Village Roadshow First-Half Profit Rises as Key Investors Plan to Sell Stock
SYDNEY -- Australian entertainment conglomerate Village Roadshow Ltd. on Thursday reported an 18 percent profit increase for the first half of its fiscal year.
Revenue also rose thanks to record attendance at its theme parks, as well as more modest gains in its film exhibition and distribution businesses, the company said.
While the company bucked a downturn in Australian media, trading in its stock was halted Thursday after its major shareholders, Village Roadshow Corp. (VRC) and directors Robert Kirby and Graham Burke said they would sell up to 11 million shares, or 7 percent, of their stake in VRL. VRC and its directors will retain a 44 percent majority stake in the company and said they have no intention to sell their remaining holding.
"The sale is being undertaken to further increase the free float and liquidity of Village Roadshow," the company said.
VRL reported a profit of $32.2 million for the six months ending Dec. 31, up from $27.1 million in the year-ago period. Revenue increased nearly $10 million to $461 million.
"The world is in the mood to go out, to indulge themselves in a little pleasure and escape from worries,” said CEO Graham Burke. “The theme parks have once again demonstrated they are a winning formula, and the appetite for filmed entertainment appears unquenchable."
Visits to the group's Australian theme parks on Queensland’s Gold Coast increased 26.8 percent, driven by good weather. Earnings increased 10 percent to $42.3 million. The company is developing other theme parks in Sydney, China and the U.S.
A modest increase in admissions, higher average ticket prices and higher per-patron spending on food and beverages in Australia also boosted profits at its cinema division by 12 percent. After a poor first quarter, box-office revenue rebounded in the last two months of 2012 thanks to the release of Twilight: Breaking Dawn -- Part 2, Skyfall and Madagascar 3, the company said.
Roadshow Films, the company’s Australian film distribution arm, enjoyed a marginal increase in earnings thanks to its market-leading 24.5 percent share of the local box office and key relationships with suppliers -- in particular, Warner Bros. The highlights for the first half of the fiscal year were The Dark Knight Rises, Argo and The Hobbit: An Unexpected Journey.
While production entity Village Roadshow Entertainment Group, in which VRL has a stake, saw no new releases in the fiscal half, VREG renewed its Warner Bros. co-production deal for another five years in November -- bringing the relationship to the two-decade mark. It also upsized and renewed its film-financing facility to $1.1 billion over five years. That will allow VREG to release around six to eight Hollywood films a year.
Upcoming releases include Baz Luhrmann’s The Great Gatsby; All You Need Is Kill, starring Tom Cruise and Emily Blunt; Lego; Mad Max: Fury Road; and the Wachowskis’ Jupiter Ascending.
VREG unit Village Roadshow Pictures Asia, meanwhile, is enjoying success with Journey to the West, which is breaking Chinese box-office records, while its other release, 101 Proposals, sits at No. 2 in China’s box-office rankings. Another Chinese feature, The Man of Tai Chi, is slated for release in June or July. Overall, three to five releases a year are expected from VRP Asia.
Village Roadshow has forecast its full-year operating profit would come in at between $52.8 million and $57.8 million.