Today, Ardent Leisure Group (ASX: ALG) released its first half-year results for the period ending 25 December 2018, with the group posting a net loss of $21.8 million.
Ardent Leisure Group is an operator of leisure and entertainment assets across Australia, New Zealand and the United States. It operates the theme park Dreamworld on the Gold Coast where four people tragically died on one of its rides in 2016.
Key Results
Ardent Leisure Group reported:
- Revenue down $38.8 million or 14.6% to $226.7 million
- EBITDA up 112.5% to $0.2 million
- Net loss after tax down 39.7% to $21.8 million.
Part of the $38.8 million revenue decline was due to lost contributions from the sale of the Marinas and Bowling Entertainment businesses which contributed $75.1 million in the prior period. This was partially offset by a $36.2 million or 19% increase in revenue from continuing operations, driven by Main Event which made up over 80% of the total revenue.
Dreamworld Nightmare Continues
Ardent reported the Dreamworld incident costs relating to the coronial inquest continued to impact its profitability. Dreamworld reported costs amounted to $5.3 million after insurance recoveries before tax, which isn’t enough to fully explain Ardent’s net loss — unless shaken consumer confidence is impacting sales too.
Group Operations
Ardent’s US-based leisure and entertainment business, Main Event, was the only operating segment to record a positive result, with EBITDA of $16 million on a margin of 11.5%. It’s Australian segment, Theme Parks, consisting of Dreamworld, WhiteWater World and SkyPoint, recorded a negative EBITDA of ($12.4) million with a negative margin of 36%.
Rask Perspective
While I am not intimately familiar with the details of the tragedy that occurred in 2016, a company that appears to have cut back its repairs and maintenance expenditure because it was over budget risking the lives of its customers says a lot about the company. At this time, it is not something I would add to my portfolio.
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