Theme park and film production business Village Roadshow has swung to a loss as it conducts due diligence on two takeover proposals for the company and fights the impact of challenging weather conditions and the coronavirus.
The business posted a net loss of $26 million in the six months through December after a small $2.4 million profit in the prior-year period. Revenue fell 7.3 per cent to $491.2 million, Village Roadshow said in a statement to the ASX on Friday.
Village Roadshow CEO Clark Kirby, son of executive chairman Robert Kirby, replaced long-time CEO Graham Burke at the beginning of the year.Credit:Fairfax Media
The loss included costs related to new lease accounting standards. Excluding those costs, profit almost halved from $12.8 million in the prior-year half to $6.7 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $59 million from $65 million.
Village Roadshow, which owns cinemas around the country and theme parks including Sea World and Warner Bros Movie World on the Gold Coast, said momentum was strong in the third quarter despite bushfires, flooding and a lack of international tourists caused by the coronavirus outbreak.
The company is expecting an earnings impact from the weather and coronavirus of $3 million for the second half and suspended its interim dividend, but executive chairman Robert Kirby said the business remained "cautiously optimistic" despite difficult trading conditions.
Village Roadshow's results come a month after buyout firm BGH Capital lodged a $770 million offer for the entertainment company. The business, led by high-profile former investment bankers Robin Bishop, Ben Gray and Simon Harle, proposed to buy Village shares for $4, valuing the business at more than $770 million. BGH Capital's proposal came after the ASX-listed company fielded a takeover offer from PEP worth $3.90 per share.
The company is conducting due diligence on both bids and said there was "no certainty that either proposal will result in a transaction".
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