Village Roadshow Ltd (ASX: VRL) shares nearly 2% today after the entertainment business released their half-year results.
Village Roadshow is the name behind movie productions, film distribution, Village Cinemas and theme parks like Movie World on the Gold Coast.
Here Are The 5 Key Points
- Group EBITDA increased by 31% to $65 million
- Gold Coast Theme Parks ticket sales dollars up 27%
- Savings in excess of $10 million are expected from cost reduction program
- Net debt reduced from $338.5 million to $216.4 million
- Chief Executive Officer Graham Burke will retire at the end of 2019
Bell Potter net profit (NPAT) estimates were $10 million for 1H19. VRL beat this expectation with reported NPAT being $12.8 million. The biggest contributor to this was the Cinema Exhibition division, which had NPAT of $8.3 million, while the Corporate division lost $4.7 million.
Commenting on the first half result, CEO Graham Burke stated, “Our first half result provides clear evidence that the turnaround is underway. With a dedicated team and a clear strategy, we continue to ‘right the ship’.”
On the separate divisions, he commented, “Theme Parks are realising the rewards of an 18-month turnaround strategy. Cinema Exhibition recorded its second best first-half industry box office result. Roadshow is proactively managing the transition to a digital universe.”
Commenting on Mr Burke’s retirement, Executive Chairman Robert Kirby said, “We thank him for his enduring commitment and the leadership he has shown. Graham leaves an extraordinary legacy as CEO and we look forward to his continued involvement on the Board.”
Looking at each of the divisions, Film Distribution is expected to be lower than FY18, but could depend on the performance of certain titles. In Theme Parks, 2H19 is expected to achieve a “significant improvement” on 2H18. In Cinema Exhibition, 2H19 is expected to top the first half of the year with a strong finish to FY19.
VRL is considering FY19 to be a “reset and transition year into FY20 and beyond” and this seems to be working for them. They have stated that if performance continues to meet expectations, investors can expect dividends to be reinstated with the full year results.
Of course, they will need to appoint a new CEO for 2020, but they seem to be on the right track.
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Disclaimer: At the time of writing, Max does not own shares in any of the companies mentioned.