The Ardent Leisure Group (ASX: AAD) share price has climbed 1.5% to $1.92 in morning trade following the release of its half-year results.
For the six months ended December 31, Ardent Leisure posted a 12.1% decline in pro forma first-half revenue to $278.8 million. Earnings before interest, tax, depreciation and amortisation came in at $2.5 million, compared to a $13.4 million loss before interest, tax, depreciation and amortisation in the prior corresponding period.
On the bottom line Ardent Leisure delivered a pro forma loss after tax of $13.2 million for the six months, compared to a sizeable $49.4 million loss in the prior corresponding period. This loss was the result of an impairment charge made on the Dreamworld business of $22.8 million.
For the six months ended December 26, Ardent recorded revenue of $256.6 million, a loss before interest, tax, depreciation and amortisation of $1.6 million, and a net loss before tax of $15.6 million. Ardent has moved to a retail calendar basis for periodic reporting. This has been done to allow for improved comparability by ensuring reporting periods comprise the same number of days and weekends.
During the half it was the company's Main Event business which performed the strongest. It achieved revenue growth of 25.4% to US$128 million on a pro-forma basis thanks largely to the opening of new centres in FY 2017 and one new centre in Knoxville, Tennessee during the half. Pro forma EBITDA from the segment was $14.7 million, up 11.7% on the prior corresponding period.
Pleasingly, the Main Event business appears to have benefitted from a strong finish to the period and this momentum has been carried over into the second-half. Constant centre sales growth is up 3% over the 33-week period ending on 13th February 2018.
Its Theme Park business once again posted a drop in revenue. Pro forma revenue for the period fell 11% to $37.2 million as the Dreamworld recovery took longer than expected. One bit of good news is that trading has been much improved of late. According to the release, attendances are up 32.6% and revenue is up 55.6% for the period from December 10 to February 13 compared with the same post-incident period in FY 2017.
Finally, The Bowling segment posted pro forma revenue of $75 miilion and EBITDA of $9.9 million. This was a 16.7% and 33.8% increase on the prior corresponding period. This business has, however, been acquired by The Education and Entertainment Group for $160 million. This deal is expected to complete in the first quarter of 2018.
Should you invest?
Ardent Leisure still has a lot of hard work to do, but it is starting to look a lot more positive. If trading at its theme parks and Main Event centres continue to remain positive from hereon in, then I suspect that the company could return to growth in FY 2019. This could make it worth considering ahead of industry peers Event Hospitality and Entertainment Ltd (ASX: EVT) and Village Roadshow Ltd (ASX: VRL). Though it is a reasonably high risk investment, let's not forget.
