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

Thank you for standing by, and welcome to the Ardent Leisure Group Limited 2023 Annual General Meeting. I would like to introduce Mr. David Haslingden, Lead Independent Director, to begin proceedings.

We'll just wait for the last people to grab their seats. Good morning, everyone, and welcome to the Annual General Meeting of Ardent Leisure Group Limited, which this year is being held at our SkyPoint Observation Deck on the Gold Coast. My name is David Haslingden. And I'm the Lead Independent Director of Ardent Leisure. I'd like to begin today by acknowledging the Yugambeh people, traditional custodians of the land on which we're meeting today, and pay my respects to their elders, past and present. I extend that respect to any Aboriginal and Torres Strait Islander people joining us today. For those attending in person, welcome to SkyPoint. It's our pleasure to showcase to you one of our most important and best-performing assets. Today's meeting will be chaired by Dr. Gary Weiss. Unfortunately, due to unexpected personal circumstances, Gary has been unable to join us in person in the room here today. But he joins us by telephone from Sydney. I'll now hand over to Gary for some opening remarks and to open our AGM formally.

Thank you, David. Good morning, everyone, and welcome to the Annual General Meeting of Ardent Leisure Group Limited. I am the Chairman of Ardent Leisure, but -- and please accept my sincere apologies that due to personal circumstances, I am unable to attend SkyPoint in person today. Similar to the prior year, this AGM is being conducted in a hybrid format, allowing shareholders to participate either in person or virtually via the online platform. Before I formally open the meeting, I will outline some procedural matters on today's meeting for those who are joining us virtually. If you experience any technical issues during the meeting, we have published a Virtual Meeting Guide on our website, which includes details on how to seek assistance. A recording of today's meeting will be available on our website later this afternoon. Shareholders who are online will have the opportunity to ask questions via the virtual meeting platform. [Operator Instructions] If you have questions already prepared, please submit them now on the platform so that we can consider them as and when we come to the relevant agenda item. You do not need to wait until the relevant item of business. And at the conclusion of the meeting, we will endeavor to respond to any shareholder questions of a general nature that may not have been addressed in the business update or if we consider a response would benefit all shareholders. I now confirm that a quorum is present, and I declare the meeting open. It is my pleasure to introduce to you the members of the Ardent Leisure Board in attendance today. As you heard, David Haslingden is in attendance in person at SkyPoint. And joining us on the phone from the United States are Brad Richmond, Randy Garfield and Erin Wallace. I would also like to welcome members of the executive team: Greg Yong, our Group Chief Executive Officer; and Jose de Sacadura, Group Financial Officer, who are both in attendance at SkyPoint today. The group's auditor, Ernst & Young, represented by Anthony Ewan, is also in attendance today on the phone and is available to answer questions in relation to the auditor's report. The format for today's meeting will be as follows. I will start by providing some opening remarks regarding the activities and performance of the group for the year and will then hand over to Greg to provide more detailed updates on the Theme Parks & Attractions business. We will then move to the formal business of the meeting and put to shareholders the resolutions set out in the notice of meeting. All resolutions to be put to the meeting today will be decided by way of poll. Shareholders attending the meeting will be able to cast their vote using ballot papers if attending in person or the electronic voting card received when your online registration is validated if attending online. Further information and assistance with online voting can be found in the Virtual Meeting Guide available on the group's website. FY '23 marked another significant year for Ardent Leisure with the group delivering a consolidated net profit after tax of $665 million, driven by a gain of $682 million on the sale of Main Event and an improved performance of our Theme Parks & Attractions business. Revenue for the year of $84 million was up 70% on prior year and was 25% higher than FY '19 pre-COVID levels due to an uplift in ticket sales and visitation and improvements in per capita yields. The business also reported $4.7 million EBITDA in FY '23, which was the first positive EBITDA result since FY '16, representing an increase of 131% on FY '22 and 147% on FY '19 pre-COVID levels. I'm pleased to report that despite some significant economic headwinds, growth in the business is continuing into this financial year, albeit at more moderate levels. In the first quarter of FY '24, Dreamworld once again saw its highest