Release Date: August 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Visitation to Coast Entertainment Holdings Ltd (ASX:CEH, Financial) venues increased by 14.3% year-over-year.
- Revenue for FY '24 rose by 3.8% to $87 million, driven by a 3.1% increase in ticket sales.
- EBITDA for the Theme Parks business, excluding specific items, increased by 56.4% to $7.4 million.
- SkyPoint achieved its best revenue and EBITDA performance on record.
- The company has a solid balance sheet with no debt and $89 million in cash.
Negative Points
- High interest rates and persistent inflation have created cost pressures and dampened discretionary spending.
- Severe storms caused significant damage and trading disruption during the peak summer holiday period.
- The group recorded a consolidated EBITDA loss from continuing operations of $4.6 million.
- Deferred revenue increased to $12.1 million, indicating future revenue recognition challenges.
- International attendance remains below historical norms, particularly from key markets like China.
Q & A Highlights
Q: One of the key questions I had was around July because it seems that the year has started strongly. There seem to be five weekends in the PCP and four weekends in this year's July. Have you made any adjustments to that? Or is it normally that kind of implies that maybe the results are a bit stronger given you had less weekends in this year?
A: Nick, yes, look, you're right. I think even if we take that into consideration the numbers are, and I'm sure Jose can go into a bit more granularity here, but the numbers are still very strong for July. As you've heard us say before, we just don't like looking at one month and then thinking that's going to make us the year. There are some very key things that we can point to in terms of the July performance, as I've outlined. First of all, obviously, the deferred revenue balance that we've outlined is still very high. That's a result of good work that we've done in the past, and clearly, the focus for us is continuing the good work to maintain the revenue -- deferred revenue balance going forward. We also can point to very clearly these EBITDA accretive Snowy Nights events, and they did. And I'm not going to go into the detail as to individually what they contributed to EBITDA for July, but they were successful to the point where we will be talking about doing more of those things and leveraging off the investment we put into our core event business through the year with that kind of similar initiative. But again, I think the other big focus for us, and it is an enduring focus, has just been around the significant focus on cost out and visits in the business, and always at the without focusing on reducing any of our safety initiatives, which is obviously front of mind. But, Jose, did you want to add anything further to that?
Jose De Sacadura: Yes, just 1 point, Nick. We operate a retail reporting calendar, so that means that we have 13 weeks in every quarter. The first month of the quarter is five weeks, followed by two, four week months. So, July is always a five week month for us. So, in fact, there have been five whole weeks, five weekends in both the prior July and the current July. So they are like-for-like in a perspective.
Q: Okay. That's helpful to understand. And then, I guess, ticket sales were flat on PCP in July. I don't know if there's anything to draw into that. When do you normally see the bulk of kind of annual pass purchases happen? Is there anything you'd kind of take from that start?
A: Yes. Look, I don't want to go into too much granularity, Nick, but I think it's appropriate I give you a little. I think when we look at the destination has been struggling a little bit and we see that in certain demographics particularly. What I can say is that, whilst ticket sales were generally flat, some channels performed better than others and particularly for us, the annual pass channel did. That's important for us because, again, the performance that we get out of annual pass is enduring. If we miss a single day ticket sale today, that hurts and we want to get it. But at the end of the day, if we can sell an annual pass, as I've said, ad nauseam now, annual passes are the one ticket we want to sell for all sorts of reasons. It's the highest face value ticket that we sell. And there's clearly an opportunity for us through a repeat visitation to garner higher net yields out of annual passholders and otherwise, would offer single-day guests. And I think more importantly as well is that, we've already acquired that customer. So the notion that we've got them with us, the key job to do for us is then to retain them in our ecosystem, and we've got a lot of activity happening here to do just that.
Q: Okay, great. And then, you mentioned public consultation has completed. Was there anything to draw out of that on the land repositioning? Were there any commentaries that would cause you concern?
A: No, there was four objections. I can tell you, and I follow this very close in the Gold Coast, as you would imagine, that development with four objections to it is a pretty good day on the Gold Coast, to be frank. Look, two of the objections were from local residents. We treat them as seriously as any other objection. I think in both of those cases, I think an appreciation of exactly what we're trying to do here at Dreamworld, particularly wasn't quite understood. I think, in some cases, there was a view that the application was predicated on the notion of closing the theme park. That's not clearly our plan. There are two other objections by largely commercial applicants. And I can tell you quite clearly that we reject every element of those objections. We feel incredibly strongly about our application. And to that end, we continue to pursue it. And again, the outline around dates that I've mentioned is our best guess. Gary and I continue to monitor this very closely. We continue to engage with stakeholders at council. Then again, there will always be objections to these kind of things, but we feel extremely strongly about our position, and we don't believe those objections hold any water.
Q: And then, in terms of ongoing CapEx, can you talk through any early signs on the broadening or change in demographic mix from some of the money that you spent? Or is the bulk of that benefit in terms of broadening age applicability likely to come at the once all the projects are completed?
A: No, we've already seen some good performance. Again, the second half, and I don't want to talk about weather any more, to be frank, about enough of it. But the second half result was particularly strong, given all of the reasons why it shouldn't have been. And we attribute that to a few different things. But I think one of the things that we attribute it to clearly is that the Dreamworld flyer and also the Dreamworld kids land, in terms of Kenny and Belinda's Dreamland, have been very well received. Have we seen any particular changes around demo and things like that? Look, you can see, and it's no secret that we are targeting families front and center. We just believe that the breadth of families, wholesome family fun across the board, is a much more effective market for us. We'll always have something for thrill seekers. We already feel that we have a pretty good offer in that regard. So we've been clearly doubling down in that area. And we're seeing that, I suppose when we look at people coming into the park and the groups and the types of visitation we're getting, we're certainly seeing that. Will it change a whole lot with Rivertown? Look, I just think that we're going to get a lot more. Rivertown is largely in a very similar space. To be fair, it probably plays a little bit older. If you think about Dreamland and the Wiggles and things like that, they are
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
