Calls to rename Dreamworld, reinvent park
A LEADING share analyst has called for one of the Gold Coast's most prominent theme parks to be renamed.
CCZ Equities analyst Roger Colman said Dreamworld, still struggling more than 20 months after the Thunder River Rapids Ride tragedy that claimed four lives, badly needed to be reinvented.
Mr Colman's comments came after Dreamworld operator Ardent Leisure released a financial update showing it will suffer an $84 million to $94 million loss in the past financial year, more than $20 million worse than FY17's loss of $62.6 million.
"Dreamworld and SkyPoint revenue is down more than one third from its peak and does not look like recovering," he said.
"That's a result of discounted pricing and lower traffic."
Mr Colman said the current share price, which fell 6¢ to close at $1.95 yesterday, was a fair reflection of its current value.
"It is not worth much more than the current price," he said.
He said there is future downside for Dreamworld and Ardent from future hearings as part of the inquest into the 2016 tragedy at Southport Coroner's Court.
"We are going to see a rebrand of Dreamworld and expenditure behind the scenes until this whole thing is brought up to scratch," he said.
"They should start with a new title for Dreamworld."
Mr Colman said he does not think a major Hollywood studio would buy the park because the catchment area is too small. Nor did he think the land would be rezoned to housing.
"It is likely to remain, if not a theme park, at least something close to a theme park," he said.
"The State Government would be nuts to have something that provides this amount of jobs evaporate because no one would be able to assemble a block of land of this size again (for a theme park)."
Yesterday's financial update shows that Dreamworld continues to struggle following the 2016 tragedy.
Ardent Leisure said that cuts to the value of Dreamworld plus impairments on its US entertainment centres business weighed on its full-year loss.
Ardent has cut $75 million from the value of Dreamworld and flagged a non-cash impairment charge of $38 million related to five leisure centres in the US, based on preliminary, unaudited results for the year ended June 26. The company's theme parks division is forecast to book a loss of between $91 million to $95 million for the year ended June 26, compared with a loss of $98 million a year earlier, hurt by lower revenue and poor weather.
Its Main Event division - which has 41 bowling and games centres across the US - is forecast to book a drop in annual underlying earnings to $12 million to $15 million, down from $46 million a year earlier, due to the $38 million impairment charge as well as pre-opening and restructuring costs totalling $12 million.
Main Event's preliminary, unaudited results showed a lift in revenues to between $355 million to $357 million in the past financial year, up from $299 million in the 2017 year.
Overall revenue from the US entertainment centres unit is expected to grow about 18 per cent but constant centre revenue, on a like-for-like basis, edged up just 1.6 per cent.
Ardent's trading update comes a month after Dreamworld chief executive Craig Davidson, who was in the position at the time of the disaster, resigned.
Ardent chief experience officer Nicole Noye has taken over as acting CEO of theme parks until Mr Davidson's replacement has been found.
Ms Noye will be supported by two new executive appointments of Phil Tanner as director of safety, and former Queensland Police Inspector Mike McKay as director for culture, community and external relations.