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  • Village Roadshow shares are up as much as 15 per cent today after releasing its 2019 annual report and announcing the sale of promotional business Edge Loyalty Systems
  • The company reported a 37 per cent increase in earnings before interest, tax, depreciation and amortisation for the 2019 financial year, ending the year at $124.9 million
  • However, Village Roadshow posted a 12.7 per cent decrease in income, just passing $1 billion over the fiscal year, and as a $6.58 million overall loss for the year
  • The Edge Loyalty Systems business will be sold to Blackhawk Network for $32.3 million

Village Roadshow has seen a healthy increase in share price today after releasing its 2019 annual report and announcing the sale of promotional business Edge Loyalty Systems.

The entertainment company reported a 37 per cent increase in earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2019 financial year, ending the year at $124.9 million.

Complementing this is the 100 per cent increase in EBITDA from Village Roadshow’s theme parks business, from $38.3 million in 2018 to $76.5 million in 2019. Village Roadshow controls the country’s most popular theme parks, including Warner Bros. Movie World, Sea World, Wet’n’Wild, and more.

On top of this, Village Roadshow works in the cinema and film distribution businesses. Despite big names like Avengers: Endgame and Us hitting cinemas this year, Village Roadshow’s cinema exhibition division didn’t quite reach expectations.

Total EBITDA was down to $53.9 million compared to last year’s $58.1 million, and profit before tax ended the year at $32.7 million compared to the previous financial year’s $36.2 million.

Similarly, total income was down $15.8 million in the film distribution business, with profit before tax dropping from $6.8 million in the 2018 financial year to $1.1 million in 2019.

In fact, Village Roadshow posted a 12.7 per cent decrease in income, just passing $1 billion over the fiscal year, as well as a $6.58 million overall loss for the year.

Company management touted a $20.6 million net profit after tax (NPAT), but this figure only comes when crunching the numbers before material items and discontinued operations. Once these other factors have been accounted for, the company’s profit heavily declines.

Nevertheless, last year saw the entertainment company post a net loss after tax before material items and discontinued operations of $7.3 million. As such, the $20.6 million figure is still comparably strong.

Helping push Village Roadshow’s share price up today, however, is the announcement of the $32.3 million sale of its promotional solutions agency, Edge Loyalty Systems. The business will be taken over by Blackhawk Network, subject to certain conditions, and is expected to be officially sold in November 2019.

Village Roadshow says proceeds from the sale will be used reduce company debt.

Shareholders took well to Village Roadshow’s announcements today, with shares on the rise despite the overall yearly loss.

At 3:15 pm AEST, Village Roadshow shares are up 15.70 per cent and worth $2.80 apiece. Shares trade in a $542.47 million market cap.

VRL by the numbers
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