What happened to Ardent Leisure share price?
Ardent Leisure Group [ASX:AAD] shares rose 11.7% today, after the company agreed to sell their bowling and entertainment division.
Ardent’s bowling and entertainment section runs businesses including AMF bowling, Kingpin bowling lounges and Playtime arcades.
Their main event and theme park division also owns Gold Coast theme parks including Dreamworld and WhiteWater World.
Why the share price rise?
The bowling and entertainment section of Ardent has being successful this year. The 2016/2017 financial year brought in revenues of AU$127.7 million. Since then, the business has kept growing.
Ardent has just agreed to sell this division of their company for AU$160 million to The Entertainment and Education Group, which they announced this morning.
Chairman Gary Weiss said: ‘The divestment will relieve Ardent of the requirement to make the significant further investment needed in the business and enable the company to boost investment in its Main Event and theme parks businesses.’
Weiss explained that they are going to use this opportunity to focus on their main event and theme park division, which took a huge hit last year and has since been struggling. Having lost AU$62.6 million during the 2016/2017 financial year, Ardent believes that their theme parks can be improved with extra funds — an effort which will help restore trust in how their theme parks run.
What now for Ardent Leisure?
In 2018, Ardent is starting to make progress with its theme parks. They aim to keep bringing in more revenue to make up for the loss they incurred over the past year. And as the Gold Coast will host the 2018 Commonwealth Games, Ardent has said that they hope this will help boost business overall.
In addition, they plan to expand their main event section in the US, which they think will be the main source of revenue.
Junior Analyst, Money Morning
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