Annual Report 2006
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Annual Report 2006 VILLAGE ROADSHOW LIMITED ANNUAL REPORT 2006 Village Roadshow Limited ABN 43 010 672 054 CONTENTS DIRECTORY 01 CORPORATE REVIEW 04 THEME PARKS CONTACT INFORMATION 06 FILM PRODUCTION Principal Administrative Offi ce Registered Offi ce Home Exchange 08 CINEMA EXHIBITION Village Roadshow Limited Warner Roadshow Movie World Studios Australian Stock Exchange Limited 10 RADIO 206 Bourke Street Pacifi c Motorway Riverside Centre Melbourne Vic 3000 Oxenford Qld 4210 123 Eagle Street 12 FILM DISTRIBUTION Australia Australia Brisbane Qld 4000 14 BOARD OF DIRECTORS Ph: 03 9667 6666 Ph: 07 5585 9666 Australia 16 SENIOR MANAGEMENT Fax: 03 9663 1972 Fax: 07 5573 3698 Ph: 1300 300 279 17 FINANCIAL REPORT Fax: 1300 300 021 06 102 ADDITIONAL INFORMATION DIVISIONAL OFFICES Cinema Exhibition Radio Theme Parks Village Cinemas Austereo Group Limited Village Roadshow Theme Parks 08 Level 1, 1 Garden Street 180 St Kilda Road Pacifi c Motorway South Yarra Vic 3141 St Kilda Vic 3182 Oxenford Qld 4210 Australia Australia Australia Ph: 03 9281 1000 Ph: 03 9230 1051 Ph: 07 5573 3999 OUR Fax: 03 9251 5360 Fax: 03 9534 8011 Fax: 07 5573 3698 Film Distribution Film Production BUSINESS 10 Roadshow Films Village Roadshow Pictures Founded by Roc Kirby, Village Village Roadshow’s assets include: Level 1 Sony Plaza Roadshow fi rst commenced > Australia’s most popular theme 500 Chapel Street 3400 Riverside Drive business in 1954 in Melbourne, parks on Queensland’s Gold Coast: South Yarra Vic 3141 Suite 900 Australia and has been listed on Warner Bros. Movie World, Sea Australia Burbank CA 91505 the Australian Stock Exchange World, Wet ‘n’ Wild Water World Ph: 03 9829 0666 United States since 1988. Still based in Melbourne, and Australian Outback Spectacular Ph 818 260 6000 Village Roadshow is a leading > Village Roadshow Pictures, Fax: 818 260 6001 international entertainment a leading independent fi lm and media company with core producer of Hollywood movies businesses in Theme Parks, Film with blockbuster hits including INVESTOR INQUIRIES Production, Cinema Exhibition, The Matrix trilogy, Ocean’s Eleven, 04 12 To ensure shareholders and other interested parties can keep up to date on the Company, Village Roadshow Limited has a corporate Radio and Film Distribution. Ocean’s Twelve and Charlie website. The site contains information on the Company including business unit profi les, press releases, result announcements and details Each of these businesses are well and the Chocolate Factory of shareholder benefi ts. The site can be accessed at www.villageroadshow.com.au recognised retail brands and strong > Village Cinemas with state of Please contact the Company’s share registry for all inquiries on your Village Roadshow shareholding, such as cash fl ow generators; together they the art complexes including in – confi rmation of shareholding details; and create a diversifi ed portfolio of Australia, Greece and Singapore, – change of address advice. media and entertainment assets. together with a strong fi lm distribution presence in Singapore Share register and Greece Computershare Investor Services Pty Limited > A majority shareholding in the Yarra Falls Australian listed Austereo Group 452 Johnston Street Limited which owns and operates Abbotsford Vic 3067 Australia’s leading FM radio Australia networks, Today FM and Triple M Ph: 1300 850 505 > Roadshow Films, Australasia’s Fax: 03 9473 2500 largest independent fi lm, video and DVD distribution business. DESIGN: COLLIER & ASSOCIATES THE STRATEGIC DESIGN COMPANY #11476 Corporate Review TO OUR SHAREHOLDERS 2006 has been a very productive year for Village Roadshow as it represents the culmination of an enormous amount of work to turn around the direction of your Company and position us for a strong future. Village Roadshow Limited has always been about building businesses. From our original inception as a public company we saw steady growth in our share price with: JOHN R KIRBY ROBERT G KIRBY GRAHAM W BURKE > The creation of Warner Bros. Chairman Deputy Chairman Managing Director Movie World – the basis of becoming the leading theme park In the last three years we have facility to US$1.4 billion which $35.1 million for the prior year operator in Australia today; focused on turning our ship enables the division to lift the due primarily to lower trading > The opening of our world class around with the sale of cinema number of fi lms it could produce results from Cinema Exhibition cinema circuit across Australia circuits in Germany, United each year to 10 to 12. and Theme Parks and other one – together with our partners Kingdom, Taiwan, Korea, Subsequent to year end, we off expenses incurred during the Greater Union, we are the leading Argentina, Austria and others. We completed the 100% acquisition year but which were not included circuit; have taken the pain and the losses of the theme park division while as material