ticket sales since FY '17 and also achieved a record performance at SkyPoint, notwithstanding the relative lack of international visitation. This supports our view that Dreamworld remains on track to return to historical performance as its park refurbishments and renewal program progressively rolls out. I would also like to highlight the solid financial position of the group with $141 million cash on hand at 27 June 2023, no debt and full ownership of our substantial real estate holdings at Coomera and SkyPoint. As previously announced, the group has a pipeline of exciting new attractions to be delivered over the next 18 months. This significant investment is an important component of the group's strategy for driving performance of the business back to and potentially beyond historical levels. While some preliminary expenditure occurred in FY '23, the significant component of this will come through in FY '24 and the first half of FY '25. As announced in August, we have achieved a resolution of the shareholder class action, which subject to final court approval will be settled for an all-inclusive amount of $26 million, of which Ardent will bear a one-off cost of approximately $4 million. This will conclude the last outstanding legacy issue arising from the 2016 tragedy at Dreamworld. Finally, due to the improved recent performance of the business, we have determined that a portion of our cash balances are surplus to near-term needs, and we announced in August an on-market buyback of up to 10% of the group's issued capital over the next 12 months. This buyback commenced on 18 September 2023. And to date, approximately $2.3 million of cash has been expended in share purchases on market. As we have previously stated, further capital management initiatives will be reviewed, depending upon the ongoing performance of the group and its funding requirements moving forward. We believe that the cash retained in the business is prudent in the current economic environment to provide headroom for our operating and capital requirements as well as to provide capacity and flexibility to pursue earnings-accretive opportunities as they arise. Slide 6 of the AGM presentation provides an overview of the group's balance sheet as at 27 June 2023, and a summary of the opportunities, which we believe exist for the group to unlock future value for shareholders. In June 2023, the group had consolidated net assets of $254.6 million, which is materially higher than the position reported at the end of FY '22. With a strengthened balance sheet, the group is well placed to invest in and support the recovery and growth of our Theme Parks & Attractions business. I would also like to take a moment to remind our stakeholders of potential upside opportunities for the group moving into the future, notably the following. The potential for uplift in value of PPE and intangibles for Dreamworld and SkyPoint, which are carried at depreciated historical costs. In FY '16, the fair value of these assets was $275 million, well above the book value in June 2023 of $130 million. With sustained improvement and growth in the business, the potential to deliver further value is therefore significant and includes the possibility of further upside from enhancement and value of surplus land, depending on the outcome of the current development application lodged with the Gold Coast City Council. SkyPoint represents one of the group's best-performing assets. With performance now at record levels, it is considered to be a significant asset of the group with a market value believed to be in excess of its current book value of $11 million. To assist investors in understanding the valuation upside which currently exists, the group is commissioning a market valuation of this asset, details of which will be released with our half year results in February 2024. In addition, the group has tax losses and deductible temporary differences with a tax benefit of $53.7 million, which are not currently recognized in the balance sheet. Notwithstanding, these are available for use by the group in the future when it returns to a positive taxable position. And lastly, the group has yet to recognize its share of contingent consideration receivable from the sale of Main Event amounting to approximately USD 8.8 million. This will be received upon future utilization of Main Event tax losses by Dave & Buster's, which we understand may start to occur towards the end of this calendar year. The Board remains confident that with a robust financial position and exciting pipeline of capital projects to be delivered over the next 18 months, the group is well positioned to benefit when economic conditions normalize and international and domestic visitation return to historical levels. On behalf of the Board, I would like to acknowledge our dedicated team members across the group for their valuable contribution and their passion in driving the performance of the business. It is now my pleasure to invite Greg Yong to provide an update on the Theme Parks & Attractions business. Following this update, we will move to the formal business of the meeting.

