Village Roadshow`s profit plummets 95%

Shares in Village Roadshow Ltd closed four per cent lower on Thursday despite
management reassurances that the company continues to perform well after reporting
a large fall in profit.
The media and entertainment group reported that net profit fell 95.1 per cent to
$12.65 million for the year to June 30, compared with the previous 12 months, driven
by one-off impairment charges and write-offs.
Village's share price finished 5.5 cents, or 4.37 per cent, lower at $1.205.
The decline brought the stock's losses to 11.4 per cent since last Friday.
The canning of a proposal this week by 61 per cent shareholder, Village Roadshow
Corporation, to privatise the media and entertainment group has also put downwards
pressure on the stock.
Chairman John Kirby said on Thursday that Villages' businesses continued to perform
and management was focused on cash flow generation and margins.
Business units performing well during 2008/09 included the Gold Coast theme parks,
Australian Cinema Exhibition and the film distribution unit, Village said.
Village's theme parks include Warner Brothers Movie World, Sea World, Wet'n'Wild
Water World and Australian Outback Spectacular.
However, its 50 per cent-owned premium cinema unit in the US, Gold Class USA, turned
in a disappointing performance, with a net operating loss before tax of $18.2
million, down from its 2007/08 net operating loss of $5.1 million.
Overall income from continuing operations jumped by 7.8 per cent to $1.41 billion.
Shareholders will pocket a final fully franked dividend of six cents per ordinary
share, down from nine cents for the previous corresponding period.
Preference shareholders will receive nine cents per preference share, down from 12
cents for the previous corresponding period.
Non-recurring items included $59.2 million in impairment charges relating to recent
acquisitions and $20.5 million in unrealised losses on interest rate and foreign
currency derivatives.
Village said the derivatives were deemed ineffective for accounting purposes, and
its hedging policy remains appropriate.
Village, which is the majority owner of Austereo, the radio network behind Triple
M, said the network had faced a challenging year as the radio advertising market
shrank by 3.28 per cent.
On Monday Austereo posted a 15.2 per cent fall in annual profit to $41.41 million
and expected a tough 2010.
Village chief executive Graham Burke said the group had taken "rigorous measures" to
reduce costs and achieve margin gains after mounting debt and rising costs.
After accounting for its $79.6 million in cash, Village now has net debt of $1.397
billion at June 30, steady from $1.396 million the previous year.
Earlier this month Village sold its cinema, film distribution and film production
units in Greece to a private European investor for $80 million.
Village said it also intends to sell its investment in the Czech Republic, also for
around $80 million.