Ardent Leisure (ASX: AAD) shares soared up about 11.85% on December 20, 2017 as investors were pleased that the group now aims to focus on its core Theme Parks and US-based Main Event Entertainment businesses and is selling the bowling and entertainment division to privately-owned, The Entertainment and Education Group for $160 million.

The division in discussion includes the AMF and Kingpin bowling centres, and Playtime arcades across Australasia. This move seems to value the division at a multiple of 27.1 times FY17 Core EBITDA less routine capex, and 32 times FY17 Core EBIT on a debt and cash free basis.

The group had expected to be in a net cash position by first half of 2018 and the recent sale upon completion is indicative of this target.

AAD will now focus on investing capital in areas that can help earn the most attractive returns, and has been relieved from the requirement to make the significant further investment needed to support group’s strategy while providing an increased flexibility to continue the expansion of Main Event and the reinvigoration of Theme Parks through new attractions.

The embattled group that was smashed in late 2016 and 2017 (plunging 22.4% in last one year), seems to gear up for a better 2018 with enhanced capacity to execute the high-yielding Main Event business and reinvest in Theme Parks Business. We maintain a “Hold” on the stock at the current price of $1.935

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.