Thank you, Gary, and good morning to everyone both on the line and also for joining us here at SkyPoint. Before we start, I'd like to mention that we gave a comprehensive summary of the FY '23 results earlier this year. And for those interested stakeholders, please refer to the FY '23 results presentation in August for further details. Today, I intend to provide a brief summary of those results and an update on the business for the first quarter of FY '24. Turning to Slide 8. And Slide 8 shows the key financial highlights for FY '23. FY '23 marked an important milestone for Ardent as the Theme Parks & Attractions business achieved its first positive operating EBITDA in 6 years. Notably, this result was ahead of our internal forecast, which was predicated on minimal new product being brought to market over the course of that year. We're also very pleased to see growth in admissions metrics despite international visitation still at a fraction of what we were seeing prior to the pandemic. Per capita spending continued to grow, up 22% on the prior year. And as a result of this, coupled with the increased attendance, headline revenue was up over 70% on the prior year. While the average per head spend in FY '23 is pleasing, this was aided by the tailwinds of lower international attendances, which are typically dilutionary to average ticket prices, and a ticketing mix unusually skewed towards local annual passes, which inflates our overall per capita results. As we've indicated in earlier presentations, we expect to see a moderation in per capita yields as international and interstate attendances gradually return. It's also notable that the business was able to achieve significant increases in spend with no negative impact on guest sentiment. And that is something that has been difficult to replicate in many consumer discretionary businesses. Our aim continues to be to provide safe, high-quality guest experiences at excellent value for our guests. Turning to Slide 9. Operating revenue and total ticket sales for the first quarter of FY '24 continued to show growth, albeit at a moderate level compared to FY '23, which was anticipated, given we were cycling a COVID-impacted FY '22. We remain cautious as the current challenging economic environment weighs on consumer discretionary spending. Nevertheless, revenues and ticket sales for the first quarter have been at their highest levels since FY '17. Theme Parks & Attractions EBITDA for the first quarter of FY '24 has once again been positive. The business is countering some inflationary headwinds on several fronts, from the cost of labor to energy and heightened supply chain expenses. We continue to monitor costs closely, and we're working hard to find offsetting efficiency savings wherever possible. Notably, our commitment to safety remains our #1 priority. And we will not hesitate to commit funding to safety matters as and when they arise. Now this may impact short-term performance from time-to-time but is absolutely fundamental when we think about this business in a sustainable way. I also note, as Gary did, that SkyPoint's first quarter performance in FY '24 is its best on record, despite international attendances remaining low and much lower than pre-pandemic levels. Whilst we are pleased with the first quarter performance in the business, I would like to remind everyone that the anticipated recovery will not be linear, especially in the current economic climate. This is not dissimilar to many other companies in the consumer discretionary sector. And we expect performance to continue to improve as economic conditions ease and the group's pipeline of new and exciting attractions comes online. Turning to Slide 10. This year, we have already delivered the Waitangi Weekend, Dreamworld's Street Food Festival, Dreamworld's Fun Run, Winterfest, Spring County Fair and Happy Halloween events. In late August, we also launched our Dreamworld 40 Day Giveaway campaign, which gave guests the chance to win a major prize valued at over $100,000. The campaign was very successful with over 75,000 entries submitted. And we were very excited that a young family from Dreamworld heartland in Ipswich, Queensland were the winners of this truly life-changing prize. Turning to Slide 11, which shows a summary of our capital plan and progress to date. In November 2022, we announced a pipeline of major attractions, including: Kenny & Belinda’s Dreamland; the Ocean Parade extension; the Dreamworld Flyer; and Rivertown, which will incorporate an all-new Murrusippi Motors; and the Jungle Rush family coaster, Dreamworld's most significant attraction investment in its history. I think all stakeholders are well aware of the extremely difficult construction environment across the nation and, moreover, in Southeast Queensland. And to that end, I'm very pleased to report that our projects are progressing on or ahead of schedule with the kids' areas and the Dreamworld Flyer all on track to be delivered in time for Christmas. This is thanks to the assiduous efforts of both the Dreamworld team and our supply partners. And whilst all of this construction has created a challenging park environment, our guest review scores have remained high. And we expect that, that will continue to grow as these projects come to a conclusion. I can also advise that the Rivertown project has commenced site works with demolition and bulk earthworks currently underway. And at this stage, we are targeting an opening of this area of the park in late 2024. I do stress that we are very early in this program, and changes to this date may well be required. Turning to Slide 12 and an update on our landholdings at Coomera. In August 2023, we provided an update on the state of our land and the process that we're undertaking with the relevant authorities to prepare the site for the future. As a reminder, the property is currently encompassed by two planning zones, Open Space and a Major Tourism precinct. The Open Space zoning, as I outlined in August, is quite restrictive. And whilst less restrictive, the Major Tourism zone constrains us to development activities that are specifically theme park-related, for instance, new attractions, or associated infrastructure such as shops or food outlets. There are some opportunities for short-stay accommodation. And we are actively exploring initiatives which can be considered in the near future under the current zoning rules. Unfortunately, any higher-density accommodation is currently not feasible under the existing zoning. We have spent a lot of time working on a process to vary land uses to enable us to confidently contemplate alternative land uses that are not currently possible under the existing planning scheme. In September 2023, we launched a preliminary development application with the Gold Coast City Council in which we've applied for a broad range of uses to provide maximum flexibility and optionality over the entire site and for us to continue to achieve the highest and best use for our holding. These uses are intended to be segregated into conceptualized precincts. And they may include, but are not limited, to residential, commercial and mixed-use developments. In all cases, we will ensure that the actions surrounding these developments are not just opportunistic, but they are strategically complementary to our core business. And the way that we intend to crystallize value will come into sharper focus as we resolve our application and consider the uses that have been approved. With our site being so strategically located and the scale of the development on foot in the surrounding and the adjacent areas, we believe that there is material upside opportunity to the land value, depending on the outcome of the development application. And as outlined in the presentation, we anticipate a decision on this application to be resolved by mid-2024. In summary, on Slide 13, we remain optimistic about the future for this business. FY '23 was a milestone year with the Theme Parks & Attractions business returning to operating profit for the first time since 2016. We remain mindful of the economic headwinds ahead but also optimistic about our prospects as international visitation continues to improve. And historically, this has made up 20% of the Dreamworld attendance base. I'd like to reiterate our strategic pillars once again. The safety of our people, our animals and our guests will always be the #1 priority for this business. I'm very proud of the work the team has done over the last several years to bring new levels of sophistication and rigor to the safety systems across this company. We remain focused on business transformation and the need to be efficient in this inflationary environment. However, as I've said ad nauseam, safety investments will always override cost pressures. We have a strong culture across each of our business units. Our culture of high performance and our commitment to our guests is difficult to replicate in our view is a meaningful competitive advantage. And lastly, we see revenue generation as a fundamental driver of value over the coming years. We've communicated a very clear plan as to how we intend to optimize revenue with our focus on being brilliant at basics, our focused approach to sales and marketing, our work around ancillary opportunities, particularly pertaining to our land holding, but just as importantly, to grow our other businesses such as the night market business and our online retail businesses, amongst other opportunities. More critical is our detailed product master plan. Since our announcement last November, we have made solid progress and continue to execute well as evidenced in the work that we've completed so far this year despite the challenges in the construction sector. With the opening of Rivertown, along with the other investments we have made, we believe Dreamworld will be in its best shape in decades. Finally, I'd like to state my personal thanks to our entire team for their ongoing commitment and dedication. And I'll now hand back to Gary to conduct the formal business of the meeting.

