Coast Entertainment Holdings Limited (CEH) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Ardent Leisure Group Limited FY '22 Financial Results Conference Call. [Operator Instructions] I'd now like to hand the conference over to Dr. Gary Weiss, Chairman of Ardent Leisure Group. Please go ahead.

Thank you, and good morning, everyone, and thank you for joining our call today. I'm joined today in the presentation by Greg Yong and José De Sacadura. I'm pleased to announce today that we've appointed Greg as Chief Executive of Ardent Leisure Group and Jose assumed the position of Acting Chief Financial Officer. FY '22 results conclude an important chapter in the history of Ardent Leisure Group. As is well known, the results released today reflect the final contribution of Main Event to Ardent Leisure. The FY '22 results reflect a significant turnaround at Main Event, which has taken place over the last 4 years with Main Event recording an EBITDA contribution, excluding specific items of USD 106 million, up nearly 175% on prior year. Over the last few years, following an extended period of relatively stagnant EBITDA contribution, the Main Event business was repositioned and revitalized leading to a doubling of EBITDA over the period. We are proud of the substantial turnaround achieved at Main Event over this period, and I particularly wish to call out and acknowledge the outstanding contribution of Chris Morris, Darin Harper and all our former colleagues at Main Event to the Ardent Leisure Group. The sale of our interest in Main Event was completed post balance date, and this has transformed the Ardent balance sheet. I particularly wish to point to Slide 8 of the presentation released to the ASX today, which produces a simplified balance sheet of Ardent moving forward. As will be observed, Ardent is now in a very strong financial position to continue to invest in and support the recovery of our Theme Parks business. Greg will take you through the performance of that business during the period. but suffice to acknowledge at this stage that there are some very positive signs that the recovery of Dreamworld is well underway with encouraging prospects for the future. I'll now ask Jose to deal with a group review.

