Village Roadshow shares dive as debt rises

Village Roadshow shares have slumped to their lowest level in more than four years after the company said it could be forced to sell assets in an effort to cut debt.

The stock hit its lowest point since September 2012 after a disappointing first-half performance by Village Roadshow's Gold Coast theme parks contributed to a net debt that now stands at 3.27 times company earnings.

"The board considers this an unacceptable level of gearing and is focused on reducing this significantly," Village Roadshow said in a statement to the Australian Securities Exchange on Friday.

"This includes a range of measures including the active pursuit of potential asset sales and the decision not to pay an interim dividend."

Village Roadshow shares fell as much as 14.6 per cent as the company, which also operates cinema chains and other theme parks, reported a loss for the six months to December 31 of $6.7 million.

Earnings before interest, tax, depreciation and amortisation fell 1.8 per cent at the company's Gold Coast theme parks in the wake of the fatal disaster at rival Ardent Leisure's Dreamworld, and 27 per cent at its film distribution unit following the underperformance of independently acquired titles Deepwater Horizon and Red Dog: True Blue.

"Our key focus is to reduce leverage in the short term," chief executive Robert Kirkby said.

Village Roadshow shares recovered slightly from their intraday low of $3.22 to close down 21 cents, or 5.6 per cent, at $3.56.

They were as high as $8.27 in June 2014 and were still worth more than $7 at the start of 2016.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.7679+0.0004+0.05%
    AUDUSD=X
    0.6179+0.0009+0.15%
    AUDGBP=X
    0.7245-0.0003-0.04%
    AUDEUR=X