Dream result: Ardent Leisure (ASX:ALG) share price soars 18% on earnings

What was so exciting about the Dreamworld operator's half-year results?

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Key points

  • The Ardent Leisure share price is surging by 18% today 
  • The company's net loss after tax was a 55% improvement on the pcp 
  • Revenue also surged by more than 100% 

The Ardent Leisure Group Ltd (ASX: ALG) share price is soaring today after the company reported positive half-year results.

Shares in the leisure and entertainment company are currently swapping hands at $1.585, an 18.28% gain.

Let's take a look at what may have impacted the company's share price today.

Ardent Leisure share price surges on half-year results

Highlights from the H1 FY22 results include:

  • 55.3% reduction in net loss after tax from $82.3 million in the prior corresponding period (pcp) to $36.8 million
  • 993% improvement on earnings before interest, tax, depreciation and amortisation (EBITDA) to $43.6 million
  • 331% improvement in EBITDA excluding specific items to $41.8 million
  • Revenue surged 100.2% to $275.5 million
  • No dividend for FY22

What else happened in the half?

The surge in total operating revenue was driven by a strong performance in the Main Event business. Theme Parks and Attractions revenue also soared by 41% due to higher pass sales and turnout.

The higher EBITDA excluding specific items was largely underpinned by a strong performance of the United States business.

The board did not declare a dividend for FY22 due to "ongoing uncertainty in the current environment".

Ardent Leisure's Main Event revenue and EBITDA eclipsed H1 FY20 pre-COVID-19 levels, driven by constant centre total revenue growth of 20.1%. There was also a 39.5% increase in walk-in revenue.

A new centre in Chesterfield, Missouri performed above expectations, with the company now operating 45 centres in 16 US states.

The Theme Parks and Attractions business, which includes Dreamworld, WhiteWater World and SkyPoint on the Gold Coast, reported a 41% surge in operating revenue on the pcp.

However, domestic and international border restrictions continued to impact turnout at the theme parks during the half.

On a positive note, since Queensland borders opened in December, recovery momentum has started to build. Total attendances jumped 17% on the pcp, while the value of annual passes improved by 40%.

A new Steel Taipan rollercoaster opened at Dreamworld in December 2021. Ardent Leisure said this has been popular with guests.

Management commentary

Commenting on the results driving the Ardent Leisure share price today, chairman Gary Weiss said:

We are pleased to deliver another solid result for Ardent Leisure Group despite the ongoing challenges of the pandemic.

Main Event has continued to perform above pre-COVID levels and we are optimistic that this positive momentum will continue into second half of FY22.

Strong trading performances in the Main Event business, and a disciplined approach to capital and operational expenditure in Theme Parks and Attractions have allowed the Group to maintain a solid financial position.

What's next?

Positive momentum in Ardent Leisure's Main Event business has improved liquidity, setting the business up well for future growth. The Main Event business plans to open up three new centres in the second half of FY22.

The Theme Parks and Attractions business is "optimistic" on the outlook for the future. Easing of government restrictions and improving COVID-19 sentiment is expected to unlock demand in the local and interstate markets.

Commenting on this increasing demand, Theme Parks and Attractions CEO Greg Yong said:

The reopening of the borders and lifting of some restrictions in late December was warmly welcomed however this coincided with the Omicron wave and difficulties related to state government COVID testing and isolation requirements.

Despite this, the business has seen increased ticket sales and attendances for the period, with January and February results suggesting demand is improving for leisure experiences.

Ardent Leisure share price summary

The Ardent Leisure share price has soared 147% in the past year, while it is gaining around 17% year to date.

In the past week, it has jumped around 17%, while it is up 25% in the past month.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned 2.46% over the past year.

Ardent Leisure has a market capitalisation of $758 million.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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