Theme park owner asks for $51M
GOLD Coast theme park owner Village Roadshow is seeking $51 million from investors as it looks to cut debt and strengthen its balance sheet.
The company announced the capital raising this morning, after having flagged it yesterday, with principals John Kirby, Robert Kirby and Graham Burke committing to underwriting Village's entitlement.
They will be hoping investors come to the party, however, they are willing to cough up $21 million to make the capital raising a success.
Village said the $51 million will be used - together with the proceeds of the sale of Wet'n'Wild Sydney - to reduce the company's mountain of debt, with $375 million due to mature in December next year.
Village has also written down the value of its Gold Coast themeparks by $95 million, due to lower earnings and the sale of the Oxenford land where the parks are situated.
The company also updated its guidance for the past financial year, saying it expects pretax earnings of between $88 million and $92 million.
It is forecasting an after-tax loss of between $6 million and $10 million.
Despite the Dreamworld tragedy continuing to effect theme park numbers coming through the gates, Village said it expects a revised ticket pricing strategy to result in a substantial increase to ticket revenue this financial year.
Village co-chief executive and co-chairman Graham Burke said the company is focused on improving the performance of its core businesses together with cutting costs.
Cutting debt has been a priority for Village Roadshow, which, like rival Ardent Leisure, struggled in the wake of the tragedy at Dreamworld in October 2016.
Last week the company announced it was selling Wet'n'Wild Sydney for $40 million to Spain-based Parques Reunidos.
That followed a move last year to sell its half-stake in Singapore cinema business Golden Village for $165 million.
It has also sold, for $100 million, 154ha of land at Oxenford, which hosts its Gold Coast theme parks, under a sale and leaseback arrangement.
The company has also pumped money in to its Gold Coast operation, recently opening the Top Golf facility after a $35 million investment.
Village Roadshow has issued two profit warnings this year.
The company blamed already weak visitor numbers, compounded by a wet March and competition from the Gold Coast Commonwealth Games.