Thank you, Gary, and good morning, everyone. I'll provide a bit of an overview of the group's performance for FY '22, starting with Slide 3. As Gary mentioned, FY '22 has been another significant year in the Ardent Leisure journey, with the group achieving a solid trading performance despite some ongoing impacts associated with COVID-19. The group's reported revenue from operations of $637.6 million represented a significant improvement on the prior year revenue of $390.7 million and was also $154 million or almost 32% above FY '19 pre-COVID levels. As the slide shows, this turnaround was driven by a solid performance in the Main Event business throughout the year and also a marked improvement and momentum within the Theme Parks & Attractions business, particularly in the second half of the year once restrictions are eased. The group's EBITDA, excluding specific items for FY '22 was $123.6 million, up $90 million on prior year and up $69 million versus FY '19 pre-COVID performance. At the bottom line, the group reported a statutory net loss after tax for the year of $97.4 million. However, it's important to note that this result has been impacted by a number of one-off specific items, including some significant expenses associated with the sale of Main Event, which I'll cover shortly. As at the reporting date of 28th of June, the group had net debt of $152.7 million. However, all debt facilities have since been repaid following the sale of Main Event. Turning now to Slide 4. As mentioned, Main Event achieved a solid result for the period. Its revenue of USD 426.2 million was up almost 60% on prior year and its EBITDA excluding specific items of USD 106.5 million was up almost 175%. This performance was driven by a combination of strong constant center revenue growth and the contribution of 7 new centers, including 4 new builds and 3 new centers acquired as part of the Summit business acquisition in March 2022. Main Event's constant center revenues grew 41% on prior year and 23.5% on pre-pandemic levels. In the Theme Parks & Attractions business, revenue of $49.5 million was up 37% on the prior year with visitation levels 18% higher and ticket sales and yields significantly improved. While the Theme Parks EBITDA loss, excluding specific items of $15 million, while slightly higher than the prior year loss of $10.3 million. This result is distorted by a net benefit of $10.5 million in government grants and subsidies received in the prior year compared to only $2 million received in FY '22. If we strip out the impact of these grants and subsidies, Theme Parks EBITDA, excluding specific items, improved $3.8 million or 18% on prior year. It's also worth pointing out that of this lost $12.2 million was incurred in the first half compared to a much improved $2.8 million loss in the second half, demonstrating a turnaround in performance trends of the business, as Greg Yong will explain in further detail. And of course, in December 2021, the business successfully launched its new Steel Taipan roller coaster, and I'm pleased to say that this new attraction has proved to be very popular with our guests. Slide 5 provides a summary of the group's consolidated income statement for FY '22. As previously mentioned, the group's consolidated revenue and EBITDA improved considerably compared to the prior year. The Main Event performance was further aided by favorable foreign exchange movements in the year, with its revenues growing 65.8% in Australian dollar terms. The group statutory EBITDA of $45.5 million was after $131 million of costs associated with the Main Event sale. These costs are largely timing related being recognized in FY '22 ahead of the sale, which completed in early FY '23. EBITDA was also impacted by a number of other nonrecurring specific items. Excluding these items, EBITDA of $123.6 million was up $90 million versus the prior year. The group's corporate costs for FY '22 amounted to $8.1 million, representing an increase of $2.2 million in the year. This increase was predominantly driven by increased insurance costs, and I'll be providing some further color on corporate costs towards the end of this presentation. And lastly, the group's depreciation and amortization expenses reduced by almost $15 million in the year. This was mostly due to an accounting standard requirement to CECL depreciation on Main Events assets once that business became classified as held for sale. This change in classification occurred upon signing of the sale agreement with Dave & Busters on the 6th of April this year. And therefore, the group's result reflects 9 months of Main Event depreciation in FY '22. Further segmentation of the results between continuing and discontinued operations is presented in Appendix 1 to this presentation. Turning to Slide 6. As mentioned, the group's results this year has been impacted by several one-off specific items. And here, we show further detail regarding these items. And as a reminder, a further breakdown by business unit is provided in Appendix 2 of the presentation. I'll now call out a few of the more material line items. Firstly, as a consequence of the significant appreciation in equity value of Main Event, the group's valuation of the Main Event LTI plan and RedBird option liabilities materially increased in FY '22. This resulted in incremental expenses in the year of $83.4 million and $7.5 million, respectively. The group also recorded expenses of $7.3 million for a portion of the Main Event sale costs, which had been committed and incurred in FY '22. And in addition, there was $32.9 million of unrealized derivative valuation losses recognized relating to forward foreign exchange contracts, which the group has put in place to hedge its exposure on the Main Event sale proceeds. And due to weakening of the Australian dollar against the U.S. dollar, the mark-to-market value of these hedges was a liability at the reporting date. Finally, the income tax line reflect $15.4 million of tax losses and deductible temporary differences which have not been recognized as deferred tax assets during the period. And notwithstanding this accounting treatment, the economic benefits of these unrecorded assets remains. I'd now like to turn our attention to the sale of Main Event on Slide 7. As announced to the market a few weeks ago, the group completed the sale of Main Event to Dave and Busters on the 30th of June for USD 835 million on a cash-free debt-free basis, representing a valuation of 8.9x December 21 trailing 12-month adjusted EBITDA. This transaction was overwhelmingly supported by Ardent shareholders with over 99% voting in favor of the transaction. Following completion, the group has used the proceeds to pay down its Queensland government debt and amounts payable to the Australian Taxation Office. And on the 13th of July, the group also paid a distribution of $455.7 million to its shareholders by way of a return of capital and a special unfranked dividend. Remaining sale proceeds of circa $153 million have been retained to fund the recovery and growth of the Theme Parks business. On Slide 8, we show the impact of the Main Event sale on the group's position moving forward. The table presents pro forma assets and liabilities of the group after adjusting for the sale of Main Event and subsequent use of the proceeds, which, as I mentioned, include the full repayment of debt and the distribution to Ardent shareholders. On a pro forma basis, the group's cash balances increased to $150.7 million, with further post completion proceeds of approximately USD 11.4 million still to be received on finalization of working capital adjustments. Following the sale, the group is now debt-free with unencumbered assets and a balance sheet, which has significantly strengthened. The large cash balance is expected to provide ample liquidity to recover, grow and develop the remaining Theme Parks & Attractions business going forward. Pro forma net assets following the sale are around $277 million, an improvement of $213 million compared to the reported position at 28th of June. However, it's also worth noting the considerable upside which potentially exists. Firstly, the numbers presented show Theme Park assets at historic costs, net of accumulated depreciation and impairments. Prior to the Dreamworld incident and COVID, the carrying value of Dreamworld assets was approximately $241 million, and the value of SkyPoint was just over $34 million, well above the carrying value is currently presented in the balance sheet. Secondly, the balance sheet presented excludes recognition of deferred tax assets relating to Australian tax losses of some $122.8 million and deductible temporary differences of $49.7 million, together representing a tax benefit combined of $51.7 million. And although these are not in the balance sheet, these assets remain available for use by the group in future periods. Finally, the numbers presented also exclude any recognition of further deferred and contingent consideration on the sale of Main Event of up to USD 14.8 million, which Ardent stands to receive upon the utilization of certain U.S. tax losses by Dave and Busters in the future. So as you can see, the future realization of value for the items that I've just mentioned, has the potential to materially increase the value of the group's net assets beyond what is shown here. I'll now hand over to our CEO, Greg Yong, who will walk you through the performance of Main Events and Theme Parks businesses.

Thanks, Jose, and good morning to everyone listening today. We've obviously got a lot of content to get through, so I'll speak relatively quickly this morning to allow some time for questions at the end. Certainly been a very turbulent 12 months. In fact, when we had this call a year ago, most of you were in locked down, borders were closed and the delta variant was running rampant. Thankfully, we're in a very different position today. And while the effects of the pandemic continue to affect businesses in very new ways, we are in a much better trading environment than we were a year ago. Turning to Slide 10 and Main Event. I think the numbers here are well stated. And I think we're more than happy to take questions at the end of the presentation with relation to this transaction. On Slide 11, much of the same, and I think we've already alluded to the simply incredible performance at Main Event coming out of the pandemic. Turning to Theme Parks & Attractions on Slide 13. We've outlined some of the meaningful success through in the business over the past 12 months. Each of these outcomes are accretive to our strategy, and I'll touch on these throughout today's presentation. I'm very proud of the ongoing improvements we are seeing in safety, which is the most important aspect of our business. The opening of Steel Taipan on time and on budget, demonstrates the capability of our team to execute significant capital projects and to work with key stakeholders such as regulators to achieve outcomes, which is a critical competence in this business. New concepts to drive meaningful incremental revenue were also a key theme. And most pleasing has been the growth in our organizational culture scores. This, with the aggregated benefit of our other initiatives has led to a significant improvement in guest service scores. These material enhancements physically and culturally in concept with a solid financial platform that Ardent is moving forward, as Jose has just outlined, lead me tremendously excited about the prospects into the future. Turning to Slide 14. And we've called out here that to accurately measure underlying performance would remove the impact of brands and JobKeeper from these numbers. This is particularly important given the size of the organization and the associated materiality of these on our results. With government support in FY '21, representing a significant component of total income. As you can see, we have seen positive movement in each of our key indices and this is particularly notable given the very poor trading environment in the first half as a result of border closures and lockdowns. On Slide 15, we outline the statutory results. You can clearly see the impact of brands on this slide. As Jose mentioned earlier, revenue finished up 37%. And whilst expenses have increased in line with business activity, we are comfortable that the spend is well below the pace of revenue growth, which essentially leads to an improvement in margins. We remain very comfortable with our annual past performance, which is obviously critical for the first half of the year. In fact, annual pass sales for FY '22 were the highest that we've seen since FY '17. This supports our other indicators, which suggests that local guests are starting to come back to the brand in a significant way. Excluding one-off grants and subsidies, EBITDA improved by $5.2 million in the prior year. As I've mentioned several times, the first half of the year was extremely answered with borders closed, locked down through the period and the need to get the lifetime from a cost perspective without the benefit of material government support. Given this, the result really is a tale of 2 halves. On Slide 16, we've provided some deeper insight into the second half and furthermore into the July '23 trading. To give you an appreciation as to the considerable change in trajectory that we've seen since the borders reopened. For the second half, ticket sales and revenue for Dreamworld and WhiteWater World were up significantly, and more importantly, with the highest that we've seen since FY '17, the year that the TRRR tragedy occurred. These top line results, coupled with the business transformation initiatives that we've implemented, led to the lower second half EBITDA loss of business has seen since FY '17. And in July, we have seen some significant improvement in ticket sales and revenue, which is understandable when considering the difficult trading period last year. Importantly, though, ticket sales and revenue were the highest that we've seen since July 2018, on the back of the lowest expense numbers that we've seen since July 2018, culminating in an EBITDA profit for July and moreover, the highest EBITDA profit for July since 2018. Turning to Slide 17. And as we've outlined in previous presentations, our pervasive strategy is in many ways a flight to quality across all aspects of the business. In line with that change, we're seeing good responses to our stratified pricing architecture, which was implemented last year. This has allowed us to grow admission yields while maintaining sales velocity by having offers that cater to all elements of their past base. This means that you can still get a very affordable path to our parks, if that's what your family requires, but it also provides clear opportunities for guests to select more value-packed options should they desire. The work that our team has done on digital has meant that the past to purchase clearly demonstrates here the value along the guest journey. And as a result of this optimization, we've seen the majority of our total sales fall into our highest yielding passes. As an aside, the average price of our aggregated ticketing mix at year-end was 59% higher than what we were seeing back in FY '17. And our out-of-park businesses have been -- our in-park businesses have been no different. Organically, we committed to making material improvements in our F&B offer. And whilst we'll always have opportunities for improvement, our guests have recognized the change, and we are seeing solid incremental financial upticks and guest feedback scores. We've also seen very strong growth in our retail and experienced businesses. I think the [ sector ], I'm particularly proud of is the collaboration with our team and LEGO to launch the Dreamworld Online LEGO store, which has seen simply incredible results. All of this, along with the implementation of initiatives like Ride Express, Slide Express and the Steel Taipan with experience has led to an increase in in-park yields of over 40% since FY '17. Moving to Slide 18. And I know as certain followers of our business, all of you will be aware of our exposure to weather events and moreover, the negative impact of these can have on financial performance. What makes our second half performance even more outstanding is the fact that we suffered what can only be described as just terrible weather for much of the half. For the period from January through to June, almost 60% of our trading days were rain affected. And this is a clear impact on attendance and therefore, revenue performance. I can tell everyone here was very buoyed by what was, in our view, one of the best Aprils we've seen in the entire in the business. And then almost immediately, we felt that they would have one of the worst May results ever as a result of just persistent rain throughout the month. The statistics tell the story with rain-affected days for the half being twice the monthly averages that we've seen over the past 30 years in the Gold Coast. As an organization, we are very clear at not giving guidance, and I can tell you that notion extends very much to give predictions about the weather. But what's almost certain is that if rainfall anything like traditional averages, the business performance would have been clearly even stronger. On Slide 19, we've attempted to give you a picture as to the impact of international visitation, which has remained at largely negligible levels. International represented anywhere between 17% and 19% of the business and the lead up to the pandemic. And while some of that was quite dilutionary in particular markets like China, the yield profile across all the markets was actually quite disparate. What's clear is that as international returns is an upside opportunity for us to recapture that business. What's also clear is that we have a unique opportunity to contemplate how we've repriced to those markets. That may not simply be about putting out price, although it probably would likely be part of it. But it will also involve us being more sophisticated in the types of products that we offer to which segments, be it [ OTAs or FIP guests ]. On Slide 20, and with able assistance of [indiscernible], we've outlined what we believe are the 4 key things to the business over the coming few years. I'll discuss each in some detail. With safety, business transformation and people being relatively straightforward and revenue having some further tenders to the plan. As I've outlined to each of our key stakeholders, safety is our fundamental focus. We have a responsibility for the safety of our team, our guests and our animals, and I can assure you that we take this responsibility very seriously. And you can see a number of those initiatives on Slide 21. In my opinion, we have led the broader industry in terms of our diligent and systematic response to COVID. Similarly, our team has been at the forefront of next-generation safety systems and the significant works related to our application for major amusement park licenses as part of the Queensland government's world-class safety legislative framework. Fleet modernization continues with substantial improvements to be invested into iconic attractions such as the giant drop, which is undergoing a major refurbishment as we speak. Any [indiscernible] will tell you that systems are one thing, but without a robust culture, performance is far from optimized. And I'm very pleased to say that we have seen what can only be put as a transformative change in our culture over the last few years. This is evidenced by our internal survey results. And moreover, from feedback that we've received from third parties, including safety audits, independent contractors and our insurers. I cannot emphasize what a significant amount of effort and passion has gone into this area of our business. And to that end, I'd like to thank our operational members of the executive team, in particular, [ Adrian ] Summers, our Director of Engineering; Michelle Erasmus, our Director of Operations; and Dwayne Clark, our General Manager of Commercial & Facilities for their extraordinary leadership and moreover, for their efforts of their extremely talented teams. Further, I must recognize the incredible contribution of James [ ReGrove ], our GMS Safety Systems and Guy Marshall our Manager of Safety Assurance. Post James and Guy have brought by any measure, world-class commercial aviation protocols to our business and have tailored them to meet our context. As we move into the future, our focus is on consolidating and continuously improving the good work already done, whilst turning our attention to the emerging risks on the horizon. Turning to Slide 22 and business transformation. Over the last 3 years, we have worked very hard to run a more efficient business. Safety considerations will always take precedent over costs. And there is no clear proof in the fact that we've had significant cost reductions since FY '17 despite record spending on Ride and Safety system improvements. Decisions that we've taken, such as removing older and economically unviable attractions, closing the water park in cooler months, rethinking the deployment of variable labor and running an incredibly lean back end to the business have all contributed to these results. We must remain extremely disciplined on maintaining this level of diligence whilst investing in technology to generate new efficiencies in the organization. This starts with a new ERP system and a contemporary time and attendance system. And I must stress that we've spent a great deal of time ensuring that these solutions are appropriate for an organization of our size and make the job for our operational teams easier, not harder. In fact, I've seen too many organizations put in new systems that drive additional complexity in the business and take skilled people like engineers or chefs away from what they do best and put them in front of a computer to feed the AI machine. That is something we are very keen to avoid here. And to be frank, I think that I will simply not let happen in this organization. On Slide 23, we outlined the key tenets of our plan to grow revenue over the coming years. Other than safety, these are the most critical elements of our strategy to move the business to breakeven and towards historical financial performance. The first element is to be brilliant at the basics. It's no secret that gets to come to our parks to experience the traction first and foremost. And that is why it is so important to ensure that our attraction availability and our traction reliability are focus areas for our team. Often this and safety actually go very much hand-in-hand. While maintenance is a non-negotiable part of our business, we have reshaped our maintenance program to meet our maintenance objectives whilst also mini-mark a number of