The share price of Village Roadshow Ltd (ASX: VRL) has given up today all of the gains made this week with the stock back trading below the $7 mark in afternoon trade on Friday, earlier in the week the stock rallied as high as $7.28 after the entertainment and leisure company held its annual general meeting (AGM).
Here are the key takeaways from that AGM…
Inclement weather kept visitors away from the group's theme parks both on the Gold Coast and in Sydney during the key holiday period last year.
Importantly, the Chairman, Mr Robert Kirby, expects an improved performance this summer with trading so far in the current financial year (FY) showing the Gold Coast theme parks in line with expectations and first quarter admissions up on the prior corresponding period (pcp). Wet'n'Wild in Sydney is trading below expectations however with cool weather during the September holiday period being blamed.
The Cinema Exhibition division reported its fourth year of record results in FY 2015 which was able to help partially offset the Australian Theme Park division's weak result.
Pleasingly, the Chairman was upbeat about the outlook for this division with the Australian operations outperforming his expectations so far in FY 2016 and first quarter results ahead of the pcp.
Growth opportunities
At the AGM, Village Roadshow announced that it had signed a memorandum of understanding to oversee the development and subsequent management of a Wet'n'Wild branded water park in China. This park is expected to open in late 2016 and is in addition to the previously announced Joint Venture (JV) to pursue opportunities in the theme park and entertainment facility sector both within China and also across the wider Asian region.
Given the low growth state of the domestic economy, investors are desperate for growth. One area that is particularly appealing for still offering growth potential is the tourism, leisure and entertainment sector which is benefitting from a weaker Australian dollar.
Village Roadshow is primed to benefit from this trend, as are a number of its listed peers including Ardent Leisure Group (ASX: AAD), Amalgamated Holdings Limited (ASX: AHD) and Mantra Group Ltd (ASX: MTR).