C30016p000_cov - 1 2016- 09- 19T12: 10: 57+10: 00 ARDENTLEISURE.COM ARDENT LEISURE GROUP 2015/16 MARINAS BOWLING HEALTH CLUBS GAMES THEME PARKS ENTERTAINMENT Kung Fu Panda, Madagascar, Shrek © DreamWorks Animation Ardent Leisure The People The Business Financial Reports Sustainability 04 Chairman’s message 10 Asset Locations 46 Income Statements 50 Committed to the Future & Statements of and Dreamworld Wildlife 06 CEO & Managing 12 Main Event Entertainment Comprehensive Income Foundation Director’s message 18 Health Clubs 47 Balance Sheets 08 Meet the Board and 24 Theme Parks Senior Management 48 Statement of Changes Dreamworld cover images reproduced with permission. 34 Bowling & Entertainment in Equity © 2016 The Wiggles Pty Ltd. 40 Marinas 49 Statement of Cash Flows Kung Fu Panda, Madagascar, Shrek © DreamWorks 48 Corporate Directory Animation. The fun starts here. Ardent Leisure Group is a leading leisure and entertainment business with a diverse portfolio of premier assets encompassing theme parks, tenpin bowling and family entertainment centres, health clubs and marinas. The businesses, owned and operated by the publicly listed Ardent Leisure Group, have in common the delivery of outstanding guest experiences, exceptional customer service and exposure to growth markets. Our activities already span Australasia and are expanding across the United States. ARDENT LEISURE 3 THE PEOPLE Message from The Chairman Neil Balnaves AO elcome to Ardent Leisure. chain and over the past 12 months scores across all areas, particularly The past 12 months have the business has experienced food and beverage, which has been W seen significant changes to significant growth with the opening a focus for investment to improve the strategic direction and structure of of seven centres in FY16. These new the quality and variety over the the Group and I would like to take this developments drove a US dollar EBITDA past two years. The creation of opportunity to provide an update on the increase of 18.7% over the prior year. unique attractions and experiences Board’s strategy to investors, employees, With 28 centres now open, as of will continue in FY17 with the the partners and other stakeholders. August 2016, Main Event Entertainment launch of the redeveloped Tiger The decision to divest the d’Albora operates across 10 states and has 13 Island precinct in September and the Marinas portfolio, along with the sites located outside Texas. The proven construction of Australia’s largest recently announced sale of the success of centres outside Texas has LEGO® Certified Retail Store at Health Clubs division to Quadrant validated our strategy to expand across Dreamworld, opening in November. Private Equity for $260 million, the Southern and Midwestern states The division is expected to benefit will significantly strengthen the and created geographic diversification from the anticipated increase in domestic Group’s balance sheet and focus to drive growth. A further 11 new and international tourism, particularly Ardent Leisure as Australia’s leading centres are planned to open in FY17 from China, as well as the Gold Coast international entertainment company, and by the end of the financial year, Commonwealth Games in 2018. with approximately 20 million customer Main Event Entertainment is expected Dreamworld’s focus on conservation, visits across Australiasia and the to be operating in 14 states across the education and the protection of United States in 2016. United States. endangered species has continued The Board’s commitment to actively manage and consolidate the portfolio firmly focuses our attention on high- “The past 12 months have seen significant quality, mass-market entertainment experiences and enables us to give changes to strategic direction and structure greater priority to the Main Event ... firmly focusing our attention on high-quality, Entertainment roll-out opportunity in the US. We will also continue to drive mass-market entertainment experiences.” revenue growth from the Australian businesses through the delivery of In the Theme Parks division, strong and with the public’s support, the superior customer experiences and year-on-year revenue growth was Dreamworld Wildlife Foundation unique offerings such as Tiger Island achieved across the key categories of has raised over $1.6 million and Corroboree at Dreamworld. entry, retail, and food and beverage, for conservation projects. This Since 2012, we have sucessfully while the focus on guest experience internationally recognised fund is been executing the growth strategy and development of unique attractions committed to projects that protect for Main Event Entertainment and drove increased EBITDA of 8.5% on threatened and endangered animals, this has seen the business increase prior year. Increased visitor growth was including tigers, in the wild. its contribution to Group earnings also seen across both domestic and The Bowling division continued before interest, tax, depreciation and international markets, with the Theme to execute its turnaround strategy amortisation from 14% in FY12 to Parks division