Ardent Leisure shareholder Ariadne calls for $25 million in new attractions at Dreamworld

An investment group that owns 10% of Ardent Leisure is calling for the group to invest $25 million in new attractions as part of a greater push for reform and seats on the company's board.

Ardent Leisure recommended that security holders take no action in dissident shareholder Ariadne's call for a general meeting in which they will seek 40% of the seats on the company's board of directors. Ariadne represents a group of investors that own a combined 10% stake in the company.

The push from Ariadne comes as Ardent Leisure continues a tumultuous period that has seen major shakeups in the senior leadership team amid concerns over the continued expansion of its US-based Main Event division and the strategy for the recovery of the troubled Dreamworld theme park.

Ariadne have released a presentation that outlines their vision for Ardent Leisure.

The document focuses primarily on the performance of Main Event, highlighting results provided by their independent consultants that say staff and service are poor, the centres poorly designed and the marketing strategy weak. They provide a brief strategy for the theme parks which focuses on an injection of capital expenditure funded by the sale of unused land.

Ariadne says Dreamworld has suffered from underinvestment, stating “over the last 10 years Theme Park Development CapEx (capital expenditure) amounts to less than 10% of the $368 millionm invested in Main Event over the same period."

Dreamworld has consistently underspent compared to nearest competitor Warner Bros. Movie World, where the investment in DC Rivals HyperCoaster alone is speculated to top Dreamworld's investment in new attractions over the past decade.

Their solution to this problem is something have land surrounding Dreamworld sold off and developed for commercial opportunities.

More than $100 million has been wiped Ardent Leisure’s share value since the death of four park guests last October on Dreamworld’s Thunder River Rapids ride.

A recent assessment by Citi analyst Sam Teeger warned that Main Event “continues to underperform” in like-for-like sales and margin expectations, and said the rollout of the entertainment complexes would be slowed again.

Meanwhile, Deutsche analysts led by Wassim Kisirwani said the weakness in Main Event’s sales and margins was of “particular concern” due to Ardent’s reliance on this division to drive earnings growth.

Ardent has also been under fire due to a sign-on bonus to new Chief Executive Simon Kelly and former postholder Deborah Thomas exiting with a $731,000 payout. 

Image: Dreamworld's BuzzSaw ride.

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