Village Roadshow Ltd puts building blocks of growth in place

Wet 'n' Wild Sydney's strong attendances point to a good future.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Village Roadshow Ltd (ASX: VRL) has invested a lot into its new Wet 'n' Wild Sydney water theme park that opened in December, already getting over 400,000 visitors since it opened and having strong trading results. In the full-year report we will see more of a contribution, but in the half-year results, the returns of the investment are still to come.

The company is a theme park operator and film distribution and exhibition company that has brands like Warner Bros. Movie World and Sea World. It operates 680 cinemas in Australia, Singapore and the US and has distribution deals with Warner Bros and The Weinstein Company. It was involved with the film production of The Great Gatsby and upcoming films like The Lego MovieWinter's Tale, and Edge of Tomorrow.

In its report for first-half 2014, total revenue was down 0.2% to $478.8 million and net profit after tax was $18.9 million, 43% down from the $33.4 million in the pcp. Expenses excluding finance costs were about $20 million higher on 1H2012.

Robert Kirby, the co-CEO and co-chairman said: "We have spent money to invest in the building blocks for our future. The opening of Wet 'n' Wild Sydney has been a huge success and will pave the way to our future growth prospects in China and South East Asia."

It declared a 13 cent per share dividend fully franked to be paid on 31 March 2014, in line with the 13 cps final dividend paid in October 2013.

Over the past three full-year reports its net underlying profit has risen from $31.5 million in 2011 to $57.3 million in 2013, so the company has been performing well, yet the need to invest for further growth will reduce short-term earnings until those investments begin to pay off, as in the case of the Wet'n'Wild Sydney park.

Foolish takeaway

With a recovery in the general economy gradually occurring, more discretionary spending will go towards leisure activities like films and theme parks. In addition, tapping into the big Asian market is timely as more Chinese try international tourism. The company also has a theme park under construction at the Chinese tourist destination Hainan Island, which is scheduled to be fully open in May 2015. I look forward to seeing the attendance numbers of that park added to the new Sydney park. These building blocks will keep the company on its path of growing business over the long term.

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »