Investors dump Ardent shares as Dreamworld tragedy drags it to a $49m loss

13/07/2019 Posted by admin

Ardent chief executive Deborah Thomas said Dreamworld “is expected to recover over the course of time”. Photo: Glenn HuntArdent chief executive Deborah Thomas says she is “not going anywhere” and will work to restore the theme park operator to its former glory after the company sank to a $49.4 million loss for the December half following the fatal accident at its Dreamworld theme park in October.
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The stock plunged as much as 25 per cent before closing 21.8 per cent lower at $1.69 on Thursday, with $220 million wiped off the company’s sharemarket value.

Earnings before interest, tax, depreciation and amortisation at Ardent’s theme park division plunged 72 per cent to $5.9 million as revenues fell 28 per cent to $41.8 million in the six months to December 31, the company said in a statement to the ASX.

Ardent’s overall net profit was erased by a $95.2 million property, plant and equipment write-down, goodwill impairment and incident costs associated with the Dreamworld tragedy. Ardent slashed the value of the Gold Coast park in its books to $147 million after the incident on its Thunder River Rapids Ride, which cost the lives of four people and led the company to close the park for 45 days.

The board declared a distribution per security for the period of 2¢, compared with 7¢ for the previous corresponding period.

Speaking after the results were released, Ms Thomas said that as Dreamworld recovered, its value and profits would again improve. With some 1000 people working at Dreamworld she said she was “determined” to get the business back up and running.

“We have drawn a line in the sand and we now need to get everything right,” she said.

“We are all pulling together to get the best outcome for shareholders and our thoughts and prayers remain with the families of the victims.”

Ms Thomas said “the effects of this tragedy will be felt for some time and there is much healing still to take place. Our priority in reopening the park was to do so in a way that was respectful to the families of the victims.”

“Dreamworld is expected to recover over the course of time, assisted by new attractions and exciting branded retail concepts, supported by promotion to domestic and international visitors,” she said.

“The theme park businesses are also expected to benefit from increased domestic and international tourism to the Gold Coast for the 2018 Commonwealth Games and the development of land adjoining the property in Coomera.”

Ms Thomas dismissed speculation the land on which the theme park was built could be sold off for residential developments. There were no plans to close the park or redevelop it into residential buildings, she said.

“At the moment the zoning is parks and entertainment. Obviously, different zoning such as residential and commercial could increase that value quite significantly, but at the moment, the highest and best use is certainly as a theme park,” she said.

It has been estimated Ardent generates up to $300,000 a day from its Gold Coast tourist assets, which include WhiteWater World and SkyPoint. There is also a new LEGO store at Dreamworld, which is trading well.

At the time of the closure, brokers said the impact of the event on Ardent’s near-term outlook was still uncertain, as were the longer-term implications.

During the period, the group sold the d’Albora Marinas business for $126 million. That represents an 11 per cent premium over current book value of $113.5 million.

The purchaser is a special purpose vehicle jointly owned by Sydney-based Balmain Corporation and Goldman Sachs.

But aside from the troubled theme park business, Ardent said its Main Event business was strong.

Over the next few months, Ardent will change its name to Main Event, which was approved by shareholders at last year’s annual general meeting.

Ms Thomas said the group would focus on the Main Event business, which operates as King Pin bowling, with upgraded food and beverage services, better shoes and improved premises.

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