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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 Services 1800 ARDENT Sydney South NSW 1235 Ardent Leisure Management Limited Fax +61 2 9409 3670 Telephone 1300 720 560 ABN 36 079 630 676 www.ardentleisure.com.au [email protected] (AFS Licence No. 247010) ASX RELEASE 24 September 2013 The Manager Company Notices Section ASX Limited 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam DAIWA CAPITAL MARKETS CONFERENCE Please find attached for release to the market a presentation to be given by Greg Shaw at a Daiwa Capital Markets Australian corporate event in Tokyo. Yours faithfully Alan Shedden Company Secretary Ardent Leisure Group is a specialist operator of leisure and entertainment assets across Australia, New Zealand and the United States. The Group operates Dreamworld, WhiteWater World, SkyPoint, SkyPoint Climb, d’Albora Marinas, AMF and Kingpin bowling centres and Goodlife fitness centres across Australia and New Zealand. The Group also operates the Main Event family entertainment centres in the United States. For further information on the Group’s activities please visit our website at www.ardentleisure.com.au For personal use only AMF Bowling | d’Albora Marinas | Dreamworld | Goodlife Health Clubs | Kingpin Bowling Main Event Entertainment | SkyPoint | SkyPoint Climb | WhiteWater World Ardent Leisure Group For personal use only Contents Group and Financial Overview Health Clubs Main Event Entertainment Theme Parks Marinas Bowling Group Financial Results For Year Ended 30 June 2013 Business Innovation to Drive Growth For personal use only 2 Group and Financial Overview For personal use only 3 Introduction Ardent Leisure is one of Australia’s most successful, diversified leisure and entertainment groups. Owns market leading health club, theme park, bowling and marina businesses in Australia and is a leading family entertainment centre operator in the USA. Listed on the Australian Securities Exchange (ticker code AAD). Included in the S&P/ASX 200 benchmark index. Ardent’s strategy is to invest in businesses that have mass market appeal and occupy dominant positions in affordable, family-friendly, leisure and entertainment categories. Highly experienced management team with specialist operating expertise. For personal use only Ardent Leisure has continued to grow DPS – currently yielding 6.5% based on security price of $1.86 on 17 September 2013. 4 FY13 financial summary FY13 FY12 Revenue1 $448.9m $390.1m 15.1% Core earnings2 $50.3m $42.1m 19.2% Core EPS2 13.14c 12.91c 1.8% DPS 12.00c 11.70c 2.6% The Group reported a statutory profit of $35.6m for the full year (prior full year $12.6m). For personal use only Movement based on prior corresponding period (pcp) (1) From operational activities excluding property revaluations, gains on derivative financial instruments, interest income, gain on acquisition and gains on asset disposals. (2) Adjusted for unrealised gains on derivative financial instruments, property revaluations, straight-lining of fixed rent increases, pre-opening expenses, IFRS depreciation, amortisation of Health Clubs intangible assets, loss on sale of freehold land and buildings, business acquisition costs, one off early termination of interest rate swap, gain on acquisition and the tax associated with these transactions. 5 Strong performance of the Group is a reflection of high demand for affordable leisure product and the Group’s continuing earnings diversification. Consistently driving earnings growth through portfolio diversification FY08 EBITDA* FY13 EBITDA 11% 10% 30% 15% 17% 49% 17% 13% For personal use only 30% 8% * EBITDA is earnings before interest, tax, depreciation and amortisation. 6 Health Clubs For personal use only 7 Goodlife Health Clubs Ardent operates 65 health clubs in Australia under the Goodlife brand, with approximately 190,000 members. Goodlife is Australia’s fastest growing full service health club chain. Market leader in the states of Queensland, Victoria and South Australia and the joint market leader in Western Australia. The clubs are full service gyms, ranging from 1,500 to 2,500 square metres in size, and include: For personal use only – State of the art cardio and strength exercise equipment; – Group exercise aerobics classes; and – On-site personal training. 8 For personal use only 9 For personal use only 10 For personal use only 11 Goodlife Health Clubs Ardent entered the health club industry in September 2007 with the acquisition of Goodlife Health Clubs. Since then, Ardent has grown the portfolio from 18 to 65 clubs through a combination of greenfield developments and bolt-on acquisitions. Approximately 80% of Goodlife’s revenue is generated from membership sales, c.10% from personal training, with the balance from the sale of food and beverages, supplements and merchandise. Goodlife’s success is underpinned by quality locations in its core markets and For personal use only industry leading sales, customer retention, human resource management and business intelligence systems. 