS (c) | 31.0 | 34.9 | (11) |
| DPS (c) | 28* | 27 | 4 |
| * 14 cents final dividend, fully franked, ex date 10 Sep | |||
Similar to Amalgamated Holdings (see Amalgamated Holdings: Result 2015 on 21 Aug 15 (Sell — $13.16), Village's Cinema Exhibition business benefitted from the large number of popular movies released in 2015, with attendance rising 6% and EBIT increasing 19% to $57m.
While remaining dependent on popular movies to repeat this performance, Village is helping things along by continuing to build new cinemas – including its more profitable vMax large screens and luxury Gold Class cinemas – both here and in the US and Singapore.
An ordinary product line-up and lower profits it its DVD business meant its Film Distribution division suffered a 18% fall in EBIT to $32m. This division will benefit as its Film Production division (see below) produces more films and from the continuing increase in digital downloads including its new agreements with subscription video on demand providers Stan and Netflix.
Village didn't receive any cash dividends from its investment in VREG (its Film Production business) during 2015 and we'll be interested to review VREG's balance sheet when it's released later this year.
The company's Hainan Island Marine & Water Park project has been put on hold due to delays in the provision of essential infrastructure at the site, while the funds management venture with CITIC is in the process of raising funds from investors. Management also said that it will be 2018 at the earliest before it begins earning fees from operating any theme parks in Asia.
The company's share price is up 4% since Taking another look at Village Roadshow on 22 Jul 15 (Hold— $6.46). HOLD.
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