Ardent Outlines Financial Battle Plan

Ardent Leisure has released its preliminary operating performance for FY17 and provided an update on its strategic priorities.

The company’s new chief executive, Simon Kelly, will deliver Ardent’s long-awaited strategy plan today, which investors hope will help steer the direction of the troubled group, The Australian said.

“Our objective is to optimise each business operationally and strategically, with a singular focus on delivering sustained growth in long-term shareholder value. Achieving
this will create broader opportunities, but it is important right now that we get ‘match fit’,” Kelly said.

“We have outstanding businesses with significant potential and the executive team and I are fully focused on ensuring we comprehensively deliver on realising that considerable potential for our shareholders.”

The Australian reported Ardent revealed its Main Event rollout will be slowed dramatically despite being earlier flagged as a future driver of growth.

The continuing businesses – Main Event, Theme Parks, and Bowling and Entertainment – expect to report revenue of A$499 million (up 4.5%) and Core EBITDA of A$57 million (down 41.7%) primarily as a result of the Dreamworld incident.

“From my relatively early days in the business, it is clear that there are many opportunities for us to do better. We are firmly focused on these opportunities which will deliver significant value upside for our security holders,” Kelly said.

“Main Event’s results are disappointing and provide plenty of opportunities for improvement. Dreamworld has faced very challenging trading since re-opening but is firmly on the path to recovery, however this will take some time.

“Our Australian Bowling and Entertainment business continues its successful transition from a more traditional bowling business to a multi-faceted entertainment business.”

Ardent expects to report revenue of A$586 million for the year ended 30 June 2017, down from A$688 million in the prior corresponding period (pcp). The 14.8% reduction in revenue reflects a number of key factors: the closure of Dreamworld for 45 days following the tragic incident in October 2016 with significantly reduced visitation after re-opening, and a significantly reduced contribution from the Health Clubs business after its sale during the year, partially offset by growth in Main Event reflecting the increase in the number of open centres.

Core EBITDA is expected to approximate A$76 million, slightly exceeding prior guidance of A$73-75 million. This outperformance was driven by a stronger than anticipated finish to the year by Main Event.

In 2016 Ardent announced the successful conclusion of the sales process for the d’Albora Marinas portfolio, which composed comprises seven high profile marinas for a sale price of $126 million. The sale price represents an 11.0% premium over current book value of $113.5 million.

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