12 Goodlife Health Clubs Personal training services have been a key focus to drive gym usage and support customer retention. Goodlife has recently restructured its personal training model from an employee to contractor based model, which has increased the penetration of personal training services and driven improved profit margins. Goodlife benefits from participating in an industry with mass market relevance. Health club membership is increasingly perceived as being non-discretionary, driven by: Increased community awareness of links between chronic illness, For personal use only diabetes, obesity and poor diet and exercise choices. Increased awareness of the benefits of exercise for middle and older age demographics. 13 Goodlife Health Clubs Goodlife has delivered 3 years of constant centre earnings growth. Bolt-on acquisitions have typically been acquired for prices of 3.5x to 4.7x EBITDA. New developments are expected to be developed for $1.5m to $2.5m and deliver more than a 25% EBITDA return on investment. The 2 most recent developments, which opened in December 2012, are both on track to exceed expectations. Future earnings growth is expected to be underpinned by constant centre For personal use only growth, bolt-on acquisitions and new developments. A new site in the Northland shopping centre in Melbourne, Victoria is due to open in December 2013. 14 Goodlife Health Clubs $’000 FY13 FY12 % Change Total revenue 140,689 102,577 37.2 EBRITDA (ex pre-opening) 60,032 40,224 49.2 Operating margin 42.7% 39.2% Property costs (ex straight line (29,703) (20,265) 46.6 rent) EBITDA 30,329 19,959 52.0 For personal use only 15 Goodlife Health Clubs FY13 FY12 % FY13 FY12 % $’000 Revenue Revenue Change EBRITDA EBRITDA Change Constant clubs 94,937 94,890 - 47,038 44,642 5.4 Clubs closed 615 2,450 (74.9) 98 623 (84.3) New clubs/acquisitions 44,979 4,973 804.5 23,377 2,570 809.6 Corporate and regional 158 264 (40.2) (10,481)* (7,611) 37.7 office expenses/sales and marketing Total 140,689 102,577 37.2 60,032 40,224 49.2 For personal use only * Increase due to strengthening of Head Office team across finance, HR, regional Sales and Marketing to cover larger portfolio and investment in IT. 16 Family Entertainment Centres For personal use only 17 Main Event Ardent operates 12 family entertainment centres in Texas in the USA under the Main Event brand. Ranging in size from 5,000 to 7,000 square metres, the centres include: – ten pin bowling; – more than 100 amusement games; – laser skirmish; – billiards; – quality, full service restaurant and fast food dining; – full service bar; and For personal use only – birthday party and group function rooms. Some centres also include glow in the dark mini golf, gravity ropes and indoor rock climbing walls. 18 Main Event Locations 24 Million people live in th Lubbock Texas. 13 highest GDP in Dallas the world if thought of as a country* Austin Houston For personal use only San Antonio.. *Source: International Monetary Fund list of countries by GDP (nominal) for world GDP 19 For personal use only 20 20 For personal use only 21 21 For personal use only 22 22 Main Event Ardent acquired Main Event in August 2006. Since then, the portfolio has grown from 6 to 12 centres through greenfield developments in Texas. Main Event's success is underpinned by its: – unique mix of quality dining, bowling and attractions; – convenience as a one stop entertainment destination; – affordable price point; – broad appeal to all age groups; – limited direct competition; For personal use only – quality locations off major freeways; – strong Texas economy; and – business friendly operating environment. 23 Main Event The centres are significant drivers of leisure traffic, with an average of 500,000 visits per annum. Around 70% of revenue is from walk-in customers. The remainder is group revenue from birthday parties, corporates, churches, sports and other community groups. Bowling, food and beverage and amusement games each contribute around 25% to 35% of revenue. Main Event has delivered 3 years of strong constant centre revenue and For personal use only earnings growth. The expected development cost of each new centre is around US$6.5m to US$7.5m, with a targeted EBITDA return on investment of 30%. 24 Main Event Revenue, profitability and return on investment of the 3 most recent developments have all outperformed expectations and the portfolio average. Main Event is on track to grow the portfolio from 12 to 19 centres by FY 30 June 2015. New development is focused on the US Sunbelt states, which have similar characteristics to Texas. A new centre in Tempe in Phoenix, Arizona is expected to open in late Qtr 2, FY 30 June 2014.