Village Roadshow Limited [ASX:VRL] share price dropped by around 10% today. Shares are currently trading at $3.66, down from $4.11 yesterday.
Why did the VRL share price drop?
The sharp price drop is due to a decrease in annual revenue for the year.
The company announced that its Theme Parks and Cinema Exhibition divisions were experiencing challenging trading conditions. The group expects the 1HFY18 results to be substantially lower than in 1HFY17.
Village Roadshow Theme Parks have stated that they are still facing backlash from the Dreamworld tragedy that occurred in October 2016.
Business News Australia reported that in November 2017 the Gold Coast theme park attendance rate was 5.4% lower year-on-year.
Village Roadshow Chairman Robert Kirby said:
‘Although not in one of our theme parks, the unprecedented publicity around the tragedy resulted in broad based community concerns about safety of rides, dramatically impacting the earnings of our Australian theme parks.’
What now for Village Roadshow?
Village Roadshow is set to release its first-half results on 16 February.
VRL expects to recover in the second half of 2018, with the release of Deadpool 2, Ready Player One, Avengers: Infinity War, Solo: A Star Wars Story and Jurassic World: Fallen Kingdom.
The company also announced that there has been an increase in ticket revenue in January, following the marketing strategy introduced in November 2017.
Taking into account the first-half financial results, the company anticipates a slight decline in profits year-on-year, with net profit after tax in the range of AU$12–17 million.
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