Shares of Village Roadshow Ltd (ASX: VRL) soared more than 8% today after the entertainment and media group released its full-year earnings results, despite reporting a dip in net profit.
So What: Most Australians will be familiar with Village Roadshow and associate it with Village Cinemas. Indeed, the company operates more than 700 cinemas throughout Australia, Singapore and the United States, while it is also the owner of theme parks such as Wet'n'Wild, Sea World and Movie World on the Gold Coast.
For the year ended 30 June 2015, the company's net profit after tax (NPAT) fell 4% to $43.9 million despite a 4% lift in income from continuing operations. The result was dragged lower by a disastrous performance from its Theme Parks division due to "extremely poor weather conditions" which saw total attendance fall during the period.
Encouragingly, the company said: "We couldn't wait to get the disappointment of the 2015 year with the washout of theme parks behind us. We look forward to hitting it out of the park in 2016 with some sunshine."
The group's Cinema Exhibition segment performed far stronger than the Theme Parks during the year which bolstered the company's earnings result. The division's operating profit rose 21.8% to $53.3 million. This was largely a result of cost management and improved margins, together with strong theatrical content with movies including Jurassic World, Fast and Furious 7, The Hunger Games – Mockingjay Part 1, as well as the final instalment in The Hobbit trilogy.
The 2016 financial year looks set to be another great year for the division with movies including The Hunger Games – Mockingjay Part 2, Star Wars – The Force Awakens! And James Bond's Spectre set to hit the big screen.
The company decided to reward shareholders with a fully franked 14 cent per share dividend, which is the equivalent to the amount distributed to investors at its half-year result.
Now What: Since the beginning of the year, shares of Village Roadshow have risen roughly 6%, compared to a 19% lift and 14% fall for rivals Amalgamated Holdings Limited (ASX: AHD) and Ardent Leisure Group (ASX: AAD), respectively.
Provided that weather conditions improve this summer and movie-goers continue to flock to the cinemas for the latest box-office hits, Village Roadshow could be a reasonable pick-up for long-term investors at its current price tag.
