Shares in Event Hospitality and Entertainment Ltd (ASX: EVT) closed Monday in the green after the company released its interim report and financial results for the half year ended 31 December 2021.
The EVT share price finished Monday 5% higher at $15.30 as investors bought in following the release of its earnings results.
EVT share price lunges higher amid earnings growth
Key takeouts from the company's earnings results include:
- Group normalised revenue was $438 million, up $155.1 million or 54.8% on the previous year
- Normalised EBITDA was $64.1 million, up $95.1 million on the prior comparable half year
- Statutory profit after tax was $33.3 million, a $93.6 million improvement on the prior comparable half year reported loss.
- Divestments in non-core assets on-track: $194.4 million to date, with gross proceeds to date exceeded most recent valuations by 35.1%.
- Divestments and improved trading performance reduced net debt to $292.3 million at 31 December 2021, consistent with pre-COVID-19 levels.
What else happened this half for EVT?
The company noted that it faced "materially tougher government mandated restrictions than [the] prior comparable period", like all businesses in Australia during 1H FY22.
Nevertheless, group revenue can in almost 55% higher year on year at $438 million, although that figure reduces to just 35% when backing out the German Government's Bridging Aid III support the company received.
EVT also said its entertainment businesses benefited from |pent-up demand for the cinema experience and strong performance of key blockbuster films Spider-Man: No Way Home and No Time to Die.
EVT owns the largest cinema circuits in Australia, New Zealand and Germany under the brands Event Cinemas, Greater Union, Moonlight Cinemas and CineStar just to name a few.
And weren't the group's growth initiatives on fully display this half as well, particularly through add-on sales generated from its 'Cinema of the Future' agenda.
"Implementation of the Cinema of the Future strategies to leverage this demand resulted in customers spending
more each visit and generated a higher profit per customer on a like film basis", it said.
Aside from this, the group says it continued to make good progress on the divestment strategy with sales in the half year realising gross proceeds of $107.9 million. Cumulatively, the company has now generated gross proceeds of $194.4 million, "exceeding the most recent valuations by 35.1%".
Management commentary
Speaking on the announcement, EVT CEO Jane Hastings said:
In this half year period, the Group navigated materially greater government lockdowns and restrictions than the prior comparable period. Despite this, the transformation strategies and actions we have completed over the past few years, ensured we are agile and able to respond to the ever-changing landscape. This is evident in the revenue growth and EBITDA turnaround for the Group in this period, which included $75 million of active cost management. Our new business models are already delivering evidence of improved margins which we expect to continue post the pandemic. We have a strong balance sheet and Group net debt is down to pre-COVID level. We are in a strong position to navigate current challenges and invest for growth. I am incredibly proud of the entire EVT team and the way everyone continues to innovate and adapt to deliver the best possible results.
What's next for EVT?
Commenting on the outlook for 2022, Hastings noted that demand for the cinema experience will remain strong when restrictions are lifted. Based on its current pipeline, the company expects box office revenue "to exceed that achieved in the second half of the prior financial year" for H2 FY22.
Signs of recovery for Hotels were evidenced in the December trading period before Omicron, including pleasing growth in the average room rate, and in Australia, corporate travel is expected to gain traction from April. Thredbo's summer season is tracking relatively in line with the prior summer season. Overall, our underlying Group EBITDA in the second half last year was approximately $15 million excluding the German Government's November and December 2020 aid program, and we expect underlying Group EBITDA in the second half this year to demonstrate a strong improvement on that result, subject to no further government trading restrictions.
EVT share price snapshot
In the last 12 months, the EVT share price has climbed 47% after spiking another 3% this year to date. In the past month, it has also soared almost 10% and is in the green across all time frames.