attractions that are down at any one time. This may even lead us to complete maintenance past before their due, which can be somewhat financially less efficient, but in order to have a ride available for a peak period. Similarly, our focus and reliability is as much a measure of good maintenance management as it is on having attraction available for the guests to experience. At the same time, I see absolutely no reservations on having an attraction close if we perceive there to be any risk whatsoever to safety. From a sales and marketing perspective, we have seen very pleasing results in the digital and mobile-first initiatives that I've previously discussed. Our newly designed website has been specifically built with mobile front of mind. And as I outlined earlier, our past to purchase has been optimized and is delivering conversion rates to higher priced tickets that are much greater than what we initially anticipated. We continue to work on further leveraging tech to provide a more frictionless experience for our guests, and we intend on extending this work through the other parts of the business, such as Main Event over the coming few months. Lastly, and fundamental to incremental growth is our product Master Plan, which I'll speak to shortly. Over to Slide 24. Our efforts to be brilliant basics and as a result, deliver a dream or difference to our guests are starting to bear fruit. I've spoken about the range of different areas that we've been working on from attraction availability to F&B and pretty much everything in between. What has also been a focus for us is being the best of being busy. And this means detailed planning in advance of the school holiday periods, a very analytical approach to recruitment and scheduling. And more importantly, ensuring our attractions have additional units maintained and ready to be deployed for peak periods. This entails seems like having additional trains on rollercoasters, additional dodging cars on tracks, but it also means having people that are incredibly well trained and supported by a management team, our team at work weekends that work most every day in holiday periods in the parks and on the tools, so to speak, to be able to meet the demand if and when it comes. All of these measures have led to absolutely incredible results. Our Net Promoter Scores are up significantly, some 31% -- some 31 points on the prior corresponding period. Furthermore, our global review index scores, which are essentially an aggregation reviewed principally from places like Google or TripAdvisor have led our parks to being rated as the most popular best theme park experience on the Gold Coast for each of the school holiday periods since borders have reopened. I'm tremendously proud of our team for the care and the attention that they give to our guests each and every day, and these quantitative results are a testament to those efforts. Turning to Slide 25 in the first part of our major product Master Plan. And I've spoken at length about the importance of events and Tentpole events at that to our revenue plan. These events add significant value to our annual parts. In fact, we can imperially measure enhanced propensity to purchase passes as a direct response to marketing of these events. Just as importantly, they provide a distinct reason to visit through existing pass holders or revisit guests that are looking for a unique addition to the theme park experience. We now have a place that is absolute -- calendar, which is absolutely world class. In fact, I doubt there is a stand-alone regional park on earth that has this level of activity in the calendar. On Slide 26, you can see Winterfest a fantastic event, which I know you're all very familiar with. And we also ran our second Dreamworld Fun Run. A great event for the entire family with both the 2-kilometer Fun Run and a 5-kilometer race to be more competitively minded. I think the experience of running through our water park pass [indiscernible] wildlife, bribes and attractions and with our [ favorite ] characters, made through a completely unique event. And not only did it sell out, but we raised over $10,000 for local charity living. I have to say that I'm extremely excited about this event and with a ton of new ideas to bring it to a whole new level in 2023. In fact, this morning, I spent a little bit over an hour with our 2 U.S.-based directors, from Disney, Randy and Aaron talking about their experiences in this various space. Our Spring County Fair, which has the cutest baby animals, beautiful garden decoration, live music and incredible homestyle food offerings and much more was launched to rave reviews last year and is returning this September. On Slide 27, Happy Halloween has become a family favorite. We were the first to bring our whole of park family Halloween experience to the Gold Coast. And last year with some fantastic embellishments, we had the highest attendance and the highest revenue since the events inception in 2019. Through our local Kiwis at which there are many on the Gold Coast, and also our esteemed Chairman. By hanging day is a very special occasion, and we were pleased to present our iteration of that event earlier this year. Based on the great feedback that we've received, we have decided to make Waitangi Day at Dreamworld an annual event. In April this year, we launched our inaugural Street through Festival. Given our extensive research into food-based events, we had very high hopes, but we were absolutely blown away by the response of the market to this new offer. Our April ticket sales were better than pre-incident ticket sales and NPS scores were materially higher than the same period last year. You can be assured that this will be a regular fixture at Dreamworld moving forward. And lastly, over December and January, we delivered our 40th birthday making the reactivation. We presented the [indiscernible] live and we presented [indiscernible] live. Executing each of these individually is a significant undertaking, let alone together over a period of an month or so. As you can tell, this is an exhausting list of activity and the work that goes into simply replicating and enhancing existing events each year is substantial. If you take that and then add on top of the fact that we launched the Dreamworld Fun Run, the Spring County Fair, Waitangi Day and the Street Food Festival, along with all the old activations in the last 12 months and have a very small team, and you can get a glimpse of the dedication and the caliber of our people. Turning to Slide 28 and new attractions. Firstly, we remain committed to refurbishing iconic attractions wherever possible. This year, we reopened an all-new Dreamworld Express with