Village Roadshow back in the black

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SYDNEY -- Australian entertainment company Village Roadshow Ltd. on Thursday reported net profit of AUS$45 million ($37 million) for the fiscal year ending June 30, moving into the black on strong performances at its theme park, cinema and radio divisions.

The rise follows a loss of AUS$40.7 million over the previous fiscal year.

Revenue for the year through June 30 remained flat at AUS$1.54 billion ($1.26 billion), while earnings increased 35% to $225 million ($184 million).

Strong results at three of five of VRL's key divisions were negated to a degree by an 8.4% drop in profit at its film distribution division and an AUS$55.8 million ($45.7 million) loss recorded by production subsidiary Village Roadshow Pictures Group.

The VRPG loss came despite the success of "Happy Feet," its co-production with Warner Bros., which earned AUS$400 million ($328 million) at the global boxoffice during the year.

That loss was largely the result of a joint decision between VRPG and Warner Bros. to close off a portfolio of films in August, a moved that incurred AUS$45 million ($37 million) in losses, the company said.

Village Roadshow Pictures and Warner Bros. put about 20 films they co-produce into financing portfolios, but the partners decided to close off what was known as "portfolio two" after just 10 films in order to "pursue growth opportunities with a new slate of films," the companies said.

The new slate, dubbed "portfolio three," includes "The Brave One," starring Jodie Foster, "I Am Legend," "Get Smart" and the Wachowski brothers' "Speed Racer."

Village Roadshow group CEO Graham Burke said the company is in "advanced negotiations" for a merger of its film production division with a leading company in the music sector, although Burke would not give further details.

VRL's theme parks booked profit of AUS$40 million ($32.8 million) for the year, a jump of more than five-fold, as the company took over 100% ownership of the parks.

Strong boxoffice and sales of several of its underperforming international cinemas pushed its exhibition business up more than threefold, to AUS$13.6 million ($11 million), with further growth expected from the launch of its premium Gold Class cinemas in the U.S. next year.

Film distribution profit of AUS$15 million ($12.3 million) was in line with expectations, Burke said. In the first half of the current fiscal year the company moved to 100% ownership of Roadshow Distribution.

Burke predicted that theme parks will be "overwhelmingly our biggest business in five years," with acquisitions and expansion "under investigation."
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