Ardent Leisure Group Ltd [ASX:ALG], the owner of entertainment parks such as Dreamworld in Queensland Australia and Main Event, which has 43 locations in the US, has faced a turbulent few years since the tragic deaths on one of its rides in 2016.
Now with the onset of the novel COVID-19 virus, the Ardent Leisure share price has plunged to a low of 28 cents at the time of writing.
Ardent Leisure’s operations shuttered for now
Social and family outings have become a thing of the past, and in turn this has dearly hurt the attendance figures at Ardent Leisure’s operations.
With social distancing rules in place, Ardent announced the temporary closure of both Dreamworld and WhiteWater World via its website on Monday, 23 March 2020. With Main Event centres following up with a similar temporary closure.
This culminated in a trading halt being triggered in mid-March 2020.
Ardent Leisure Chairman, Dr Gary Weiss, and Theme Parks CEO, Mr John Osborne, said in the announcement that:
‘The decision to close our parks is a direct result of the COVID-19 outbreak. We are deeply aware that the decision to close our parks will create a great deal of uncertainty for our team members, their families, and the broader community. . . The health and safety of our team members and guests is the Board’s number one priority.’
Where to from here for the Ardent Leisure share price
Ardent leisure understandably withdrew FY20 earnings guidance for Main Event due to the uncertainty surrounding the impact of COVID-19.
In Australia, Ardent theme parks will be closed until 31 May 2020. The closure coincides with a share price down to never before seen levels.
In October 2019, the price fell to the historical support level of 92 cents before starting to move up. The collapse in business due to COVID-19 has changed all that.
After reaching a high of 47 cents in recent times, the Ardent Leisure share price has started to fall again. With that fall on increasing volume, 19 cents may come into focus.
Could this be the bottom for the Ardent Leisure share price?
A lot depends on how soon Australia returns to some semblance of ‘normal’.
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For Money Morning