Parkz News

Dreamworld's fatal incident costs owners $95 million

18 posts in this topic

90 million is a hell of a lot of value to write off. The park now stands at well under $200 million... mKes me wonder if they are preparing to sell off... the R&D capex is also at the lowest of all divisions. 

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That's a significant amount to write off.. Given the age of the attraction you would think it would have very little value remaining.

It will be interesting to see what the difference is between the Merlin incident and the Dreamworld incident over the longer term. Whilst Dreamworld was a multiple fatality incident, in terms of PR the Merlin incident may be worse. It's left some highly visible long term impacts. IE every time one of the victims who lost a limb makes a public appearance, it dredges it up in a very visible manner. Whereas the impact of the Dreamworld fatalities is somewhat hidden in that it's a mental impact on the families.

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More concerning then I thought... The book value on the ASX release is $146.8 million, in 1989 it sold for $180 million... That's a $33 million loss AFTER 27 years of inflation... 

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Looks like they've taken a big hit to make sure it's only a once-off impact, seems like Ardent are being very conservative here as well. I'd expect to see this adjusted in the full year results depending on how the park trades over the second half.

Reading the detailed numbers though, seems like the park has been doing OK. Still making money, attendance is down but not by as much as you'd think (probably 10-12% after you factor in the closure period) so recovery might happen sooner than people expect.

Only disappointment is no hints of any new attractions in the works anytime soon. Would have at least expected a "we're working on a plan and will announce it in the next x months" sort of comment there.

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2 hours ago, aaronm said:

Reading the detailed numbers though, seems like the park has been doing OK. Still making money, attendance is down but not by as much as you'd think (probably 10-12% after you factor in the closure period) so recovery might happen sooner than people expect.

Attendance was down 63.5% in December from opening vs same time last year (i.e. last 20 days of each period).

Then down 44% in Jan y-o-y.

Then down 35.5% in Feb to date y-o-y.

Rate of decline is clearly easing but hit is much, much worse than 10-12%.

As a comparison Village's decline in Feb is running around 8%.

Also need to remember that Ardent book 100% of pass revenue on the first visit. Given pass promotion is in May/June (end of fiscal year) this means a far higher proportion of ticket revenue is booked in 1H and 2H relies heavily on in park spend (which is directly linked to visitation). 

Given they have extended passes another 6 months also the revenue impact of the incident is also going to be felt in 1H18 as many passholders will have no need to renew until Dec 17.

Re new rides I wouldnt hold my breath. Ardent's Main Event business is now underperforming so in addition to c$120m of expansion capex for new centres they will have to spend a lot of capex to refurbish centres and get back to positive same centre sales.

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Having said that though I think they NEEDED to extend passes by 6 months.  No one would have renewed, they need people to go back and start feeling normal about being there before they can hope to start charging for passes. 10% of people wanted refunds, to me that's about how many people you'd expect to hear say stuff like 'I'm never going back'.

 

The question is how much they're willing to ride it out.  This year is a write off, what happens next year?  They'll still be down but will it recover enough to decide to keep going with the park is a big question right now.  My advice is if you want the park to be their in a few years, then get your butts down there and spend some money.

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55 minutes ago, joz said:

The question is how much they're willing to ride it out.  This year is a write off, what happens next year?  They'll still be down but will it recover enough to decide to keep going with the park is a big question right now.  My advice is if you want the park to be their in a few years, then get your butts down there and spend some money.

I think that is a fair summation.

Given Village's prodigious debt load (3.5x Net Debt / EBITDA) I'd suggest people also support their parks if they want any new rides post the hyper coaster (I'd suggest the banks are making some threatening noises currently).

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3 hours ago, joz said:

Having said that though I think they NEEDED to extend passes by 6 months.  No one would have renewed, they need people to go back and start feeling normal about being there before they can hope to start charging for passes.

I completely agree with you. Much better to keep your existing passholders and hope for them to visit to keep in-park spend up than to have them churn out and have to aggressively discount the headline pass price to replace those members.

I'm just noting that because they book all revenue on first visit (unlike Village that apportion it across the pass validity period) this will hit the ticket revenue falling into 1H18.

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13 hours ago, Bush Beast Forever said:

Attendance was down 63.5% in December from opening vs same time last year (i.e. last 20 days of each period).

Then down 44% in Jan y-o-y.

Then down 35.5% in Feb to date y-o-y.

Rate of decline is clearly easing but hit is much, much worse than 10-12%.

One point i'd like to make here though is that the majority of their Dec-Feb visitation tends to be holiday makers. Many passholders tend to avoid the parks over the busy summer period - because they can usually go anytime when it's quieter.

With the incident occurring just as holiday makers would have started to plan their itinerary (accom would have been booked already) - many would have decided to go with Village, or alternative attractions to DW at least, because of the uncertainty of knowing if\when it would reopen (especially since ticket sales were also suspended during the closure period). By the time they had reopened, the damage for the season had already been done - so I completely expected to see visitation down for that reason. Village had a slight drop, but this can be attributed to those 'extreme' reactions of 'i'll never go on a ride again' - but unlikely to make a big dent overall over time.

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That's not all that accurate. Most of the downturn in the parks (obviously exclude the period Dreamworld was closed) was in the local market. Holiday makers tended to keep their plans.

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3 hours ago, djrappa said:

That's not all that accurate. Most of the downturn in the parks (obviously exclude the period Dreamworld was closed) was in the local market. Holiday makers tended to keep their plans.

Yep, from memory both VRL and Ardent half yearly's mentioned that downturn was local market predominantly.

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