Thank you, Greg. We will now move to the formal business of the meeting. The resolutions for consideration today may only be voted on by shareholders, proxy holders and shareholder company representatives. I propose to call a poll on each of the resolutions. As a reminder, shareholders attending via the online platform will have the opportunity to ask questions on each matter being put to the meeting. If you have questions already prepared, please go ahead and submit them now. The first item of ordinary business is to receive the annual financial report, the directors' report, the independent external auditor's report for the company for the financial year ended 27 June 2023. The remuneration report will be put to a vote for adoption separately. Are there any questions from both persons present in relation to the annual financial report, the directors' report or the independent external auditor's report?

Yes, Gary, there's a question in the room. We're just getting the microphone to the shareholder.

David Kingston from K Capital. Look, firstly, I'd like to say that in relation to the accounts, I do think the sale of Main Event was a solid outcome because the company nearly went bankrupt a year or 2 ago with the stock falling to $0.15 or so. However, I have serious concerns about the poor results from Dreamworld. The Theme Parks & Attractions in FY '23 delivered an EBIT loss of nearly $13 million. Adjusting for the profitable SkyPoint, which clearly is a profitable business, it means that Dreamworld and WhiteWater losses were very large. It is concerning because the nearby peer of village theme parks are trading very well and making a large profit. It is concerning that in the second half of FY '23, even including SkyPoint, the EBITDA was barely breakeven. But when you take into account the head office costs of $8 million, which, in my view, are grossly excessive, and the maintenance CapEx, not depreciation, maintenance CapEx, that's how you end up with a horrible EBIT loss. And this is all notwithstanding a huge amount of CapEx being incurred. So my first question to Gary or to Greg is when will Ardent Dreamworld end its very large losses? Noting also that Canaccord, the stockbroker, its recent research report showed a continuation of EBIT losses. Even in 2025, they are projecting an EBIT loss of $1.4 million.

Thank you. Well, David, as you know, I won't recite all the challenges that Dreamworld has encountered ever since the tragedy, which occurred in October 2016. There's a long list of reasons that you're well aware of that have materially impacted the recovery of this business. Put simply, this park has suffered from a very significant capital investment over an extended period of time. And then when you overlay all of that, let's say, significant impact of the pandemic, that has made the recovery of the Dreamworld business take longer and involve greater cost than had been originally anticipated. We have no doubt that the recovery of the park back to at least historical levels of earnings needs to be underpinned by appropriate capital investments. Greg has already highlighted the work that has been completed to date. We have a further number of important attractions that are going to come online. And we believe that those investments are critical to the recovery of Dreamworld, as I've said, back to historical or indeed potentially higher levels of return. Greg, do you want to add anything to that?

No, I think, Gary, you covered it all in detail. But probably the only other thing I would say is that with the investments that we have announced, and they were only announced at this time last year, none of those investments at this point in time have actually been implied to the market. And so we are very close to opening a number of these investments. In fact, we anticipate that, that will be online for Christmas this year. But there's no -- there's been no financial impact as a result of those as yet in terms of opportunity to market, they're more a driver for new revenue to date. And that will obviously be the next matter of focus for us over the next 6 weeks as we move into the busy Christmas season.

Chris, are there any other questions there?

Yes, I had a second question on the accounts, Gary. I'm just concerned about the CapEx. Originally, Gary, you projected in 2017, $25 million CapEx. It blew out to $60 million. It's now targeted at about $115 million. The market doesn't believe you're going to succeed because even though your assets are at a very low value in your balance sheet, as Greg pointed out, the book value of the Dreamworld assets and WhiteWater assets is at a big discount to cost because of impairments. Even when you said before, Gary, that SkyPoint is in the books at $11 million, whereas the JLL valuation was $30 million a few years ago, and having a look at it for the first time today, I can guarantee it is worth $30 million and it clearly is very profitable. So the market is basically saying with a market capitalization of $220 million, a big discount to your impaired book value, the market is basically saying they don't believe you can turn it around. So I've got a couple of questions on that. What is your ROI hurdle for the $115 million CapEx? Would shareholders be better off if you just sold the rides, stop the CapEx, sold the 55 hectares of valuable land and stopped in carrying this huge amount of CapEx? When do you forecast, heaven forbid, a dividend flow for Ardent shareholders? So I'd appreciate some guidance on those points, please.

Yes. So incorporating a number of the figures that you've got, you'll have operating and other losses that have been incurred over this period. The Board has committed to seeking the recovery of Dreamworld. And to achieve that, as I've indicated, it has clearly required significantly more CapEx than external assessment might have suggested 5 or 6 years ago. They clearly need that. And we have not compromised at all on the quality of the rides and attractions that we're investing in. The proof of the pudding ultimately will be in the eating. As I said, we have indicated quite clearly what our capital plans are. They're being implemented. We do believe that this investment will pave the way for a return back to at least historical level of earnings. And that is the Board's position. Greg, did you want to augment any of those comments?

I might just ask Jose to give just a very scenario view as to how we think about new capital investments. We're not going to be quoting the direct ROI hurdle. But I think it would be helpful for holders to at least understand how we think about those things. And maybe, Jose, if you can illustrate back on that.

Yes. So when we're looking at new investments, particularly significant investments of the nature that we're currently undertaking, we apply a rather holistic approach. It's not just about financials, it's about safety, it's about the attraction mix that we have, it's about what our competitor is putting in and being competitive within the marketplace. But specifically on the financial side of things, yes, we look at ROI, we look at IRR. We do discounted cash flow sort of analysis. We look at payback periods. And we look at all these different financial metrics. We don't disclose precisely what our hurdles are. But at the very least, they need to be sort of in excess of our cost of capital. Otherwise, it doesn't make sense to do that. So we do make sure that we cover that.

