This article is from the Australian Property Journal archive
ARDENT Leisure Group’s fast-growing Main Event business will underpin its fortunes in the coming years.
Combined with increasing visitor numbers, the Main Event division fuelled core earnings growth, which was at 11% to $62.4 million, and a revenue increase of 15.6% to $687.6 million for the 2016 financial year as the group registered growth across all divisions. Its statutory profit rose 32% to $42.4 million.
“The result supports the board’s decision to continue prioritising investment in our high-growth, high-returning Main Event business, and implement strategies to improve the performance of our Australian divisions,” group chairman Neil Balnaves said.
“The recently announced sale of our non-core Health Club division underlines the Board’s commitment to consolidate the Group’s position as Australia’s leading international entertainment business.
“Repositioning our portfolio in this way significantly strengthens the Group balance sheet, provides capacity to support our five-year, targeted roll-out of Main Event centres, and gives us the flexibility to pursue disciplined investment in Theme Parks and Bowling, that meet our return hurdles,” he added.
The group’s Main Event business will remain just that, with chief executive officer Deborah Thomas saying there would be a “laser-like focus” on the division over the next year, and the portfolio size planned to grow by 11 centres in 2017 and by between 30% and 40% annually.
The opening of seven new Main Event centres in the US drove growth in USD EBITDA of 18.7% to US$43.5 million, with Main Event USD revenue rising 21.6% to $US$174.7 million.
“Critically, the centres we opened in FY16 are on track to exceed our EBITDA investment hurdle of 30% ROI, which we have consistently achieved since launching Main Event’s accelerated expansion roll-out in 2012,” Thomas said.
The division’s performance was slightly dented by its concentration of centres in Texas, which was affected by a “difficult US casual dining macro environment” in the second half, increased competition, “conscious cannibalisation”, weaker event sales and underinvestment in legacy centres.
However, Ardent will continue to target growth of between 2% and 4% for constant centres in the longer-term.
Visitor numbers to its theme parks saw the division’s revenue grow by 8% to $107.6 million and EBITDA increase by 8.5% to $34.7 million.
Its food and beverage category returned 13.1% growth and retail 12.5%, with entry revenue up 7.9% has Chinese tourists led visitor growth across domestic and international markets.
The bowling division’s revenue increased by 12.0% to $130.5 million and EBITDA by 30.3% to $130.5 million as the group continued to diversify its entertainment experience at venues, in the same vein as its Main Event centres.
“Bowling was a standout performer in FY16, reporting four back-to-back quarters of constant centre revenue growth as management continued to transition the business from traditional bowling into a multi-attraction entertainment experience,” he said.
Ardent converted 45 Goodlife Health Clubs to 24-hour operation, which spurred higher membership numbers, and growth in EITDA by 7% to $30.1 million and in revenue by 5.1% to $187.6 million.
Its d’Albora Marinas returned slight growth in revenue to EBITDA to $23.0 million and $10.2 million respectively.
Australian Property Journal
