Ardent Leisure Group (ASX:AAD) provides positive trading update: Is now the time to invest?

The Ardent Leisure Group (ASX: AAD) share price has drifted lower on the day of its annual general meeting.

In afternoon trade the entertainment company’s shares are down 0.5% to $1.54.

What happened at the annual general meeting?

As well as the traditional annual general meeting votes, Ardent Leisure shareholders were asked to vote on the approval of its scheme of arrangement.

After conducting a review into the merits of its current structure, the company decided that the complexity of its current stapled structure is no longer appropriate and that the corporatisation and associated streamlining of the structure is in the best interests of security holders.

At the time of the proposal chairman Dr Gary Weiss explained the rationale of making such a move.

He said: “Consistent with the Ardent Leisure Group’s focus on delivering increased value to its securityholders, the Proposal and Restructure are expected to deliver a number of benefits, including greater flexibility to fund investment into growth of Main Event and Dreamworld, the capacity to make Ardent Leisure Group more attractive to a broader range of investors and reduce the regulatory uncertainty associated with stapled structures.”

Shareholders appear to have agreed with this view and voted 99.86% in favour of the scheme of arrangement. It still remains subject to court approval, but could be implemented just before Christmas if everything is approved.

Trading update.

Management also provided an update on the company’s performance in FY 2019 at its meeting.

According to the release, its Main Event business has had a mixed start to the year. Main Event’s first quarter constant centre sales were up 1.9% on the prior corresponding period.

However, constant centre sales were down 4.7% in October compared to the prior corresponding period. Management has blamed this on a strong prior period in 2017 which saw constant centre sales grow 10%.

Despite the October setback, management is optimistic on its second half prospects and believes the business has positive momentum heading into the half.

Elsewhere, first quarter Theme Park revenues are up 19% despite a 6% decline in attendance. Year to date the segment has posted an operating loss of $3.8 million, but this includes restructuring and other one-off costs of $1.8 million.

Should you invest?

Ardent Leisure’s performance over the last 18 months has been thoroughly underwhelming but there are signs that things are finally improving now.

It is a little too soon for an investment for me, but I’ll certainly be keeping a close eye on its progress over the next six months.

In the meantime, I think tourism-themed shares such as Sydney Airport Holdings Pty Ltd (ASX: SYD) and Webjet Limited (ASX: WEB) might be better options for investors.

Alternatively, here are three top blue chip shares that have been tipped for big things in 2019.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2019."

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.