Village Roadshow slashed its profit guidance and its shares dived

Source: Star Wars/Lucas Films

Shares in Village Roadshow fell hard after the entertainment group cut its full year profit outlook, predicting, at best, a break-even result.

A short time ago, the shares were down 11.7% to $2.78.

The company says its two main divisions, theme parks and cinemas, have continued to experience challenging trading conditions.

Village Roadshow says it expects financial year net profit after tax before material items and discontinued operations to be between break even and a loss of $10 million. Previously, it expected a profit of $12-17 million.

“As previously reported, Cinema Exhibition experienced a slow start to the financial year which, together with a softer than expected March 2018 result,” the company told the ASX in a trading update for the nine months to March.

“VRL continues to expect this division will realise a partial recovery in the remainder of FY18 as major releases such as Avengers: Infinity War, Solo: A Star Wars Story, Deadpool 2 and Jurassic World: Fallen Kingdom are all scheduled to be released in the last quarter of the financial year.”

In its half year results released in February, the company called out streaming media competitors Netflix and Stan affecting its business.

And its theme parks on the Gold Coast are still being restrained by the impact of the Dreamworld tragedy. Four people died in October 2016 on the Thunder River rapids ride at the Ardent Leisure-owned Dreamworld when two rafts collided.

For the half year, attributable net profit after tax was $171.9 million.

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