Ardent Leisure Group (ASX: AAD)

Is any momentum building up?
Ardent Leisure Group recently provided its Chairman’s and CEO’s addresses to shareholders at the 2017 Annual General Meeting, and highlighted about the sale of the Goodlife Health Clubs (part way for a profit of $45 million) and d’Albora Marinas (for a profit of $5 million). The sale of Health Clubs was a key contributor to revenue falling 14.8% to $586 million while the closure of Dreamworld for six weeks, Main Event’s underperformance in the United States and flat trading results for the Bowling & Entertainment also impacted the result. However, the group emphasised that revenue from its continuing businesses, namely, Main Event, Theme parks and Bowling & Entertainment, still managed to surge by 4.5% to $499 million despite the reduced contribution from Dreamworld. While core earnings before interest, tax, depreciation and amortization (EBITDA) were down, the group could reduce its net debt from $300 million to $100 million based on asset sale. For Main Event, the group now expects to have 4 centre openings in FY18, including Knoxville, despite some impact that its centres suffered due to recent hurricanes in Texas and Florida as AAD is well covered by insurance for lost revenues and damage repairs. It is worth noting that the group’s theme parks business is said to be trading above breakeven with a positive contribution expected over the remainder of FY18. It will be key to watch over the stock movement given any positive catalysts that might play a role in terms of performance improvement. AAD stock edged down by 0.3% on November 20, 2017.
 

Perpetual Ltd (ASX: PPT)

Leadership jitter
The diversified financial group, Perpetual Ltd slumped 1.1% on November 20, 2017 with the news that Geoff Lloyd will be stepping down from the role of chief executive officer (CEO) on 30 June 2018 after being with the company for over seven years. The time frame and handover arrangements seem to allow for a seamless leadership transition. This move appeared to be a very surprising one while the fund manager did not shed any light on the replacement. Lloyd has stated that while the company’s strategy is being built for the coming three to five years, the commitment over the long term from his end seems to be difficult and thus it would be an important time to hand over the leadership of Perpetual. It is worth noting that the group has been under pressure these days with challenges emanating from passive investing along with the rise of exchange-traded funds. PPT stock has been on a downswing by 10% in last six months, as at November 17, 2017.

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