ASX entertainment shares have lost major ground today in another day in the red for the ASX. The S&P/ASX 200 Index was down 3.4% at market close but entertainment shares fell by more as restrictions on gatherings of over 100 people began to bite.
Village releases update on COVID-19 response
Village Roadshow Ltd (ASX: VRL) shares fell a massive 31.05% as the entertainment group flagged the potential closure of its theme parks and cinemas. CEO Clark Kirby said, "based on international precedent, it is possible that cinemas and/or theme parks may be closed in Australia for a period of time, which would have a significant adverse impact on VRLs earnings during that period."
Since Village's announcement this morning, the Australian Government has introduced even tougher border protection measures. From 9pm tomorrow, all foreign travellers will be banned from entering Australia. Previously, only travellers from China, Iran, Italy, and South Korea were banned.
This will put further pressure on Village's theme parks, which have seen a continued decline in visitors, particularly from the international tourist market. Forward bookings have been weak and lower annual pass sales in the domestic market have made for challenging trading conditions, which Village expects to continue.
Aristocrat withdraws FY20 outlook
Shares in Aristocrat Leisure Limited (ASX: ALL) finished the day down 5.31% after the company withdrew its outlook for the full year yesterday. Aristocrat advised softer demand was becoming evident in global land-based markets as customers initiate temporary venue closures and adopt a more cautious approach to capital expenditure.
The company has been putting in place responses to COVID-19 for several months, and is executing on comprehensive short and longer term risk management and mitigation plans.
Land-based gaming operations and outright sales contribute around 30% each to Aristocrat's revenue, both of which are likely to suffer. Digital games, however, contribute around 40% of revenue and Aristocrat reported yesterday that digital bookings have been unaffected.
SkyCity announces impacts of coronavirus
Shares in SkyCity Entertainment Group Limited (ASX: SKC) dropped 13.02% today after the Group reported serious declines in visitors and revenue yesterday. Visitation to the SkyCity precinct in March to date is down 15%, with electronic gaming revenue down 14% and table revenue down 43%. Food, beverage, and conventions revenue is down 32% and Sky Tower revenue is down 35%.
Newly announced enhanced border controls, along with social distancing requirements and restrictions on mass gatherings, will have further negative impacts, in particular on the tourism-related aspects of the business. Yesterday, the company speculated it was possible a full-lock down would be implemented in New Zealand and/or Australia which would lead to the temporary closure of the SkyCity properties.
While SkyCity has experienced a decline in visitation at its properties, it has observed an increased activity on its online offshore casino which is available to New Zealand customers. "Perhaps this reflects that our New Zealand customers are choosing to gamble online in response to the social distancing requirements and restrictions on mass gatherings," CEO Graeme Stephens said.
