Coast Entertainment Holdings Ltd · ASX:CEH
Coast Entertainment — Ardent Leisure Group — FY2015 Earnings Presentation
48 slides from Coast Entertainment's earnings presentation, Aug 19, 2015
Slide 1: ASX Release: Ardent Leisure reports continued strong performance from Main Event
CONTACT DETAILS REGISTRY Level 16, 61 Lavender Street c/- Link Market Services Limited Ardent Leisure Trust Milsons Point NSW 2061 Level 12, 680 George Street ARSN 093 193 438 AUSTRALIA Sydney NSW 2000 Ardent Leisure Limited Telephone +61 2 9409 3670 Locked Bag A14 ABN 22 104 529 106 Investor Servic
Slide 2: ASX Release (continued)
CONTACT DETAILS REGISTRY Level 16, 61 Lavender Street c/- Link Market Services Limited Ardent Leisure Trust Milsons Point NSW 2061 Level 12, 680 George Street ARSN 093 193 438 AUSTRALIA Sydney NSW 2000 Ardent Leisure Limited Telephone +61 2 9409 3670 Locked Bag A14 ABN 22 104 529 106 Investor Servic
Slide 3: ASX Release (continued)
CONTACT DETAILS REGISTRY Level 16, 61 Lavender Street c/- Link Market Services Limited Ardent Leisure Trust Milsons Point NSW 2061 Level 12, 680 George Street ARSN 093 193 438 AUSTRALIA Sydney NSW 2000 Ardent Leisure Limited Telephone +61 2 9409 3670 Locked Bag A14 ABN 22 104 529 106 Investor Servic
Slide 4: ASX Release (continued)
CONTACT DETAILS REGISTRY Level 16, 61 Lavender Street c/- Link Market Services Limited Ardent Leisure Trust Milsons Point NSW 2061 Level 12, 680 George Street ARSN 093 193 438 AUSTRALIA Sydney NSW 2000 Ardent Leisure Limited Telephone +61 2 9409 3670 Locked Bag A14 ABN 22 104 529 106 Investor Servic
Slide 5: Ardent Leisure Group 2015 Full Year Results
Ardent Leisure Group 2015 Full Year Results
Slide 6: Contents
Contents Ardent Leisure Group FY15 Financial Summary, Commentary & Highlights Main Event Entertainment Health Clubs Bowling Theme Parks Marinas Group Financial Results for Year Ended 30 June 2015 Appendices
Slide 7: FY15 Financial Summary
FY15 Financial Summary FY15 FY14 1 Revenue $594.6m $499.7m 19.0% 2 Core earnings $56.2m $58.2m (3.3%) Statutory Profit $32.1m $49.0m (34.4%) 2 Core EPS 12.92c 14.40c (10.3%) DPS 12.50c 13.00c (3.8%) Movement based on prior corresponding period (pcp) (1) From operational activities excluding property
Slide 8: Key Messages
Key Messages Outstanding performance continues from Main Event with USD EBITDA up 63.8% driven by performance of both constant and new centres. Six Main Event centres opened in FY15, seven centres planned for FY16 and eight centres planned for FY17. Currently pursuing opportunities for additiona
Slide 9: Key Messages (cont.)