state-of-the-art new rolling stock designed to allow [ wheelchair and heavy ] carriage and hosted new safety features. I can say it's been an absolute hit with guests of all ages. We're also completing a multimillion dollar refurbishment of Dreamworld's Giant Drop an attraction that has become a beacon for the part and is seen from all over the Gold Coast. But new attractions, though, plan and simple is where the rubber meets the road. These are some of the most important decisions that we'll make as an organization and as such, the degree of critical review, analysis and modeling that we apply as commensurately significantly. And it's no good to be able to procure new attractions if you can't get them open. And I'm very pleased with the fact that our singular is still tight and one of the most ambitious roller coasters in the Southern Hemisphere, on time, on budget in the midst of a global pandemic and with unconditional design registration from our regulator. This gives us a very high degree of confidence as we consider our future options. And I can say today that those future options are very much well advanced. We have a Board-approved product pipeline that will bring new news to the parks from this year right through to 2025. And in fact, we've already executed several contracts in that regard. We intend to make some more [ fulsome ] announcements on these very exciting plans prior to the end of the calendar year. Turning to Slide 29 and complementary development. As we've outlined in the previous presentation, we see significant value in our surplus land holdings. At the same time, and particularly given our renewed balance sheet position, it is our first priority to achieve the highest commercial return. In some cases, the parcels of land that are currently land locked, but are expected to see public growth connectivity in the near term. We're not looking at divesting this land for less than we believe is realizable once these connections are in place. In terms of land that is -- that we've been marked for a combination and other development. Our efforts towards working to achieve these outcomes have progressed and I can confirm that management and the Board have been engaged with various local and state authorities as part of this process. An area of emerging opportunity is for us to better swap the existing assets and to develop new revenue streams that are ancillary to our day-to-day operating business. To that end, we have recently launched Moonlight Night Markets, which are held every Friday and every Sunday here at Dreamworld. This is an opening of a new business designed to leverage both existing infrastructure and existing core competencies within the organization. We have been extremely pleased with the guest response to the concept and moreover, the incremental financial performance has exceeded our base case expectations and trending rapidly towards exceeding our highest case scenarios. We anticipate with warmer weather and some additional very targeted investment that this concept will become a material new revenue stream and EBITDA stream for the organization. Similarly, through a great piece of innovation for our commercial team, we launched our online store for LEGO a little over a year ago for what was a very modest investment. Performance in this initiative is well and truly exceeded all of our expectations with the online segment of the business generating over $1.5 million in the first half -- in the first 12 months of launching. Again, our announcement suggests that this is almost all incremental with the LEGO store continuing to exceed historical performance. We are -- we are investing against several other opportunities along these lines, given the very encouraging success stories. On Slide 30, as I've discussed throughout today's presentation, we have an incredible team here at Ardent. Sound strategy is one thing, but execution is equally critical, and I'm very happy with the caliber of the people in place and very thankful they've embraced a high-performance culture, one that is clearly required for an organization in the midst of such a significant turnaround. From a cultural standpoint, our employee Net Promoter Score, or eNPS, is at an all-time high. In fact, from 2018 and 2019 through this day, the percentage increase is so significant, I couldn't bring myself to include it in the deck. But I can tell you that it's hundreds and hundreds of percent up or margins and in terms of pure points markedly better than cultural scores that our semi businesses globally. Despite this, we have much to do and whilst our culture is healthy, I still see a massive amount of potential to make Ardent a place that people desire to be a part of. Lastly, myself and our leadership team are focused on making a paradigm shift around diversity, equality and inclusion in the organization. We're not doing this because it's topical. We're doing it because it's right. Having a much more representative team or fairly compensated in all levels of the organization mirrors the type of families that we serve each and every day here at Dreamworld. We will shortly be launching our 3-year DEI strategy, and I'm looking forward to seeing the positive impact of these changes and how we do business here at Ardent. In closing, and on Slide 31, I have never been more confident in the recovery of the business than I am right now. Despite what was a very difficult first half, we have seen a significant change in performance with the best second half EBITDA results since FY '17, the strongest ticket sales performance since FY '17 on the strongest yield since FY '17 and on the most efficient cost base since FY '17. And all of this despite twice the amount of rain-effective days that we've ever seen and with little to no international visitation and with record spending on safety-related initiatives. If you couple these indicators with the fundamentals of our very robust balance sheet with no debt, 100% owned-land holdings in one of the fastest growth corridors in Australia and sufficient cash to deploy strategically by a proven leadership team and we have a very compelling thesis. It would be remiss of me not to ignore the potential headwinds, and we are obviously very cognizant of the macroeconomic environment, both in Australia and overseas, let alone the impact, but continue to assess as a result of the pandemic, mainly in availability of skilled labor. But we do believe that we are in the best shape possible to manage these conditions as they present themselves. Finally, I'd like to thank our entire Ardent team for their commitment and their dedication over the past 12 months. Thank you, and I'll hand back over to Jose.

