The financial impact of the accident at Dreamworld on the Gold Coast, which killed four people, will be “significant”, according to its owner Ardent Leisure.
No one at Ardent leisure will put number on the impact on earnings, fielding questions as the company held its AGM in Sydney, by saying that it wouldn’t be appropriate at this time to speak finances on a “tragic accident”.
Ardent’s share price rebounded today. A short time ago they were up 9% to $2.18, making up some of the 14.9% fall yesterday.
The company did say that about 34% of total revenue generated by Ardent Leisure’s theme parks in 2016 has already been earned so far in 2017.
In 2016, 28% of the company’s total earnings came from theme parks. That added up to $107.58 million in revenue from Dreamworld, Whitewater and Skypoint.
CEO Deborah Thomas told the AGM that there will be a “significant impact” on earnings for the rest of the year.
“It is not possible for me to provide any further guidance at this time, however we will provide regular updates to the market with our trading figures during the next eight months to ensure that the market is fully informed,” Thomas says.
Analysts say the risk is that profitability will fall fast if there’s a sharp drop off in visitor numbers.
The key financial problem is that the theme park has fixed costs, with a minimum spend to open the doors each day, no matter how many visitors buy tickets.
Thomas later said: “The priority here is with the victims and their families and our thoughts and prayers are with them … and also our staff are shattered by this incident.”
The theme of not talking about commercial matters because of the fatal accident extended to discussion at the AGM of an annual bonus for Deborah Thomas.
Chairman Neil Balnaves said: “It is just inappropriate to talk about commercial matters at this point in time.”
The incentive payment, valued at more than $800,000, was voted on at the AGM. The votes were still being counted but the payment was expected to be approved.
Thomas said: “In terms of my performance rights, that is a question for the board, it is a question for the shareholders and it was voted today. It is not really the time to be discussing that right now under the circumstances.”
Pushed at a media briefing, Thomas said: “Four people died and we are all shattered by this.”
There were shareholder questions on the bonus, including from Alan Goldin, who is also the director of the Australian Shareholders’ Association.
“The optics are not good, definitely,” he said.
“The idea that there’s been this tragedy, four people are dead and at the same time there’s some big bonuses being paid … it’s not a good look.”
The company also voted on plans to change its name to Main Event in recognition of an increasing focus on its bowling alley business in the US, which has 27 centres, alongside the Kingpin and AMF brands.