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Village Roadshow Theme Parks see declines while upcoming campaign details revealed

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Village Roadshow Theme Parks see declines while upcoming campaign details revealed

Today's half year results presentation from Village Roadshow has revealed an 8.4 per cent decline over the peak summer period for their Gold Coast theme parks and poor results from Sydney. The theme parks will unveil a major marketing campaign in mid-March.

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Its not just spending on new rides though. Capital expenditure is pretty much anything new, even includes things like renovations if they haven't already been budgeted/costed for. Pretty stupid when now is the time when parks should be putting more money into the experience, not just rides (though, for sea world they are in desperate need of new rides for sure).

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Firstly it's worth reiterating that this isn't a knee-jerk cut of all expenditure but rather an apparent renewed focus on ROI.  It's also worth pointing out that despite the attendance hit they took this period, VRTP is performing OK in comparison to other divisions and the company suggests they have every confidence that the post-Thunder River Rapids pain will be short-lived.

A very simplistic way of looking at major theme park CapEx as it stands (or stood):

  • FY17 - Doomsday
  • FY18 - Coaster
  • FY19 - Topgolf
  • FY20 - Sea World attraction

Simplistic because some of these investments are clearly spread over several years, include expenses that would predate this timeline, and of course major attractions only form a piece of the CapEx at the theme parks.

The coaster is well underway to the point where it is inevitable. The company seems committed to Topgolf as it featured heavily in today's presentation and was referred to favourably in the context of this tightening of CapEx.

The 2019 Sea World attraction that has been hinted is likely be the next major attraction at the Gold Coast parks and would probably be structured to fall within the 2020 financial year. If there are major cuts to theme park investment then this would likely be the first casualty, but but there's a few things working in its favour:

  • The annual renewal drive really does rely on there being something new at one of the Gold Coast parks.
  • Sea World is next in line after a few Movie World-centric years, not to mention their dwindling attraction roster.
  • The dearth of rides at Sea World notwithstanding, Sea World will be just short of seven years since their last major animal attraction by December 2019. If there's a way to do an interesting major animal exhibit with minimal capital outlay and activist controversy then that's what I'd be looking for as a cash-strapped theme park operator.


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