Ardent Leisure Group (ASX:AAD) released its Investor Presentation report on Thursday, which underscored strong earnings in its Main Event division. The company reported that third quarter year to date earnings before interest, tax, depreciation and amortisation (EBITDA) were up 63.7 per cent compared to the previous corresponding period. Its Bowling division was up 3.3 per cent on the same period. However, its Marinas, Theme Parks and Health Club divisions were all down. In particular, its Health Club division continued to faced headwinds and EBITDA for the division fell 16.9 per cent.
Ardent posted half-year revenue of $61.59m, which was up 52.7 per cent compared to the previous corresponding period. Total EBITDA for the half-year came to $13.35m, a 55.9 per cent increase. The reported noted that lower gas prices boosted its businesses across the board. The rollout and remodelling of new Main Event stores boosted exposure and profits for its best performing division. Its Health Club division continued to struggle due to competitive pressures and member retention. However, there was a marked improvement after Ardent moved towards a 24/7 operating model. The company plans to continue rolling out this new operating model for its Health Club division.
The report also noted that board members hoped that a lower Australian dollar would encourage more visitors. “Continued growth in Australian domestic visitor trips predicted due to expected decline in Australian dollar,” the Investor Presentation said. Plans to build the $1 billion Coomera Town Centre are set to complete some time in 2017. Shares Ardent Leisure have fallen 1c, or .47 per cent, at $2.14 per share around 2:01pm on Thursday. AAD has fallen 19.55 per cent in the last 12 months and 26.71 per cent so far this year.
Author: Imran Valibhoy
May 28, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.