Ardent Leisure revenues exceed pre-COVID levels

For the first time in six years Ardent Leisure is set to record positive earnings result for the full financial year, with unaudited revenue of $83.9 million tracking 25% above pre-COVID levels.

This represents the highest aggregate value of ticket sales the group’s Dreamworld, WhiteWater World and SkyPoint attractions since 2015/16, the year before it saw the deaths of four people on its Thunder River Rapids ride which impacted its reputation and deterred visitors.

The theme park operator notes that 2022/23 revenue per visitor was the highest recorded for many years - a 54% jump from 2015/16 levels. This partially offsets international visitation remaining well below historical levels at just 2% of all visitors, compared to one in five in 2015/16.

Operating revenue for the last two months of FY23 was up 21 per cent year-on-year, even though there was a slight moderation in attendance volumes during the June half.

In a statement the company advised “this has resulted in 2H23 revenue being 30% above the prior period, despite macroeconomic headwinds and the business cycling an unimpeded 2H22, which included its busiest Easter period for several years.”

Noting that after a December half with an EBITDA of $4.3 million excluding specific items, the statement added that the business is expected to break even in the June half, advising “consistent with many operators in the consumer discretionary sector, worsening economic conditions have started to reduce discretionary spending and the high inflationary environment has introduced some additional cost pressures for the business.

"Management has remained highly focussed on delivering a differentiated and compelling guest experience, while also maintaining a disciplined approach to management of all discretionary costs.”

The statement added that the anticipated positive earnings are is a "significant improvement" on the EBITDA loss of $15 million in the previous financial year and is "substantially above its FY19 pre-COVID performance".

It went on to state “while the short-term headwinds of macroeconomic conditions may lead to more moderate growth in the near term, the Group expects performance to meaningfully improve further as it delivers new capital investments.

"As international and interstate visitation improves this will boost profitability due to the relatively fixed nature of many operating costs.

"Management remains focussed on delivering its recently announced pipeline of new attractions to drive incremental visitation and return performance of the business to historical earnings levels."

The past year has seen Ardent announce investment in excess of $50 million in new rides and attractions, to be delivered over the next two years.

By the end of June, cash balances stood at approximately $141 million, and the company is also anticipating the receipt of US$8.8 million from the sale of Main Event.

In its update today, Ardent Leisure also highlighted that management had been working with stakeholders to achieve a preliminary development approval across a 55-hectare site, where in 2021 the group announced plans to establish a $75 million Dreamworld resort.

It concluded “such an approval (if granted) would provide significant optionality and planning certainty for the group to achieve the highest and best use for all parts of its land holdings.

"This process requires the completion of several complex technical reports and ongoing engagement with the relevant authorities. While it is not appropriate to comment on prospects for an approval to be granted, management to date has received positive feedback and support to move forward with this application."

Image: Dreamworld's Steel Taipan, opened in December 2021.