The Ardent Leisure Group Ltd (ASX: ALG) share price is slumping lower today after the Dreamworld operator released its half-year results to the ASX this morning.
At the time of writing, Ardent Leisure shares are trading 5.9% lower at $1.275 apiece.
What did Ardent Leisure announce?
For the six months ended 31 December 2019, Ardent Leisure reported revenue of $263.2 million, a $36.6 million increase on the prior corresponding period (pcp) or a $20.5 million increase on a like-for-like basis.
Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $44.2 million or $14.9 million on a pro forma basis, driven by growth in both the group's Main Event and Theme Parks businesses.
However, the company recorded a net loss after tax of $22.5 million, up from a net loss of $21.8 million in the pcp.
Ardent Leisure commented that its 1H20 statutory results were impacted by a change in lease accounting standard (AASB 16 Leases) as well as an extra week of trading with FY20 being a 53-week year.
Main Event and Theme Parks divisions
Ardent Leisure's Main Event division achieved revenue growth of 4% to US$144.6 million in 1H20. This result was driven by growth in constant centres as well as the full period impact of new centres that were opened in FY19 and 1H20.
The Main Event division revenue actually increased by 9.7% on a like-for-like 26 weeks basis when converted to Australian dollars.
The group opened one new centre in a new market: Baton Rouge, Louisiana in August 2019, and two more were opened in the first few weeks of 2H20.
Ardent Leisure's Theme Parks division reported pro forma revenue of $36.1 million for the half-year, up from $34.4 million in the pcp. This was underpinned by a 2.9% increase in attendance on a like-for-like 26 weeks basis. In addition, the division benefited from an increase in average per-capita spend.
No interim dividend declared for 1H20
Ardent Leisure again decided not to declare an interim dividend for the current financial year. According to the company, this decision is the result of significant reinvestment of earnings and available capital it has made into the business.
As per the announcement, the Ardent Leisure board made this decision in order to drive growth in its Main Event division and support the recovery efforts at Dreamworld through the development of new attractions.
The company pointed out that future dividend payments will be dependent on its financial position and capital requirement which will be entirely at the discretion of the board.
Business outlook for remainder of FY20
Pleasingly for shareholders, the company raised its full-year constant centre revenue growth guidance for the Main Event division to 1.5% – 2.5%. Previous guidance was between 1.0% and 2.0%.
Ardent Leisure expects four new centres will be opened in FY20 to add approximately 85 operating weeks. Looking further ahead, it anticipates five new centres in FY21 and eight or more centres thereafter.
Despite strong trading during the Christmas holiday, the company believes it is unlikely that Dreamworld will break even in 2H20. This was exacerbated, Ardent Leisure explained, by a prolonged period of severe wet weather, the Coronavirus, and potential impact on attendances from the Coroner's Report relating to an incident last year.