Key Messages (cont.) Theme Parks delivered solid result with EBITDA for the year being marginally below last year, despite the unprecedented rainfall and cyclone impact during the peak trading period in Q3. Marinas remains robust with result affected by short term impact of lower occupancy at Th
Slide 10: Main Event is now the largest business division and is continuing to grow
Main Event is now the largest business division and is continuing to grow. The Group will benefit from its growing US earnings and any further weakening of the Australian dollar against the US dollar. FY14 EBITDA FY15 EBITDA 9% 8% 25% 28% 21% 35% 21% 12% 30% 11% 6
Slide 11: Main Event Entertainment
Main Event Entertainment US$’000 FY15 FY14 % Change Total revenue 143,612 89,254 60.9 EBRITDA (ex pre-opening) 52,043 33,513 55.3 Operating margin 36.2% 37.5% Property costs (ex straight line (15,352) (11,112) 38.2 rent) EBITDA 36,691 22,401 63.8 EBITDA margin 25.5% 25.1% 7
Slide 12: Main Event Entertainment
Main Event Entertainment FY15 FY14 % FY15 FY14 % US$’000 Revenue Revenue Change EBRITDA EBRITDA Change Constant 83,783 77,354 8.3 38,394 35,019 9.6 Centres New Centres1 59,829 11,900 402.8 25,567 5,276 384.6 Corporate & Regional - - - (11,918) (6,782) 75.7 expenses Total 143,612 89,254 60.9 52,043 3
Slide 13: Main Event Full Year Commentary
Main Event Full Year Commentary Constant centre revenue growth of 8.3% was assisted by a new core food menu, bar remodels and increased amusement game contribution. Value based promotions, growth in corporate, group and social league events and ongoing focus on customer satisfaction has driven g
Slide 14: Main Event Outlook
Main Event Outlook Construction has started on five new sites due to open in FY16 with design/construction documents completed on a further two sites for FY16 openings: Independence, MO (Q3) Avondale, AZ (Q3) Memphis, TN (Q3) Louisville, KY (Q4) Fort Worth, TX (Q3) Negotiations underway on eight
Slide 15: Main Event Portfolio & Development Sites
Main Event Portfolio & Development Sites Midwest 17 22 25 Mid Sunbelt Atlantic 20 21 19 14 18 8 9 24 13 23 2 1 3 4 Texas 5 Existing Sites 6 11 12 7 Under Development 10 16 Existing Sites Under Construction 1. Lewisville, TX 8. Lubbock, TX 15. Pharr, TX 21. Memphis, TN 2. Grapevine, TX 9. Frisco, TX
Slide 16: Health Clubs
Health Clubs $’000 FY15 FY14 % Change Total revenue 178,388 164,070 8.7 EBRITDA (ex pre-opening) 72,543 70,249 3.3 Operating margin 40.7% 42.8% Property costs (ex straight line (44,391) (36,259) 22.4 rent) EBITDA 28,152 33,990 (17.2) EBITDA margin 15.8% 20.7% 12
Slide 17: Health Clubs
Health Clubs FY15 FY14 % FY15 FY14 % $’000 Revenue Revenue Change EBRITDA EBRITDA Change Constant clubs 148,541 158,370 (6.2) 73,702 81,044 (9.1) Club closed1 173 569 (69.6) 34 161 (78.9) New clubs/acquisitions2 26,839 4,193 540.1 13,319 1,793 642.8 Corporate and regional office expenses/sales 2,835
Slide 18: Health Clubs Full Year Commentary
Health Clubs Full Year Commentary Health Clubs EBITDA was down 17.2% for the year due to competition from 24/7 operators, which is now being addressed. Since Q2, EBITDA trends have improved with Q4 EBITDA of $7.2 million up from $6.5 million in Q3. June and July 2015 saw membership growth sign
Slide 19: Health Clubs Outlook
Health Clubs Outlook Conversion of clubs to large format full service 24/7 operation proving to be a market disruptor providing significant uplift in membership sales and reduced attrition. A further 30 clubs to be converted during FY16 with a total of 45 clubs scheduled to be in 24/7 operation by
Slide 20: Bowling
Bowling $’000 FY15 FY14 % Change Total revenue 116,510 113,889 2.3 EBRITDA (ex pre-opening) 40,279 38,907 3.5 Operating margin 34.6% 34.2% Property costs (ex straight line (26,290) (25,142) 4.6 rent) EBITDA1 13,989 13,765 1.6 EBITDA margin 12.0% 12.1% (1) EBITDA grew by 5.0% excluding the one-off ma
