Village Roadshow posts 18 per cent profit rise, key directors sell shares
Village Roadshow Corporation (VRC) and key executive directors Robert Kirby and Graham Burke plan to sell 11 million shares in Village Roadshow (VRL) – the equivalent of 7 per cent of the film and entertainment company – to investors.
The share sale comes as the company unveiled an 18 per cent lift in half-year net profit to $33.47 million. Kirby and Graham are directors of both parent company VRC and the publicly-listed VRL and have been central to the growth of the company.
However, VRC and its directors confirmed that they have no intention of selling further VRL shares after the current sale (which is intended to increase liquidity in VRL). They will still own a 44 per cent stake.
“Following an excellent first half result and with an exciting pipeline of opportunities across all divisions, VRC believes VRL has an outstanding future and will continue to drive VRL’s performance,” the company said in a statement.
Village Roadshow’s business includes theme parks, cinema exhibition, film production and distribution. The lift in profit over the December 2012 half was driven by all divisions (particularly exhibition), the sale of its distribution centre to Technicolor, and lower group costs.
“The world is in the mood to go out, to indulge themselves in a little pleasure and escape from worries,” VRL chief executive Graham Burke said in a statement.
Its distribution division is the largest within the company and accounted for almost half of its earnings. Earnings before interest and tax (EBIT) rose marginally by $100,000 to $29.9 million compared to the prior corresponding period. That result was underpinned by films such as The Dark Knight Rises, Argo, and The Hobbit at cinemas while Hunger Games performed well on DVD.
VRL’s Australian exhibition division, which includes 514 screens, posted a $1.9 million rise in EBIT to $16.7 million. The result was driven by a slight increase in paid admissions, higher average ticket prices and higher patron spend on food and beverages. Films such as The Dark Knight Rises, Twilight: Breaking Dawn 2, Skyfall and Madagascar 3 underpinned the result.
During the half year, VRL’s film and production and music division renewed its co-production deal with Warner Bros through to December 2017 and increased its film finance facility to $US1.1 billion allowing it to produce 6 to 8 Hollywood films a year.