What's the cost of capital?

We don't disclose that.

Just one final one from me on the accounts. At year-end, you had $140 million cash approximately derived from the sale of Main Event. We understand that $4 million went to settling the class action. We understand that part is being allocated to the very substantial second stage of CapEx. And we understand also that notwithstanding continued references to improvement over prior years, the company continues to lose cash at a fast rate. In fact, it's alarming to hear you reiterate that ever since you became involved, Gary, the company hasn't delivered an EBITDA until the last year. And if you look at it on an EBIT basis, the company continues to deliver the EBIT losses over the last 6 or 7 years. So clearly, part of the cash is paying for the ongoing cash losses. But my question is, personally, I was very disappointed the Board was only prepared to offer back $22 million, a mere $22 million, to the long-suffering shareholders. To me, that's a very parsimonious allocation of money. You're ending up with a very lazy balance sheet with a huge amount of cash there, debt-free properties, a profitable business in SkyPoint. It's very lazy. And I was very disappointed. But can the Board please clarify why you're only allocating $22 million of the buyback?

So yes, thank you. We've made the point previously, I'll repeat it. The Board believes that as the capital program was implemented and with ongoing challenges in terms of construction costs, still limited international visitation, tough consumer discretionary environment that this is the time to still retain a prudent and well-capitalized balance sheet. You'll also be aware that we have foreshadowed that as the recovery hopefully takes place that affords us to facilitate the opportunity to reconsider and continually review the capital requirements for the business moving forward. And further capital initiatives will always be considered in that context. Are there any other questions, Chris?

There's one question from the room from another shareholder, Gary. We'll just get the microphone to him.

Yes. I don't think you answered the previous question as to when do you expect dividends to be paid in the future again.

Could you just state your name, so we can...

[ Greg Jones ] from [ Kalmar Ltd. ]

Well, at the moment, the prime focus is to execute on the capital construction program and to get this business back to generating positive returns to shareholders. At that time, clearly all matters relating to capital management will be reviewed. And indeed, that's an ongoing exercise that the Board undertakes. And Chris, was there a question?

There is another question in the room, Gary.

Charlie Kingston, K Capital. Just a question around the value of the excess land that was discussed in some of the remarks today. Again, for context, back in 2017, for the Chairman's campaign to become elected, he indicated that the excess land, very clearly, 25 hectares was worth $25 million at the time. Now 6 years later, there's been a failed development of a potential hotel plan that we don't really know why or what happened there. And again, there's lots of comments. Greg, you said a material potential uplift in valuation. But shareholders are still none the wiser as to what the value of the land is today. Now Greg, you also recently said in your earnings call for the most recent results that at least the share -- at least the land is not going down in value, which may be correct. But unfortunately, for shareholders, the value of our shares continues to go down. So we're getting penalized for our patience. Again, Greg, I don't think you own all that many shares. I think it's 65,000 shares. But you are paid a nice salary, $1 million base in USDi to watch that land appreciating value. But conversely again, shareholders, all we have access to is the value of our shares. And clearly, the market is not recognizing that value of the land, whether or not they may not believe the value is going up or they may not believe that they will ever get access to that value, which I think is fair, given it's been 6 years since the Chair indicated the $25 million. It would soon be sold and value would be crystallized for shareholders. So the question is given how specific the Chair was 6 years ago, he's had a lot of time to assess the value of that land. Again, there's lots of slides in there today about developments. But again, we've been told to wait until mid-'24 before any further detail would be provided. But I think shareholders, given all we have access to is the value of our shares that's going down, I think we deserve more clarity on what the Board -- Gary, what do you believe the land is worth today? Is it $25 million? Is it more? And more importantly, when will it be crystallized? And will shareholders be able to access that value?

Yes, sorry. Once again, I apologize I'm not there in person. And so it's a bit hard to actually hear that question clearly. Simply put, back on the date when we launched that campaign, we indicated that based on our own assessments, the potential surplus land may have been worth $25 million. That was purely our own assessment, not supported by any formal valuation at all. In terms of where we are with the land, Greg has already addressed that. We do have an application in with the Gold Coast City Council to essentially rezone the potential uses for the land identified and its surplus to the back of ongoing requirements. It is too early in the process to know the outcome of that. But we do believe that if we are able to achieve a successful outcome to the development application at large, that ought to provide some very good potential additional value to shareholders. But at this stage, the outcome is too uncertain to be able to provide any context for what the potential uplift in value may be. Are there any other questions, Chris?

Yes, just one further question.

Another question from Charlie Kingston, David -- sorry, Gary.

Just following up on the CapEx question. Just obviously, today, the Board -- we're sitting on a lot of excess cash, $140 million. Today, that presumably returns quite a nice figure, so 5%. We're sitting on cash, which is a nice return. And it's a bit disappointing you won't provide any sort of targets or what the cost of capital is for the company. But I think we do deserve more clarity in terms of when that CapEx, call it, $120 million, will actually generate a positive return. Because the alternative is, obviously, you could return more to shareholders. We could potentially earn that 5% risk-free on our money. But instead, all we've got is a share. Shares are going down in value. So again, I'd just like to ask the question, just for you to be more specific on the $120 million or thereabouts of CapEx that's getting spent. Is that going to earn 10%? If we accept that it's going to get us back to pre-tragedy levels of profitability, I think it was around about $30 million of EBIT. You take off the $8 million of CapEx, $8 million of corporate overhead, again there's not all that much left for shareholders. So is that a fair way of thinking about it? And if that's not, why not just do nothing, sit on the cash, earn 5% or return it to shareholders?

