Australia | Apr 11 2017
Theme park and entertainment business Ardent Leisure will slow down the opening of new Main Event centres as it focuses on refurbishing legacy centres.
-Company cites need to execute better on existing Main Event sites
-Same centre revenue at Main Event still negative in March quarter
-Theme parks not expected to grow significantly in the near term
By Eva Brocklehurst
Theme park and entertainment business Ardent Leisure ((AAD)) revealed an improving trend in the March quarter at its key Main Event business but signals it will slow down the opening up of new centres as it focuses on refurbishing legacy centres.
Like-for-like revenue at Main Event was down -2.5% in the quarter but brokers note a sequential improvement, with March actually producing growth. As a result of a sustained period of no growth the company has decided to reduce the number of centres it is rolling out, citing a need to execute better at existing sites. The target for FY18 is reduced to eight from 11.
Refurbishing the remaining eight of nine legacy centres will consume a significant amount of time but is also expected to deliver a better performance. Meanwhile, theme parks recorded a decline in revenue of -34.3% in March, worse than the -33.6% decline in February, as heavy rainfall occurred during this period. Bowling revenue fell by -0.8%.
Weakness in the underlying Main Event business was attributed to competitive pressures and a challenging consumer discretionary environment in Texas, which represents 14 of the 19 centres. Highway construction also affected access to two of the centres.
Despite a lower roll-out in FY18, management expects new centre openings to re-accelerate in FY19 and maintains a long-term target of 200 centres, with the pace to be determined by the ongoing review of the business performance. Of the remaining nine legacy centres, three will be refurbished in the in the June quarter of FY17 and five in FY18.