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Village Roadshow Theme Parks Financial Issues

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Village Roadshow Theme Parks appears to be in a desperate financial position.  They already sold off the land under most of the Gold Coast Austrailia theme parks in December and Wet'n'Wild Sydney was recently sold at a loss to Parques Reunidos.  The only assets left to sell outside of park lease/operating rights are a majority ownership stake in Wet'n'Wild Las Vegas and the Sea World Austrailia park.  The financial issues seem to have been caused by taking on too much debt and a nearby theme park (Dreamworld) having a deadly accident that caused theme park attendance to tank in a region where most of Village Roadshow's theme parks are based.




Village Roadshow in a world of pain with theme parks


Written on the 10 July 2018 by Nick Nichols


Village Roadshow (ASX:VRL) remains in a world of pain due to its struggling theme park operations, prompting the company to write down the value of its Gold Coast tourism assets by $95 million.

The writedown is part of $166 million in total impairments to be included in the FY18 financial results, with $25 million of that attributed to the $40 million sale of Wet 'n' Wild Sydney announced last week.


Village Roadshow has revealed that $74 million of the writedown total stems from last year's $100 million leaseback arrangement with LGIAsuper for its Movie World site on the Gold Coast. An additional $21 million is attributed to lower earnings from its Gold Coast theme park portfolio.


The knock-on effect of the Dreamworld tragedy continues to hurt Village Roadshow's theme park operations which also suffered low attendances over the Easter school holidays which combined with weak results during the Commonwealth Games.


As a result, Village Roadshow is forecasting a net loss of between $6 million and $10 million for FY18 after also taking into account $9 million in restructuring costs.


That has prompted the group to seek a capital raising, with the announcement today of a $51 million non-renounceable entitlement offer.


The fully underwritten offer of five shares for every 26 held is priced at $1.65 per share, or a 24 per cent discount to Village Roadshow's closing price last Friday.


Village Roadshow's co-CEO Graham Burke says proceeds from the entitlement offer will be used to cut debt and strengthen the company's balance sheet.


"Our primary objective for FY19 is to maximise operating and investment net cash flow through improving the operating performance of our core businesses, executing substantial identified cost savings across the group, limiting capital expenditure and potentially selling some remaining non-core assets," he says.


"Achievement of this objective would enhance VRL's financial flexibility to recommence the payment of dividends and execute on strategic initiatives."


While Village Roadshow's cinema exhibition division has also been hit by a lack of quality movie releases, the company is hopeful for improved earnings in FY19.


It is banking on higher receipts from blockbuster movies such as the new Avengers, Mamma Mia: Here We Go Again, Aquaman and Mary Poppins for the turnaround, along with lower capital outlays in the current year.


Meanwhile, it says the theme park business has actually experienced a rise in one-day pass sales since the beginning of this year, although at a lower premium due to deep discounting in the market.


The company believes overall ticket revenue will continue to rise despite the removal of discount resellers from the market at the end of June.


Village Roadshow is hopeful of an improved performance in FY19, driven by operating efficiencies in the theme park division and higher than expected forward bookings from its new Topgolf joint venture on the Gold Coast.




Wet ‘n’ Wild Sydney joins Parques Reunidos’ international portfolio

Jul 02, 2018 Joe Kleiman


Parques Reunidos has acquired Wet’n’Wild Sydney, the second most visited water park in Australiafor an amount of 40 million Australian dollars (around €25 million) plus a variable compensation that will depend on the park’s revenue performance. The transaction is expected to be completed in the next three months, subject to customary conditions precedent. This acquisition reinforces Parques Reunidos current position as the largest water park operator in the world.


Wet’n’Wild Sydney is the most modern water park in Australia, which opened in December 2013 and includes 40 state-of-the-art attractions, adapted to all kinds of audiences. The park has a surface of 24 hectares and is located in Prospect, 40 minutes away from central Sydney, the most populated city in Australia with 5.6 million inhabitants.


This acquisition in Australia is the first step for expansion in the southern hemisphere, significantly strengthens geographic diversification and contributes to reducing revenue seasonality.


Wet’n’Wild Sydney will constitute a platform for growth in the region through further acquisitions and the development of indoor entertainment centers. Australia is an attractive market for Parques Reunidos with a growing middle class and a thriving tourism industry.


Parques Reunidos will leverage on its 22 water parks to implement its best management practices at Wet’n’Wild Sydney, thus improving its performance for the upcoming years. Wet’n’Wild Sydney has potential for expansion projects such as second gate or new theme areas, widening its offer and maximizing the value of the park.


“This is a unique opportunity for Parques Reunidos to access the Australian market, grow in the region through further acquisitions and develop indoor entertainment centers. Our group’s global presence includes operations and projects across Europe, the US, Asia, the Middle East and now Australia,” said Fernando EiroaCEO of Parques Reunidos.




Village Roadshow agrees $100m sale and leaseback of Gold Coast land


22nd December 2017
Village Roadshow has announced the sale and leaseback of 154 hectares of freehold land on Australia’s Gold Coast.

The $100 million deal includes the locations of Warner Bros. Movie World, Wet’n’Wild Gold Coast, Paradise Country, Australian Outback Spectacular, and Village Roadshow Studios and the land on which Australia’s first Topgolf venue is being built.


Altis Property Partners on behalf of LGIAsuper have paid $100 million in the deal which frees up capital to enable VRL to reduce debt levels and invest.


The terms of the long term lease agreement are for an initial 30 years with options for 6 further terms of 10 years each (ie a total of 90 years). Annual rent will start at $6.2 million per annum with reviews at 3% per annum.


In a report from the AFR Clark Kirby, chief executive of Village Roadshow’s theme parks’ division says, “We are committed to our theme parks business.  This sale and leaseback will unlock the value in these land assets, allowing Village to pay down debt and free up capital for growth initiatives such as Topgolf.”


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i hope warnermedia buys village roadshow theme parks

now they getting into the theme park business by opening a theme park in dubai and having halloween events in the backlot and with a skyway to the hollywood sign in the works

i think warnermedia owning village roadshow theme parks could make sense

and seaworld could buy the gold coast seaworld park.

Edited by harry2004
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