It is very rare for the consequences of one companies actions to have such a profound impact on another. The tragedy at Dreamworld (owned by Ardent Leisure) saw a huge drop off in attendances to Village Roadshows theme parks.
Village Roadshow’s shareholders suffered far more than Ardent Leisure’s due to their higher levels of borrowing resulting in greater exposure to a downturn in attendance at theme parks. Village Roadshow owns Seaworld, MovieWorld, Wet n Wild, Top Golf, Paradise Country and Outback Spectacular. Sales got hit big time and the debt situation only got worse when the profits didn’t roll in.
Village Roadshow has had to fix its balance sheet by scrapping dividends, selling assets and raising additional capital. I think the stock has now hit a bottom and time does heal all wounds. Village Roadshow is no longer discounting tickets; so there are no 2 for 1 deals. I even notice that the price has gone up about 30% for the season pass. Not to mention going to Wet n Wild in the winter school holidays and experiencing the long line ups.
I think the stock has hit a major bottom and is trading far below replacement costs. Just think how much it would cost to build all of those theme parks. It has been a rollercoast ride for existing investors, I liked this stock and recommended it a couple of years ago due to the exposure to tourism on the Gold Coast along with Mantra which turned out to be great trade. I think investors should average down and new investors should BUY. Last sale $1.91
No need to be scared. The future looks good again for Village Roadshow
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