Slide 21: Bowling
Bowling FY15 FY14 % FY15 FY14 % $’000 Revenue Revenue Change EBRITDA EBRITDA Change Constant centres 110,206 109,755 0.4 52,772 51,381 2.7 Centres closed 1,377 3,816 (63.9) 527 1,568 (66.4) New centres1 4,874 288 1,592.4 2,613 157 1,564.3 Corporate and regional office expenses/sales 53 30 76.7 (15,6
Slide 22: Bowling Full Year Commentary
Bowling Full Year Commentary EBITDA up 1.6%1 through a combination of modest constant centre growth and growth from acquisitions. Operating margin increased from 34.2% to 34.6%. Initiatives launched during the year include an online booking engine for social bowling and birthday parties, custome
Slide 23: Bowling Outlook
Bowling Outlook Reviewing opportunities to convert key locations to multi attraction family entertainment centres (FEC). Darwin FEC has had an exceptional first two weeks of trading results. Continue to pursue further opportunities to acquire “stand alone” amusement arcades. Digital initiati
Slide 24: Kingpin Darwin
Kingpin Darwin 20
Slide 25: Kingpin Darwin
Kingpin Darwin 21
Slide 26: Kingpin Darwin
ingpin Darwin \} et Ft
Slide 27: Theme Parks
Theme Parks $’000 FY15 FY14 % Change Total revenue 99,571 100,139 (0.6) EBRITDA 33,163 33,867 (2.1) Operating margin 33.3% 33.8% Property costs (1,148) (1,068) 7.5 EBITDA 32,015 32,799 (2.4) EBITDA margin 32.2% 32.8% Attendance 2,281,606 2,042,164 11.7 Per capita spend ($) 43.64 49.04 (11.0) 23
Slide 28: Theme Parks Full Year Commentary
Theme Parks Full Year Commentary Solid result despite unprecedented rainfall and the impact of Cyclone Marcia in Q31. Successful June 2016 pass marketing campaign and competitive pricing has delivered 28% pass holder growth across May, June and July 2015. Strong growth continued from two large
Slide 29: Theme Parks Full Year Commentary (cont.)
Theme Parks Full Year Commentary (cont.) The new ABC Kids World opened in time for June/July school holidays. Dreamworld Corroboree continues to appeal to group, education and international markets. Dreamworld was voted Queensland’s Best Major Tourist Attraction and Australia’s third most popula
Slide 30: Theme Parks Outlook
Theme Parks Outlook Further digital technology to drive revenue, improve the customer experience and collect more granular data will be introduced in Q2 FY16. Tiger Cub born in July 2015 will provide a unique reason to visit during the September school holidays. Further investment in Food and
Slide 31: Marinas
Marinas $’000 FY15 FY14 % Change Total revenue 22,952 23,466 (2.2) EBRITDA 12,765 12,944 (1.4) Operating margin 55.6% 55.2% Property costs (2,615) (2,548) 2.6 EBITDA 10,150 10,396 (2.4) EBITDA margin 44.2% 44.3% 27
Slide 32: Marinas Revenue Breakdown
Marinas Revenue Breakdown $’000 FY15 FY14 % Change Berthing 12,865 12,812 0.4 Land 5,220 5,375 (2.9) Fuel and other 4,867 5,279 (7.8) Total 22,952 23,466 (2.2) 28
Slide 33: Marinas Full Year Commentary
Marinas Full Year Commentary EBITDA was down marginally for the year, impacted by lower occupancy at The Spit in Q4 FY15 as a result of a $5 million redevelopment, which is expected to complete in Q1 FY16. Despite the above, full year occupancy grew from 84.2% to 85.5% with a slight decrease in
Slide 34: Outlook
Outlook Revenue uplift at The Spit from 24 new large berths should start to be realised in Q2 FY16. Continued focus on digital initiatives (website, mobile application) to improve customer engagement and retention. Pursuing opportunity to create value through selective redevelopment and refurb
Slide 35: Group Financial Results for the Year Ended 30 June 2015
Group Financial Results for the Year Ended 30 June 2015
Slide 36: FY15 Group Results by Division