Yes. I think, Greg and Jose have already addressed the way we look at the investment of capital. As I said, the Board does believe that with the capital projects that have already been announced, many of which have already been complete. And with two significant new attractions, hopefully it would be online for Christmas. But this will portend the anticipated recovery in the performance of the business. Chris, any other questions?

I have one final one, Gary, to the auditor, please? Is the auditor in the room?

The auditor, Anthony Ewan...

Okay. Question for the auditor, please. Every year since 2017 until last year, there was an EBITDA loss. Even last year, a small EBITDA profit but an EBIT loss, so pretty consistent EBIT loss every year and a material one. Question to the auditor, having regard to the chronic ongoing losses, okay, there was a tragedy, but that was 7 years ago. COVID has well and truly dissipated. But is this business a going concern? Or is it structurally flawed? Can it be turned around? Is the $115 million CapEx a Melbourne Day punt on the future? But are you looking at qualifying the accounts, Mr. Auditor?

Sorry, can you repeat your name for me?

David Kingston, K Capital.

Certainly. So look, I'm -- under the conditions of an AGM and the Corporations Act, I'm happy to answer questions on the conduct of the auditor's report and the preparation of the financial statements. I will refer you to our auditor's report, which is an unqualified audit report and did not include any commentary in relation to going concerns, given we did not consider it to be a key audit matter. Given the capitalization of the company in its current form, I'm not in a position to speculate on future outcomes for the group.

Any other questions, Chris?

No, that's it, Gary. I'll ask you to move on.

Okay. So did you find if there's an online question?

No, there's no online questions regarding the reports.

All right, thank you. So we'll now move to resolution 1, the remuneration report. Resolution 1 in the notice of meeting is to adopt the remuneration report for the year ended 27 June 2023. Remuneration report is included in the annual report and has been made available to shareholders. Investors should note that the vote in relation to the adoption of the remuneration report is not binding on the company or the directors. The company will disregard any votes cast on resolution 1 that do not comply with the voting exclusion requirements of the Corporations Act as set out in the notice of meeting. I move that the remuneration report the year ended 27 June 2023 be received, considered and adopted. The proxy results received for this resolution, Chris, are hopefully on the screen.

Yes.

Are there any questions from those persons present in relation to the remuneration report?

Gary, there's a question from David Kingston. We're just getting the microphone to him, followed by a question online.

Greg Yong is obviously a key management personnel, along with...

Sorry, David, could you just hold the microphone a little away from your mouth because it gets a bit garbled it seems?

Okay, fine. Is that better, Gary?

Yes, thank you.

Greg Yong, the Chief Executive, is clearly a key management personnel, along with the -- all of the nonexecutive directors. So I have one question on Greg and another one on the directors, nonexecutive directors. Greg has a remuneration of $553,000 and was paid a $523,000 bonus last year. Given the company is continuing to incur large losses and the company going forward is merely a $200 million company, $1 million for the Chief Executive is a lot of money. We've got to look at that in the context of its lazy balance sheet, surplus property, discussing the property for 6 years but no action yet. But I have a question for Greg. Given the very unacceptable result for shareholders, Greg, would you support or actively participate in a sale to another party of the assets of the company at a premium? Noting also, Greg, that there is a current large-scale merger in theme parks, an $8 billion merger with Cedar Fair. So there's plenty of appetite from corporates who would be interested in paying a premium for this asset. Would you support that, Greg?

David, perhaps you could take the first aspect, I'll take the second.

So David, the first aspect is Greg is paid $1 million, which is a lot of money, given the size of the asset. The Board's view as to that is that the remuneration is an appropriate amount considering market rates for executives of Greg's caliber. And the Board is delighted with Greg's performance and think the remuneration package is appropriate in all respects.

As for the second aspect, I think the Board's record of disposal of assets speaks for itself. Our job here has been to correct the performance of businesses in this group. And with Main Event being obviously a standout and acknowledge, David, your previous comments, and we saw a doubling of EBITDA of that business over 4 years. And as I say, an EBITDA multiple of 8.5x record EBITDA against the current market for Dave & Buster's is probably at around 5x EBITDA. In terms of the overseas activity, yes, we're well aware. And this Board is very focused on delivery of outcome to shareholders. Any other questions, Chris?

Thanks, Gary. The second part relates to the nonexecutive directors are also key management personnel, calling the remuneration report. I was shocked to see that the total fees to the nonexecutive directors are $860,000, ranging from $140,000 at the lower end to $240,000 for the Chairman. well, that's fine, absolutely fine for last year, when the company was much larger. But I was shocked to see when the shareholders are incurring such pain. Poor share price performance, no dividends, share price declining, I was shocked to see that the Board has not agreed voluntarily to reduce its remuneration. David Haslingden, you're an experienced guy. I'm surprised as Chairman of the Rem Committee that you haven't asked the directors to take a reduction. Because the responsibility and the workload is clearly dramatically lower than it used to be. So my question really is to David Haslingden, experienced director, Chairman of the Rem Committee. Why haven't you sought to reduce the very large fees relative to a $200 million company being charged by the independent directors, particularly when the three U.S. directors don't even bother to come out here? So it's a question to David.

