The Event Hospitality and Entertainment Ltd (ASX: EVT) share price ended slightly higher today after the company released its half-year earnings to the ASX this afternoon.
Event Hospitality and Entertainment, formerly known as Amalgamated Holdings Limited or AHL, is an Australian provider of entertainment, hospitality and leisure services.
The group's entertainment division includes the operation of Event Cinemas in Australia and New Zealand, Moonlight Cinemas across the nation, and Cinestar Cinemas in Germany.
Event Hospitality also operates hotels and resorts including Rydges, QT, Atura and the Thredbo Alpine Resort.
What did the Event Hospitality announce?
For the six months to 31 December 2019, the company announced revenue from continuing operations of $524 million, up marginally on the prior half year by 2%.
Normalised profit from continuing operations came in at $86 million, representing a decline of 2.2%. However, it should be noted that this figure was calculated before interest, tax and the impact of the new AASB 16 Leases accounting standard.
Meanwhile, the company recorded a statutory net profit after tax (including discontinued operations) of $93.6 million, an increase of 38.7% on the prior corresponding period (pcp).
The company flagged that these results were impacted by a number of significant factors. This included a reduction in Entertainment gift card breakage revenue related to the impact of AASB 15 Revenue as well as the legislated change in expiry dates of gift cards. As per the change in legislation, the expiry date is now increased from one to three years.
After adjusting for these items, revenue for the group was actually up 2.9% and normalised profit before interest and income tax expense was up 3.3%.
Hotel division achieves solid result in a challenging market
The company's Hotel division saw an adjusted profit increase of 4.4%. Event Hospitality highlighted that its Hotel division achieved this solid result in an increasingly competitive market. With this, growth was achieved in occupancy, revenue per available room and owned hotel conference and events revenue.
The company also noted a solid result from Thredbo despite unfavorable ski conditions during the half-year period.
Australian Entertainment performs solidly
Event Hospitality's Australian entertainment revenue was up 4%, while profit increased by 1% on an adjusted basis.
The company attributed this growth primarily to strong Australian box office sales. Event Hospitality's strategy to evolve its cinema offering appears to be on track. This has translated to growth in market share of blockbuster films, growth in admissions and also an increase in the frequency of visits by Cinebuzz members.
New Zealand division notches strong growth
The company's New Zealand division recorded very strong growth with normalised profit up by 30% on the pcp, or an even higher 49% on an adjusted basis. This growth saw an increase in market share while admission growth was up by 6%, average admission price was up by 10% and merchandising spend per head came in higher by 6%.
Good start so far in 2020
Event Hospitality commented it has had a good start to the second half in January in its Entertainment division, with Australian nationwide box office revenues up 6% on the prior year.
Commenting on the outlook for the second half, CEO Jane Hastings said:
"The temporary closure of Thredbo in January due to bushfires in the region substantially impacted summer revenue, however visitors are now returning to Thredbo. The Hotels division will be impacted by the Government travel restrictions and suspended airline services as a result of the Coronavirus outbreak."
"Whilst it is too early to assess the full impact, the immediate impact on March earnings is expected to be between $2 million to $3 million. The Entertainment division will be marginally impacted by a reduction of Chinese film content," she added.