FY15 FY14 Theme Health Group Group % $ million Parks Marinas Bowling Main Event Clubs Other Total Total Change Operating revenue 99.6 22.9 116.5 177.1 178.4 0.1 594.6 499.7 19.0% Division EBRITDA1 33.2 12.8 40.3 64.4 72.5 - 223.2 192.8 15.8% Property costs2 (1.2) (2.7) (26.3) (18.7) (44.3) - (93.2)
Slide 37: Capital Expenditure
Capital Expenditure FY15 FY15 routine capex development capex $m $m Theme Parks 7.8 - Marinas 2.2 2.6 Bowling 6.0 8.5 1 Main Event 9.7 78.1 Health Clubs 13.8 4.6 Corporate 2.2 - Total 41.7 93.8 Depreciation (excl IFRS) 37.0 - (1) Includes capex spent on developments completed in FY15 and development
Slide 38: Consolidated Group Balance Sheet Summary
Consolidated group ($ million) 30 June 2015 30 June 2014 Assets Theme Parks 262.7 259.8 Excess land 1.9 2.4 Marinas 109.9 103.7 Bowling 140.9 131.2 Main Event 217.9 138.2 Health Clubs 250.4 211.7 Other 12.8 6.0 Total Assets 996.5 853.0 Liabilities Bank debt 278.6 260.2 Other 138.4 87.3 Total Liabili
Slide 39: Capital Management
Capital Management The Group should be viewed in two distinct geographical parts – Australia and the United States. The Australian Group is more mature, lower growth and is less capex intensive. The US Group (Main Event) has a national US rollout opportunity, which will require significant cap
Slide 40: Capital Management – Bank Facilities
Capital Management – Bank Facilities At 30 June 2015, the Group had the following bank facilities: Facility Drawn $m $m A$ maturing July 2016 100.0 100.0 A$ maturing July 2017 100.0 44.4 US$ maturing July 2016 (US$90m) 117.2 93.9 US$ maturing July 2017 (US$70m) 91.1 41.5 408.3 279.8 In August 20
Slide 41: Capital Management – Bank Covenants
Capital Management – Bank Covenants There are two covenants in place for the Group facility: Group Covenant 30 June 2015 Fixed Charge Cover Ratio (FCCR) >1.751 2.05 Debt Serviceability Ratio (DSR) <3.751 2.56 Gearing (debt / debt + equity) equated to 32.56% at 30 June 2015. There is no gearing c
Slide 42: Capital Management – Interest & Foreign Exchange
Capital Management – Interest & Foreign Exchange At 30 June 2015, the Group had 46.9% of interest on debt facilities fixed through interest rate swaps. At 30 June 2015, the weighted average rate, including margin, was 4.28% for AUD debt and 1.92% for USD debt. US earnings are 100% unhedged and
Slide 43: Group Outlook
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Slide 44: Group Outlook
Group Outlook The Group will: Drive top line revenue with innovative products, effective marketing, improved digital capabilities and great customer service. Focus on maximising Main Event’s national US roll-out opportunity and deploy the majority of capital to achieve this. Continue to conver
Slide 45: Appendices
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Slide 46: Core earnings reconciliation to statutory profit
Appendix 1 Core earnings reconciliation to statutory profit $ million FY15 FY14 % Change Core earnings 56.2 58.2 (3.3%) Pre-opening expenses (6.5) (2.6) 150.0% Straight lining of fixed rent increases (2.3) (1.5) 53.3% IFRS depreciation (11.1) (8.6) 29.1% Amortisation of Health Clubs intangibles (6.8
Slide 47: Appendix - Property valuations
Appendix 2 - Property valuations Book value 1 Book value No. of Pre reval Post reval Change % Property Assets $m $m $m change Valuation methodology DW/WWW 1 227.5 227.5 - - Cap rate/ DCF SkyPoint 1 22.3 26.5 4.2 18.8 Cap rate/ DCF 2 Excess land 1 2.4 1.9 (0.5) (20.8) Direct comparison Marinas 7 104.
Slide 48: Disclaimer
Disclaimer This information has been prepared for general information purposes only, is not general financial product advice and has been prepared by Ardent Leisure Management Limited ABN 36 079 630 676 (ALML), without taking into account any potential investors’ personal objectives, financial situa