Look, thanks for the question. We completely agree with you. I mean, the profile of the company has changed dramatically with the sale of Main Event and the responsibilities for the Board and the workload for the Board has decreased. So I did exactly as you suggested I should with the encouragement of the Chairman. And we asked all directors to take a voluntary 50% reduction in their fees. And they did as disclosed in the -- in our annual report. So I think, for example, my fees went from $120,000 to -- or $140,000 to $70,000.

Okay, that's good. Thank you.

You're welcome.

There's another question in the room. Could we have a microphone to the front row, please? Charlie Kingston?

Charlie Kingston, K Capital. The two international directors, can they hear me? Are they on the line, yes?

Absolutely.

Just a follow-up, while we're discussing sort of remuneration report and the international directors, which we do have on the Board, I was just hoping to ask for their perspectives, given they are internationally based. So presumably, there's a lot of international expertise that they can apply to Ardent to help us improve the outcome. But I note, Randy, you worked at Walt Disney. They're clearly -- that's the jewel in the crown of the international theme parks. That makes most of the company's money. But I was looking at the other two peers, international peers, and they all generate significant free cash flow on their metrics. And that's despite most of them not owning their lands. They're all heavily indebted compared to Ardent, which owns a lot of land. We have a lot of cash on the balance sheet, yet we are losing money. So I was just hoping to understand, given all that international experience, what are the learnings that you can apply and actually use to help Ardent finally turn around and actually mimic some of their global peers?

Charlie, I might -- Randy, just before you respond, can I just make a couple of comments and pick up a comment from David Kingston? We do have three outstanding international directors on this Board. They do come out. But we are very conscious for reasons already canvassed about incurring costs in this business. And the next scheduled visit for our international directors will be around the time of the half year results, at which time a lot of the construction work for projects outside Rivertown will have been completed and delivered. And we thought that was an appropriate time for them to come out. In terms of the three directors, I just observed, before Randy responds, that Randy was actually appointed by the previous Board of Directors and, of course, comes with a very distinguished record at both Disney and Universal. Similarly, you'll note Erin Wallace's particular qualifications, which include some 30-year career -- a 30-year career at The Walt Disney Company. And we are very fortunate, together with our colleague, Brad Richmond, to have an outstanding Board with very, very deep and extensive knowledge of not only the theme park industry but also consumer-facing industries such as we have, for example, in Main Event. So Randy, if you could best respond.

Yes. While the pandemic has kept us away from expensive international travel, prior to the pandemic in 2020, we were making trips to Queensland to visit Dreamworld and spend time with Greg or his predecessors' team on an ongoing basis. And I would tell you that even today, in addition to the approximately 20 Board and committee meetings that we all participate in, Erin and I as well as Brad frequently are engaged in conference calls or video conferences with Greg and his team to provide insights and experience on marketing, operations and other operational requirements. It's a very different environment [indiscernible] from us. And Dreamworld is clearly a hometown [indiscernible] and is really touching above its weight class. But to try to compare them to companies like Disney that has been in that business since 1955 and more of [indiscernible] division is a very [indiscernible] comparison. So I would tell you that the three of us who are U.S.-based spend a lot of time working with our Australian colleagues and are available on call anytime they need them.

Gary?

Okay, thanks. Anything else?

Anything from Erin? Any comments?

Yes, can you hear me?

Yes.

Okay. I'm happy to comment that I believe the strategy that Greg and his team have undertaken is a strong one. The capital investment that is being put into place creates, I think, a strong impetus for guests to come and to visit. I think it will also help to produce some really great resident support and the annual path support, especially among the competition set. So we're looking forward to seeing that play out. I think the assets of Ardent at Dreamworld and WhiteWater World are great. And of course, you've seen the great asset performance of SkyPoint. We need international visitation to recover. And we need some of the economic pressure on Australia to ease so that we get even more resident visitation. But I think all the underpinnings that are being put into place and the investment that is taking place as well as long as we keep, I think, what is a very strong management team, I think we have all aspects to deliver.

Okay. But there's no obvious structural differences between the Australian theme parks and then it's not just Disney, it's Cedar Fair, it's Six Flags, they all generate significant positive EBITDA. Despite having far inferior balance sheets, we lose money. So in your view, there's no obvious issues or structural differences?

Let me just say, as historically, Dreamworld, WhiteWater World and SkyPoint did as well. And we've already outlined the steps that we believe are necessary to recover and to restore us to at least those levels of earnings. That's the task of this Board and one which is well underway. Chris, are there any other questions?

There's two online questions, Gary, regarding the remuneration report. I'll start with the first one. And it might be more appropriate that David Haslingden as the Chair of the Remuneration Committee respond to it. But I'll read it. For the sale of Main Event, Ardent paid USD 32 million in short-term bonuses to former employees. Does Greg Yong's employment contract or his STI or his LTI have a similar incentive structure to sell the Dreamworld asset, which would stop the cash losses, stop the massive CapEx spend and provide cash to return to shareholders? If not, why not?

