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Village Roadshow share price trading higher on 1H19 results

The Village Roadshow Limited (ASX: VRL) share price has jumped 2.17% on the ASX today after a solid half-year result in which the company reported a net profit after tax (NPAT) of $2.4 million.

What happened in first-half earnings?

The company cited a turnaround in its Theme Parks segment as a key driver of the result, with Gold Coast Theme Parks 1H19 ticket sales dollars up 27% on 1H18. This comes as theme parks around Australia continue to stabilise after initial declines in the wake of the October 2016 Dreamworld tragedy.

Group EBITDA rose 31% on prior corresponding period (pcp) to $65.0 million in the half, while NPAT excluding material items rose to $12.8 million (from $0 in 1H18).

The result was also buoyed by strength in the Cinema Exhibition Industry while the company’s cost reduction program implemented in FY19 remains on track to deliver annualised savings of $10 million.

Leveraged for the troubled group reduced to 2.04x (from 2.83x in 1H18) while net debt was reduced from $338.5 million to $216.4 million in the half.

Pleasingly for investors, the Board plans to reinstate dividends at the full year result in August 2019 if performance continues to meet expectations.

The company endured a challenging 2018 as it’s share price plunged 45% throughout the year to $2.805 per share as at 31 December 2018. While it has since recovered slightly to $3.26 per share, there’s plenty of work still to do to keep debt under control and return to long-term profitability.

Foolish takeaway

I personally am not bullish on the leisure industry and particularly given this morning’s result from Ardent Leisure Group Ltd (ASX: ALG) which saw them post a $21.7 million loss.

For those who are similarly bullish on leisure, I’d suggest checking out these top growth shares that have been tipped as market beaters.

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Motley Fool contributor Lachlan Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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