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Village steps up with Happy Feet

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Village steps up with Happy Feet (Source Gold Coast Bulletin.

01Dec06 TWELVE months ago Village Roadshow was the market's 'kicking dog', but yesterday the company's directors put on their 'happy feet' at a back-slapping annual meeting. Chairman John Kirby said Village Roadshow had emerged from a year of change with full control of its Gold Coast theme parks, a raft of potential movie successes, a tighter cinema operation and a strong performance from its Austereo radio network. "This restructuring was a priority for your board and management because of the 'speed bumps' we hit with our international expansion in our cinema exhibition business," he said. Those speed bumps, which included big losses in its film production division, pushed Village Roadshow to a full-year net loss of $35.1 million in 2005-6. The result left shareholders empty handed with no final dividend announced, however the company put smiles on their faces last month with news that it would pay a 34c interim dividend and 15c capital return on December 4. But it was the Village Roadshow's next big hit, the animated feature Happy Feet, that extracted a bigger grin from shareholders at Movie World yesterday. The movie, directed by George Miller of Mad Max fame, has taken $US100 million in the first 10 days of release in the US. It was strong enough to beat another of Village Roadshow's big hopes for the year, the latest James Bond instalment, Casino Royale. But Mr Kirby said after the meeting that Village Roadshow Pictures was not a 'one-film business'. "It's terrific that Happy Feet is successful and that will be reflected in our results in years to come, but while the Happy Feet revenue is coming through we are going to be making films that lose money," he said. "The (statistics) are that not all films make money. "We have plenty of duds in our history, but also we have some great hits in our library." On the company's Gold Coast assets, which include Sea World, Movie World, Wet 'n' Wild and the new Outback Spectacular, Mr Kirby said the future remained positive despite the onslaught of the technological age. "The great thing about our theme parks is they do not face a competitive threat from new technology," he said. "You can't replicate on the internet the sheer thrill of a ride or the experience of a day out." Mr Kirby said Movie World had benefited from new attractions -- the Superman Escape and the Shrek 4D Adventure -- with attendances in the second half up 9.5 per cent on last year. He said the company also would benefit from full ownership of its Gold Coast assets which saw it buy out its US partner Warner Bros for $254 million earlier this year. It also has full ownership of the Sea World Resort with the exit of founding partner Nara in October. Even the Australian Shareholders Association was happy with Village Roadshow yesterday, with representative Andrew Aitken saying he looked forward to the company, which he said had become a 'kicking dog' for the media last year, 'building on what has been some hard-fought credibility'.
Ok, my thoughts on this are quite involved, so proceed past this point with caution; I'm pretty sure that if you look through some old posts on this site, your bound to come up with some anti Village Roadshow sentiment. Hell, a couple of years ago it wasn't just on this site, it was everywhere, Village seemed as if it completely lost the plot on everything they'd been doing. Well, in the last month or so they have come out and highlighted just what went wrong with the cinema operation expansion. Basically, in many markets there weren't many screens, and Village (like others) figured that if you increase the number of screens you would increase the number of cinema goers. Sadly that idea pretty much bombed everywhere (Australia, Greece and Singapore are listed as exceptions) and instead of growing the number of customers in these new markets, it was just same critical mass divided over more screens. The company sustained substantial losses on its cinema operation division. That was a couple of years ago, and things as they stand now have progressed quite a way; the company sold off its under performing cinema's, and re-structured many of their own divisions, and most recently, bought out Warner and Nara's share of the theme park business, and now have 100% control there, and for a change, have what look like a string of hits. Even better then the Gold Coast Bulletin claims, according to the USA Today dated December 6, Happy Feet has topped the US box office for the third consecutive week, and has now netted more then US$140million. Where is this all going you ask? Well since buying out Warner's share of the theme parks, Village have really been doing a good job on the Gold Coast. The number of shows at AOS is going to 2 a night over Xmas, there are night events at MW and SW, as well as different events for WnW besides the Dive in Movies, and even the ticketing has been improved since Village's rule. Add to that the different new attractions opening this year, and various improvements in the way the parks are run behind the scenes, then its hard not to get excited about the way the Gold Coast parks will go in the future. But there's a catch, Village is now looking at expanding its theme parks business into Europe and possibly Singapore. Now correct me if I'm wrong, but isn't expanding one of the businesses overseas exactly what got them into trouble in the first place? I don't doubt they are a better theme park company then they received credit for, and the positive changes in the past few months are testament to that, but given the poor performance of the cinema expansion overseas, will a theme park expansion overseas net the same results? All I'm saying, is that if they do expand into Singapore and Greece (two of the sites indicated by the company, which also happen to be where they had the most success with the cinema expansion) they had want to know what they're doing.

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