outperforming broader of creating a multi-attraction 39% in FY16. Gold Coast tourism growth. entertainment experience similar In the United States, Main Event The success of the Group’s to that offered by Main Event Entertainment is the fastest-growing customer focus has been evidenced by Entertainment in the United States. bowling-anchored entertainment an increase in customer satisfaction The combination of new centre 4 ARDENT LEISURE / ARDENTLEISURE.COM THE PEOPLE openings and strong growth in constant centre revenues led to a significant increase in EBITDA of 30.3% against prior year. The division has continued to invest in amusement games, new and improved food and beverages, enhanced customer service and refreshed centres, including the extensive refurbishment of our flagship Kingpin centre at Crown Casino in Melbourne. These initiatives have been supported by integrated marketing campaigns and digital transformation, including a new mobile-enabled website for booking and payment, as well as the cashless Intercard system roll-out, which has substantially lifted games revenue. The Health Clubs division continued From top: The exterior design of the Main Event Entertainment centres in the US; Goodlife Health the 24/7 conversion program and Clubs are generating improved sales by changing to 24/7 operation. this strategy, combined with digital transformation, an increase in the breadth of fitness programs and in 2015 signalled a refocus on the by our shareholders the company products on offer has resulted in a customer experience, value proposition will be renamed the “Main Event significant increase in membership and service – which, along with an Entertainment Group” and the ASX sales, leading to EBITDA growth of improvement in staff engagement, ticker code will change from “AAD” 7.0% on prior year. The turnaround online initiatives and new experiences, to “MEV”. positioned the Health Clubs division has played an important role in the On 12 September 2016, the for sale as part of the strategic review. Group’s positive full year results, in company announced my retirement On 22 March 2016, we announced particular the growth of our Australian as Chairman and the appointment of the commencement of a sale process businesses. George Venardos as my successor. for the d’Albora Marinas portfolio As we reset to become Australia’s I am confident the appointment of comprising seven high-profile marinas, leading international entertainment George Venardos as Chairman will including three in Sydney Harbour, two company, the Board will seek ensure that the Board continues to adjacent to the Melbourne CBD and shareholder approval to change the execute on the strategy as a focused a further two at the popular leisure name of the company to “Main Event global portfolio of market-leading destinations of Nelson Bay and Akuna Entertainment Limited’ at the Annual entertainment experiences to maximise Bay, north of Sydney. The sale process General Meeting, being held on 27 value for our shareholders. of these premier locations is currently October 2016. The Board believes On behalf of the Board, I would like underway, with a number of parties the new name better reflects the to thank our customers, investors, involved in the negotiations. focus on entertainment and the fast- business partners and employees for The appointment of Deborah growing Main Event Entertainment their support throughout the year and Thomas as Chief Executive Officer business in the US. If approved throughout my tenure. ARDENT LEISURE 5 THE PEOPLE Message from The Group Chief Executive Officer Deborah Thomas s CEO, it is my pleasure to Core Earnings grew 11% to $62.4 of the 11 new planned locations. The update you on what has been million, and Core EPS rose 6.7%. portfolio size is expected to continue Aa defining and successful year growing at around 30% per annum for Ardent Leisure and to outline our MAIN EVENT ENTERtaINmeNT over the next two years, as we further strategy to continue delivering growth Main Event Entertainment continued expand outside Texas, increasing for shareholders. its track record of high revenue and geographical diversification and building We attracted approximately 20 million profit growth, with revenues up 21.6% a national brand. visits across our venues in Australasia to US$174.7 million and EBITDA up and the United States over the past 18.7% to US$43.5 million. With the THEME PARKS year, as we continued to deliver portfolio more than doubling in the Theme Parks had a strong year with high-quality, affordable and unique past two years, growth in FY16 was revenue growth of 8% and EBITDA up family entertainment experiences that underpinned by seven new centres that 8.5%. Revenue growth was driven by create memorable occasions for our opened during the year (six outside improvements across all of the major customers. We expect this number Texas). The success of 12 centres categories of entry, food and beverage to grow significantly over the coming across nine states outside Texas proves and retail. years as we reset the Group as a pure the broader US roll-out opportunity.