THE latest theme park on the Gold Coast has proved to be a popular money-spinner for entertainment group Village Roadshow.
Australian Outback Spectacular has operated at more than 95 per cent capacity since opening in April, justifying its $2.5 million establishment cost, the company said yesterday.
Yet Village Roadshow reported a full-year net loss of $35.1 million for the year to June 30, down from a $49.3 million profit the previous year, with film production proving the biggest drag on its bottom line.
The division, which produced five films including Firewall, staring Harrison Ford, delivered a $32.3 million pre-tax loss, after last's year's $11.5 million loss.
Despite the success of Outback Spectacular, and the move to full ownership of theme parks, pre-tax profit from the division fell more than 50 per cent to $7.8 million because of one-off costs.
It generated increased profits and patronage at its Warner Bros Movie World, Wet'n'Wild and Paradise Country attractions on the Gold Coast. Only Sea World posted a decline in attendance but plans are afoot to open new attractions in December.
The company, which also includes cinema exhibition and radio divisions, stressed that its net loss was in line with market guidance.
Managing director Graham Burke vowed to continue restructuring and simplifying the business. "Whilst we have incurred some one-off expenses during the year, our focus has been on positioning our businesses to best pursue growth opportunities, reducing the risk profile of the group and simplifying our structure," Mr Burke said.
But one analyst said the market had grown sceptical about Village Roadshow's prospects and institutional support had dwindled. "There are always one-offs in the Village result. They've got some good underlying businesses with the theme parks and radio assets but they've spent years cleaning up the cinema portfolio," he said.
The company decided against paying a dividend and its shares dipped 2¢ yesterday to close at $2.41.
Earnings before interest, tax and depreciation fell from $197.4 million to $174.2 million, the restructuring program creating a net loss of $37.4 million in material items and $17.8 million in losses from discontinued operations. A pre-tax loss of $39 million related to the restructure of the troubled film production division and settlement of legal claims.
The cinema exhibition profit plunged from $17.8 million to $1.3 million despite the success of hit movies such as The Da Vinci Code, Ice Age 2, Walk The Line, X -Men 3 and Cars. The decline was attributed to one-off expenses concentrated largely in Greece and Italy.
But film distribution generated a $16.7 million result, down slightly from the previous year. The company kept a lock on about 23 per cent of box office revenue on the back of hit films such as Harry Potter and the Goblet of Fire and Charlie and the Chocolate Factory.
Village said coming release Happy Feet, a computer-generated film about a dancing penguin, was likely to be a success at the box office.
The George Miller-directed film features the voices of Robin Williams and Australians Hugh Jackman, Nicole Kidman and Hugo Weaving.
Village's investment in radio group Austereo also added value, with earnings before interest and tax increasing by 3.4 per cent.
Chairman John Kirby urged investors to stick with the company. "The world of entertainment changes rapidly, always has and always will. The massive restructuring over the last year is to position Village Roadshow for a strong future. The board of directors has great confidence in that future," he said.
