Village Roadshow Ltd

VRL Details

The Australian theme park operations continued to be significantly impacted by the tragedy which occurred at Dreamworld in October 2016. While showing signs of improvement in the final quarter, it is now expected that the FY17 earnings before interest, tax, depreciation and amortization, excluding material items (EBITDA) for the total Theme Parks division will be approximately $55 million. As part of its year-end review of asset carrying values, VRL expects to recognize an impairment of the Wet’n’Wild Sydney assets of approximately $65 million pre-tax. The FY17 EBITDA for the Cinema Exhibition division is now expected to be lower than prior year which was a record performance. This includes the impact of the cessation of equity accounting of the Singapore Cinema Exhibition business, Golden Village from 1 June 2017, as a result of the previously announced sale of VRL’s 50% stake. Further, VRL has recently settled the long-running dispute relating to the Belfast cinema lease, and is now operating the cinema under a short-term arrangement. It is expected that there will be no further trading losses associated with this site. We give a “Buy” recommendation on the stock at the current market price of $4.16


VRL Daily chart; (Source: Thomson Reuters)

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