items. > Putting together Triple M and and massively reduced the liability retaining our close and strong Underlying cash fl ow from the Today Networks to create the of the lease commitments. In the relationship with Warner through Company’s businesses was still new Austereo – the biggest radio remaining primary markets of a long term licensing agreement strong, however, with reported network in Australia; Australia, Greece and Singapore, for Warner Bros. Movie World. earnings before interest, tax, > The creation of Village we have the leading circuits with We also acquired the remaining depreciation and amortisation Roadshow Pictures Group – now scale for marketing, buying and 50% in the Sea World Resort excluding material items and the world’s leading independent overhead spread. Hotel resulting in the Company discontinued operations at fi lm production company; and During last year, as well as now owning 100% of all its $174.2 million in the current year, > The pioneering and continued addressing Cinema Exhibition, Australian theme park businesses. compared to the previous year’s market leadership by Roadshow our redirection programme has This restructuring program $197.4 million. of the home entertainment included: resulted in a number of one-off A summary of the fi nancial industry in Australasia. > The multi-million dollar material items and losses from results for the year appear in the However, in the early 2000’s restructure of the Film Production discontinued businesses which table below and full details appear our expansion into foreign division which not only provided impacted on the full year result in the fi nancial report for the Cinema Exhibition in a number a return of capital to Village and the Company recorded an 2006 year starting from page of major countries proved Roadshow but also access to after tax loss of $35.1 million for 17 of this annual report. traumatically disappointing signifi cant expertise, contacts the year ended 30 June 2006, As part of its capital management and drove our share price into and proven entrepreneurial spirit compared to last year’s profi t of program, during the year the a slump. We weren’t alone in with our wonderful new partners, $49.3 million. Company completed on-market calling it wrong as some of the Hal Gaba, Norman Lear and Excluding material items and buy backs totalling approximately world’s largest entertainment/ Michael Lambert ; and discontinued businesses, the 10% of the ordinary shares on media companies experienced > The extension and upsizing of Company’s attributable net profi t issue for $45.4 million. similar poor performance. the Film Production fi nancing was $20.1 million compared to Financial Summary 2006 2005 % Change $M Reported EBITDA excluding Material Items and Discontinued Operations 174.2 197.4 (11.75) Pre tax profit – excluding Material Items and Discontinued Operations 56.2 94.0 (40.21) Less Tax expense, excluding tax on Material Items and Discontinued Operations 21.9 43.3 (49.42) Outside equity interests 14.2 15.6 (8.97) Attributed profit after tax, before Material Items and Discontinued Operations 20.1 35.1 (42.74) Net Material Items and Discontinued Operations (55.2) 14.2 N/A Net profit (loss) (35.1) 49.3 N/A Total equity before outside equity interests 498.1 572.0 (12.92) Total earnings per share before Material Items and Discontinued Operations (total shares) (cents) 7.47 11.84 (36.91) Return on average equity (%) 5.67 7.07 (19.80) Net tangible assets plus Film Library and Radio Licences ($ per share) 1.71 1.83 (6.56) ANNUAL REPORT 2006 01 Corporate Review Based on the loss incurred The Matrix trilogy, Ocean’s Eleven Melbourne, Adelaide (equal fi rst) for the 2006 fi nancial year and and Ocean’s Twelve, Analyze This, and Perth, while the group was the bank debt covenant levels Cats & Dogs, Miss Congeniality 1 second in Brisbane. This is a major which were higher as a result of and 2, Training Day, Mystic River turnaround from the prior year, the theme park acquisition, the and Charlie and the Chocolate when Austereo led in two markets. Board has resolved not to pay a Factory. Our management team The trend across the year was one dividend, however this policy is one of the most experienced in of consistent audience growth as will continue to be reviewed the industry and they have crafted the programming and marketing based on the performance of the a line up for 2007 that others strategies delivered strong Company. In November 2005 a judge to be one of the strongest outcomes. The audience and special dividend of 7.175 cents for any fi lm company. Titles consequent earnings gains were per ordinary share and 10.175 include: License to Wed with Robin achieved in spite of three new cents per preference share, Williams, The Visiting with Nicole licences launching immediately fully franked at 30%, was paid Superman Escape ride, Kidman, The Reaping with Hilary prior to, or during, the year in based on the previous fi nancial Warner Bros.