Village Roadshow Ltd (ASX: VRL)

VRL Details

Impacted by Dreamworld Tragedy: For the year ended June 30, 2017, Village Roadshow reported a soft result at the back of material after tax items. There was a big fall in profit after tax (excluding material items and discontinued operations) to $23.6 million from last year’s figure of $50.9 million. EBITDA also slipped to $136.3 million from $168.8 million. The group’s performance was majorly impacted by the October 2016 tragedy at Dreamworld. The group is now focussing on new initiatives and intends to introduce a new seal show at Sea World and a new rollercoaster (DC RIVALS HYPERCOASTER). VRLS’s Cinema Exhibition division had an excellent FY17 year; however, the performance was slightly below the previous year which was an all-time record due to Star Wars: The Force Awakens. The group is also in conversation for the potential sale of its 50% stake in the Singapore cinema exhibition business, Golden Village, to mm2 Asia Ltd. Theme Parks business is also developing two major opportunities with customary Asian long lead times. VRL stock edged lower by 1.8% at the back of the result and has fallen over 8% in last one month. We give a “Hold” recommendation at the current price of $ 3.79


Result Summary (Source: Company Reports) 

McGrath Ltd (ASX: MEA)

MEA Details

Low real estate listings impacted the stock: McGrath’s stock plunged over 5% on August 24, 2017, post the announcement of its full year result that was impacted by challenging market conditions with low number of real estate listings. Underlying earnings for FY17 slipped by 5% to $15.6 million and net profit after tax plunged 42% to $4.9 million. MEA also reported for loss of a number of high performing sales agents in the Company Owned segment in December 2016 and January 2017. On the other hand, revenue of $129.4 million was up 7%. MEA has about $8 million cash on hand and no debt. The group’s annuity businesses, Property Management and Franchise, have delivered revenue and EBITDA growth year on year. The company has also announced about a share buyback program and its shares are expected out of escrow in few days from now. Given the scenario and MEA’s aim to improve the productivity and performance of each of the existing segments and exploring new revenue opportunities in adjacent property services, we give a “Hold” recommendation at the current price of $ 0.73

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