Reporting massive losses Ardent Leisure expresses confidence in Dreamworld’s future

While reporting a massive $136.6 million loss for the 2019/20 financial year, Ardent Leisure is confident that demand for Gold Coast’s theme parks will be “stronger than ever” after the Coronavirus pandemic subsides.

Revealing the group’s full year results yesterday, Ardent Leisure Chairman, Dr Gary Weiss advised that said revenue for the 12 months to 30th June was $398.3 million, down $85 million on the previous period.

Ardent reported $54.5 million in revenue from its Dreamworld and WhiteWater World attractions - down 18.8% on the previous year, ascribing the drop as being largely due to the closure of the parks in March.

With Dreamworld and WhiteWater World to reopen on 16th September, Ardent advised that revenue prior to the closures was $51.4 million, with attendance and revenue growth at 4.5% and 4.7% respectively.

Commenting on the results, Dr Weiss said COVID-19 had a significant impact on the business, noting “while positive progress has been achieved by Main Event (Ardent’s US-based business) and theme parks in the first eight months of the year, our focus turned to capital management and securing capital for the businesses as the COVID-19 pandemic escalated.”

Dr Weiss said the company is starting the current financial year from a position of strength thanks to Redbird Capital buying a stake in its Main Event business in the USA and $69.9 million in funding over three years from the Queensland Government.

He advised “the financial assistance package provided by the Queensland Government will enable us to reopen Dreamworld and WhiteWater World and continue to employ hundreds of people, directly and indirectly.”

Nonetheless, Dr Weiss warned of “uncertain and challenging conditions” for the industry, while lockdowns and border restrictions cause significant disruptions to the travel and leisure industries, adding “we believe that the demand for out-of-home family entertainment experiences will be stronger than ever once the pandemic has subsided and restrictions have eased.”

Ardent Leisure Theme Parks Chief Executive, John Osborne said his team continued to focus on minimising cash burn and taking a “disciplined” approach to reopening its attractions.

Osborne added “we are currently facing the toughest set of business conditions in decades meaning that uncertainty is likely to prevail for some time and we look forward to taking this challenge head on by being prepared to adjust as conditions evolve.”

Dr Weiss also advised that work on Dreamworld’s new multi-launch rollercoaster is set to commence “as soon as possible”, with the ride expected to open in next year.

This work has been made possible by the Queensland Government’s package with the company having more than $100 million available for the Australian business (including $32.6 million of its own cash).

In addition, the Main Event division of family entertainment centres has $129 million of cash available but both funding pools are kept separate.

The company also benefited from selling off a 5630 metre² parcel of what it calls “surplus land” at Coomera for $2.5 million.

Reshaping Dreamworld
While Dreamworld is set to open on 16th September, the attraction will be going through a period of significant change.

While work on its new rollercoaster is set to get underway, Ardent has announced that following a review it will close two of Dreamworld’s rides - the Wiggles-themed Big Red Car and Flowrider surf wave simulator.

These latest ride closure follow those of Thunder River Rapids, Wipeout, Rocky Hollow Log Ride, and Tower of Terror II of recent years.

Commenting on the closures, the company advised that Dreamworld’s “remaining ride count will be comparable to our closest competitor and presents a diverse range of kids, family and thrill rides.”

In response, the Parkz theme park enthusiasts website has reported that this will see “Dreamworld's already threadbare attraction lineup … become thinner as the theme park gears up for reopening in September”, highlighting that the “Big Red Car Ride was the park's only substantive ride for young children, the park's only traditional dark ride as well as the anchor attraction for the ABC Kids area which is a mix of ‘same-same’ kids flat rides that would be equally at home in any shopping centre or school fete.”

Parkz added pay-to-ride FlowRider “has seen its popularity wane - perhaps in large part to its confusing location in a dry theme park - as opposed to WhiteWater World meters away - (and) the transformation of its surrounds into a confusing mess of racing cars, beach theme and Trolls, as well as an overall deemphasis at Dreamworld on experiences and upsells as the business model moved towards repeat visitation from local residents.”

Despite its many challenges, morale among Dreamworld’s management team is understood to be high.As explained to Australasian Leisure Management by a Dreamworld team member "a lot of high-quality managers have joined Dreamworld in the past couple of years. They wouldn't have come on board to close the place down."

Images: The concept for Dreamworld's new rollercoaster (top), Ardent Leisure Chairman, Dr Gary Weiss (middle) and Dreamworld's Trolls (below).