I'll just very quickly conscious of time, I just tackle or just to note, Pages 33 and 34 of the presentation. Just a word or two on the -- on corporate costs, you'll see there that there has been an increase during the period, largely attributable to an increase in insurance costs. There are also additional charges at the corporate level arising out of the considerable work that went into the sale of Main Event to Dave and Busters. Central costs will continue to be a matter of focus for the Board going forward. And that's probably all that needs to be said just at this moment. So we'll open up to questioning.

Your first question comes from Nicholas McGarrigle of Barrenjoey.

Just wanted to touch on July as a month. Can you give us a sense on a more normal environment, say, FY '16 or earlier, was there a lot of seasonality in July? Just trying to get a sense on where that profit stands in the broader mix of the year.

Yes. Nick, Look, July is an important month. It's almost all school holidays. So it's certainly not an off-peak period, it's not in February or May or in November. Almost the entire month is made up the school holidays. So in terms of its ratio, if you will, comparatively to other months in the year, it's in the top 3 or 4 months in the entire year.

And just in terms of the profitability in July, obviously benefiting from that extra attendance. But in terms of annual parts, you obviously look that monthly you've had a great experience there. So do you expect that even in sort of in August or September when things will be quiet that you can maintain profitability.

Look, we still are very hesitant to give guidance given just how uncertain the environment is to what degree is in today. Look, what is a factor is deferred revenue balances as a result of annual pass holder sales. And as we've mentioned in the past, we try to talk both about ticket sales as well as revenue given that they are actually distinct different in this organization. So look, we're really happy with July. Look, months like August are quite interesting though because as I've outlined with regard to international, the degree of international that we're seeing compared to what we were seeing in those off-peak months previously is still quite a gap. And so as I say, we don't give any guidance, but yes, that's still a factor in our thinking.

So better look at the deferred revenue balance in payables. So just there's a few different balances there, but which one should we look at to get a sense on the sort of momentum you pick annual pass sales?

Yes, Jose, it might be best for you to answer that. But in terms of annual pass sales or sales in general, we have called out the change in performance around just net ticket sales, which is an aggregation of single day, multi-day and annual path, and you can see the growth that we've had in those in the deck. But in terms of the actual accounting treatment of them in particular, where you can locate that, I might just ask Jose to make a few comments.

Yes. Nick, if you have the financial statements in front of you, notes 14 of the financial statements, the payables note outlines the deferred revenue balance there. So that is from the Theme Parks revenue on annual pass or multi-day passes with revenue to be released over the period of the past. In past years, that balance would have typically included Main Event, but Main Event has been stripped out the [ CN ] and presented separately as held for sale. So that relates pretty much to the Theme Parks.

Yes, understand. I guess because that went from 16 down to 11.5. Does 16 includes the Main Event. That's fair. That's fine.

Yes, that's correct.

Just in terms of wages I imagine that the new minimum wage standard is going to have an impact up in the [indiscernible]. Can you just comment on wages just inflation more generally?

Yes, absolutely. Look, it's a very competitive market, as you well know. And we've passed on the increase in wages that we're obligated to do so. Look at pressure on the organization. I think what I always called out though is that we've taken some very significant measures to drive efficiency in the organization. And a lot of those measures mean that the business today is less susceptible to what those changes might have been in previous years. And so if I point to things like the water park not being open in off-peak periods, attraction rationalization. Those type of things somewhat reduce that risk, but it is certainly there. And we are seeing some impacts around that, not only in labor but in areas like F&B, supply chain and things like that. Look, we believe that there's a degree of opportunity there to price against that. And as you can see from our numbers, we have been doing that. But we're quite mindful about just taking what we see as the bluntest weapon with price and trying to make sure that as we move price, we enhance value at the same time. And I think there's a few case studies around the place where if price is simply the only thing that you contemplate, and I think gets react pretty negatively to that if you can't demonstrate commensurate value.

Yes, that's fair enough. Just in terms of the property plan, has anything evolved there in terms of the thinking on which parts you redevelop to take a partner or look to divest?

