Ardent Leisure Group

AAD Details

Slashes dividend for FY17: Ardent Leisure Limited (ASX: AAD) has announced an estimated dividend distribution of 1.0 cent per share for the second half of the year ending 30 June 2017, bringing the full year dividend to 3.0 cents compared to 12.5 cents last year. Cut in dividends reflects the losses at its theme-park division after a fatal accident on a ride at Dreamworld. Four people were killed in October on the river rapids ride at the park, Australia's biggest, on the Gold Coast tourist strip, while earnings visitor numbers have fallen sharply since.

Main Event is on track as new stores continuing to outperform return benchmarks: Main Event is on track to deliver another record fourth quarter, with expected unaudited revenues of US$60 million (up 20%) for the period from 1 April 2017 to 30 June 2017. However, on Like-for-like basis constant center sales growth for the fourth quarter is negative, but represents a solid improvement on third quarter trends. The trend has improved progressively through the second half of the year, with sequential month on month improvement during the fourth quarter. In addition, one planned FY17 store opening has been delayed into July and new store openings have been weighted towards the end of the year with five of the 10 new stores opened in FY17 opening in the fourth quarter. The underlying Main Event proposition remains very positive with new stores continuing to outperform return benchmarks, with average first year EBITDA ROI exceeding 30% and refurbished centers recording positive early results.

Main Event is now expected to contribute EBITDA of US$44 to 45 million for the 12 months ending 30 June 2017, while Theme Park division is expected to report an EBITDA loss of approximately $2 to 4million. Overall, the company expects to deliver full year core EBITDA of approximately A$73 - 75 million for the 12 months ending 30 June 2017.  AAD has moved up 30.7% in the last three months, while it was up 6.5% in the last one year (as on June 23, 2017). We give a “Hold” recommendation on the stock at the current price of $1.99
 

AAD Daily chart; (Source: Company reports)

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