At time of writing, the share price for Ardent Leisure Group [ASX:AAD] has dropped by 3.28%, leaving the current value at $1.77 a share. The fall in the share price for Ardent should come as little surprise, given the company’s recent decline.
The group is an Australian-based entertainment and leisure company which operate throughout Australia, New Zealand and the US.
Over the past year, Ardent Leisure has lost around 10.05% of its share price.
Why is Ardent Leisure’s share price in the red?
Ardent’s recently updated consolidated group results for FY2018 show that despite revenue for its Entertainment division is expected to grow by 18%, their theme parks division is still facing serious challenges:
‘Revenue from the Australian Theme Parks division was impacted by continued slow recovery post the Thunder Rapid Rides tragedy which occurred in October 2016, discounted ticket pricing, and some adverse weather conditions.’
The Ardent board announced last month that Dreamworld will likely lose $94 million in profit as visitors continue to avoid the theme park. The ongoing investigation continues to make headline news, proving to effect not only visitor numbers but confidence in the company’s overall value.
On the back of the coronial inquest into the theme park’s safety measures, recent changes to Dreamworld’s board and the resignation of Dreamworld’s CEO, Craig Davidson, has also significantly affected the company’s standing.
What’s the outlook for Ardent Leisure?
Ardent Leisure remains a high-risk investment thanks to its theme park division, but they still have growth lined up in the form of their Main Event business in the US.
Revenue from the Main Event division, which is described as the ‘fastest-growing bowling and entertainment experience’ grew by 18%, helping to offset the $94 loss.
Ardent will release its full-year results on August 22.
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