No, nothing's really changed there, Nick, in terms of our thinking on it. We identified some time ago what that looks like in terms of our land holdings and how much is, in our view, surplus to our needs. That hasn't changed in terms of how that all kind of looks. If I just give you the high-level numbers, we're sitting at around 56 hectares here. We've got 34 that are used, and we've got degree of residual. We've identified very clearly in our minds what part of that would be surplus and ultimately divestible, and what parts we think we can just get a higher and better use at off. As I mentioned, though, some of the areas that we've called out as being surplus and prospectively able to be sold are not quite ready today to be moved on given and connectivity issues and such. And we have a pretty good idea as to what that looks like. And as I called out in the prepared remarks, we're just not in a hurry to do that without getting the highest potential value that we can achieve. And I think as Gary has called out a number of times, the lands are not getting any less valuable here in the Gold Coast, particularly in [indiscernible]. So we're keen to make it happen, but we absolutely want to achieve the best positive price.

Your next question comes from Allan Franklin at Canaccord Genuity.

Just interested in some discussion around per capita spend, please. On some very rough workings, looks like it was $60-odd in the second half, just to what extent we can use that as a rule of thumb moving forward? Or is there any overlay of seasonality to think about within that number?

Yes. Look, in terms of the yield spend, look, we've done a lot of really good work there. There's no doubt about that. As I called out, the fundamental driver of that is bigger pricing, and we've called out the ticket prices today versus around the time of the incident. We're near on 60% up on that period. The only thing I'd say to you in terms of your own workings would be that the mix is quite different. And as I called out, 19% or 20% roughly of our attendance in the parks were international. And we expect that, that will return over the next period of time, how long that takes, and we're not really sure. And as I called out also, the yield profile of international is quite disparate. You've got China, which is very low yield and you've got other markets, which was very close to the yield that we see out of the local market. The only thing I would say is that as we see international coming back, if you aggregate international, it's almost certainly somewhat dilutionary to the per cap that we're doing today. So it's something getting mindful of. But in terms of seasonality, look, not really any material changes there. In fact, what we've seen over the second half has been a much stronger mix of single day entries. And as you know, that's a slightly lower yielding product for us than annual parts. So that is a fact of the contemplate, I think, is just the change in mix that's been carrying in the last years.

Yes, perfect. And then perhaps a slightly tricky one, but just interested in any disclosure you can provide on the month-to-month variations in attendance over that sort of second half with the view of sort of trying to get to a guide of what might have been a missed opportunity on the attendance front in the region of 10%, 20%, 30% in terms of what you could have done better with the committee?

Yes. If you look at that one, I can tell you, we don't really have a particular number, we can point to on that, to be frank. We just call out those 2 key things. You can certainly make your own -- derive view on that based on what I've called out, which is rainfall by month, and you can probably very closely link rainfall by month to deviations in attendance and thereby revenue by month. And then similarly, if you think about international, it's probably less fluctuations -- you see less fluctuations in international over the period of the half. But look, to answer your question directly, we haven't got a number that we're comfortable to call out, but we've called out the 2 really significant factors in our mind would have been a stronger result.

No, perfect. And just last quick one, please. Just on pricing. I appreciate you obviously have shifted your ticket pricing. You do still look to be either flat to a sort of 30-ish percent discount to Village depending on the past level, but just your ability and/or interest in doing price discounting at certain times of the year? And what's the catalyst for that? And how do we think about that if we do come across a position where you are discounting a day pass your past?

Yes, look, we've got an open mind to promotions at times. But very much -- if we look to do that, there's a lot of strategy in thinking behind that, and they're very much ring-fenced and designed for a particular objective. I can say to you, though, in the broadest terms, that our view is that we want to continue to see yields move up over the coming years. And we believe now that we're starting to have an offer that is commensurate to the increase in price at the time. In terms of the difference between us and others in the market, look, I think if you look at our pricing and how we structured it, our single day offer is typically priced at basically at the same level as single other parts in the market. And that's purely because of our belief that our single day offer is as good, if not better, than other properties on the Gold Coast. And if you think about particularly the offer with Dreamworld, WhiteWater World, our animal experience is all in one place, so many wells in one, if you will. We just believe that's a fantastic offer for a single day visit. If you look at our annual passes we priced that in terms of what we think is appropriate in terms of value compared to other annual pass offers out in the market. In saying that, we still see upside there. We talk about price and we talk about yield pretty much on a daily basis here, and we think very carefully about that. But you can be assured that there won't be any -- what I would term relatively crazy promotions that you might have seen in the past. That's just not a part of what we do going forward.

Your next question comes from Brian Han at Morningstar.

Firstly, on most approved more tickets and annual passes sold through your digital channel or -- are there still out of sales channels or meaningful walk-in sales?

Significantly through direct and digital. Brian. Look, it's been a change, I think, across the industry over the last several years. We've done a lot of work in that space. One of the things that we've done is rationalize our retailer base. Look, retailers are really important to us. So don't get me wrong. It's not as though we don't rely on retailers to a degree. But I can tell you that the amount of digital that we indirect that we sell today is so much more than what it used to be back 3 or 4 or 5 years ago. So the bulk of our ticketing mix is so on direct.

Is that more like 70-30?