[The Decline Of Movie World]

On 13/04/2022 at 9:16 AM, Levithian said:

Yeah..... No.

Don't get it confused with the position Ardent was in. Village roadshow had money in capital but were also able to refinance loans if need be, they just said it would be irresponsible (to investors) to take on more debt at this time and were going to run as thin as possible to see out the covid downturn/closures. Ardent were told they have no options available to them, they had nothing to borrow against as they had sold off pretty much everything of value and nobody would issue them any credit. That's two vastly different positions.

Remember theme parks are just a division for village roadshow, they are also one of their businesses that actually makes a profit every year. You aren't going to sacrifice a core of your business when you have the potential to sell off other parts which aren't as/profitable, or borrow more and refinance existing debt. They had to take on more debt following the dreamworld accident and the huge downturn the industry experienced, this included their big spend items at movieworld and seaworld. In effect, what happened in 18-19 financial year is they sold off wet n wild sydney, they sold out of their cinema partnership in singapore and they sold the land movie world and wet n wild are built upon. Not only did they sell off properties costing them money, they received over 250 million from the sale of the above. This meant they reduced their liabilities over 90 million dollars, knocked 120 million out of their loans, earnings within the theme parks division doubled to 76 million (big recovery following the accident), the equity in the company actually went up 50 million, while the debt went down.

The plans over 2018-2019 also allowed them to refinance their loans which provided them with over 100 million to draw down on over the immediate future if need be. The end result for VRL was a net loss of 6.6 million, but if you dig further you'll see that cash flows increased by nearly 4 times to over 80 million, cash flows used for investments and to manage debt went up nearly 30 million, while repayment on their loans dropped over 100 million dollars. So you had a company that sold off underperforming assets, reduced not only their debt, but also their repayments, but were still investing money back into the company.

They were in an excellent position prior to covid, recovery was in full swing, revenues were well up, the equity in the company alone was valued at over half a billion dollars. Why do you think they attracted multiple buyout offers approaching 1 billion dollars if the company was so close to collapse?

At the end of the 2020 financial year it showed covid cost them an additional 70 million dollars. Remember that 100 million they could draw down upon? This is where the covid cost comes from, they drew down 70 million dollars on what is basically a line of credit to cover operational costs with multiple businesses shut and provide them funds to trade through into the next financial year when revenue was basically wiped out. They had more immediately available to them if needed, and that was before looking at refinancing on existing loans they had previous worked to pay down. All this was all before the government reached out with an offer of support too. Since the take over, the continued impact of covid and the fact that their cinema division was still basically shuttered, it cost another 38 million across the 2021 financial year.

They weren't even close to being on their last legs, they were still in a better financial position with lower amounts of debt and lower repayments to their loans even after covid came along and wiped out their revenue streams and generated additional debt due to running costs/overheads. Have a look at the covid 19 report Mittleman Brothers released and why they were unhappy with how much the company was actually undervalued during takeover offers. 

If that's all too much to read; have a look at net debt totals across the last 7 years. 

2020-2021 - 228.5 million

2019-2020 - 278.3 million

2018-2019 - 219.6 million

2017-2018 - 338.5 million

2016-2017 - 527.1 million

2015-2016 - 534.7 million

2014-2015 - 402.2 million

2013-2014 - 305.5 million

For reference, net debt is essentially gross (all) debt, minus available cash balances.  
 

This is a very simplified version of what actually happened. Having been in the boardroom before/during/after covid I can tell you it was a hell of a lot more complex and dire than this.

The group went very close to maxing out the existing debt facility mid 2020 before finally securing new financing. In July 2020 VRL was a very unappealing business to be sinking money into so this was far from a guarantee...and at the time it was burning $15m a month. 

EDIT: the government announced it would commit to supporting the business, and then provided no specifics about how and when this would happen.

[The Decline Of Movie World]

On 05/04/2022 at 9:50 PM, Rivals said:

if they were in a bad financial situation, they wouldn’t have been able to refurbish both road runner and WWF at the same time, build WNW’s new slide complex, introduce the new animal experiences to paradise country, refurbish Surfrider (even if it still isn’t open yet) or introduce new events such as Hooray for Hollywood. This also doesn't make sense as their other properties aren’t being run nearly as bad as MW. 

 

When dreamworld was declining, they copped a lot more and they weren’t cut any slack or had excuses made for them, so why isn’t it the same now they’ve swapped places?

Most/all of this spend was committed to before covid (and is being funded by huge debt).

At its worst point, the joint had a couple of weeks left to run before it was lights out.

It’s going to take many years before this is a healthy business, and right now there are much bigger priorities.

There are about 20 people on the planet that notice the trivial issues being discussed here and they’re all on this thread.

[The Decline Of Movie World]

Understand that the business is in survival mode. Things are improving (compared to being closed) but there is a long way to go.

Financially, the business is/was in very dire straits...it was on the precipice in 2020. They're trying to rebuild it from the ashes but that will take time and some of the cosmetic issues described here are taking a back seat while that happens.