I'll take that question. Thank you, Malcolm, for the question. The answer is that the structure of the Main Event LTI, which was designed to focus the management on the disposal of that asset, hasn't been replicated with the Dreamworld LTI, which is much more in line with standard Australian ASX-listed company LTI programs, where the bonus is linked to total shareholder return. When we set the LTI program or the STI program, we do it with a view to motivating our management team to achieve the outcomes, the strategic outcomes that we want. And we had decided that Ardent as an Australian -- small Australian-listed public company wasn't an appropriate long-term holder for Main Event. And the appropriate thing to do with Main Event was to sell it. Hence, we designed a remuneration structure and an LTI structure that incentivized management to build the financial performance of that business to a point where it could be sold well. And I think you'll all agree, it was sold well. And that was a good outcome for all shareholders. As Gary has discussed today and Greg has discussed, we do not have a near-term objective of selling Dreamworld. Some shareholders may disagree as to whether we should, but the Board unanimously does not. And as a result, we have an LTI structure that motivates management to focus on long-term shareholder returns and the financial performance of the business.

Gary, I might read the second question regarding the remuneration report. It comes from Stephen Mayne. Are any proxy advisers covering us? The proxies are strongly in favor of this item, suggesting they don't have a concern. Are they also strongly in favor of the other items?

So we're not -- my understanding, Chris, and you'll correct me if I'm wrong, is that due to our current size, we have -- do not have interaction with the principal proxy adviser houses. But some of them do cover us. And I believe one of them supported all resolutions today, another one supported all but one. Is that correct, Chris?

That's correct, Gary.

Thank you. And is there another question, Chris?

Not on the remuneration report. We can move to the next resolution.

Okay. All right. So David, I think you'll tackle this one.

Thank you, Gary. Resolution 2 in the notice of meeting is to reelect Dr. Gary Weiss AM as a director of the company. Details in relation to Gary's background, experience and qualifications have been provided in the notice of meeting. I move that Dr. Gary Weiss AM, who retires by rotation in accordance with Clause 6.1 Paragraph f of the company's constitution and being eligible for reelection, be reelected as a director. The proxy results for this resolution is shown on the screen. Are there any questions from those persons present in relation to this resolution?

There's a question coming from David Kingston. We'll just get the microphone to David.

Look, the real elephant in the room and the real problem with this company at the moment in terms of its financial performance is pretty simple. It comes down to one thing, visitation. It's a high fixed cost business. Whether you've got 2 people there or 10,000 people there, it costs the same amount to feed and look after the targets. So the problem is visitation, very clear. Gary, before your 2017 campaign, visitation was 2.4 million people to Dreamworld and WhiteWater World. In your document associated with your 2017 campaign, you specifically cited that you were seeking to restore the 2.4 million visitors. But 7 years later -- 6, 7 years later, you're only half that at 1.2 million visitors. Now that's the real problem. Now you're increasing yield, you're doing a number of things okay. But the problem is you're not getting enough people there. So my question to Gary, who's up for reelection, and as Chairman has been Chairman for 6 years, given the fixed cost, Gary, given the company is still continuing to lose money, which is a chronic problem, the cash deposit is continuing to go down because of the losses, when do you expect to return to the 2.4 million visitation that you said that you were seeking to achieve when you submitted to the market a detailed list of objectives that you had when you sought to become Chairman? And you were successful in becoming Chairman in 2017. So when do you think you're going to get back to the 2.4 million, please?

Very difficult to make predictions about the future, David. Let me just say this, when we looked at Ardent and looked at the historical performance of other theme parks around the world where tragedy has occurred, the anecdotal data suggested that there would be almost always a reversion back to pre-tragedy attendances over a 2.5- to 3-year period. Unfortunately, Dreamworld has been the exception to the rule. I'm not going to list all the issues that have bedeviled that recovery, whether it's, as I said earlier, the massive underinvestment in capital at Dreamworld, all the attendance publicity and complications surrounding the [indiscernible] inquiry, the prosecution, the numerous other legal themes surrounding Dreamworld. And I think you would be well aware of the significant negativity surrounding Dreamworld and everything that's related to the tragedy and the conduct of the aftermath. And then you put everything on top of that was a 1:100 years pandemic, which caused the park to close and put all forms of capital investment on hold, pending, hopefully, the return, the viability in due course of Dreamworld at the end of the pandemic. All those reasons have been major factors. And the fact that we haven't got back to historical levels of attraction -- of attendance, I should say. But the fundamentals for this business are no different to many other consumer-facing or businesses such as retail. You need compelling product to get the customers to come. And I won't go through it now, but the number of rides that we inherited, whose use-by date was rapidly approaching or has already been achieved, some of the signature rides at Dreamworld, the Log Ride, the Tower of Terror, all these rides that were the signature rides of Dreamworld all had to be closed. It takes time to recover. It takes time to get new high-quality attractions. And as I keep repeating, we are well on the way in terms of our new rides and attraction rollout. And the Board is confident that we will return to historical levels of earnings, if not better. The one thing though that we do focus on is the per cap of attendance. So as you've pointed out, we have been very successful in driving the per caps for attendances. So attendance numbers per se of their own are not only important factor, but they are obviously materially important. The other factor, too, which we keep coming back to is the lack of international visitation. We are nowhere near historical levels of international visitation, although we hope that, that will start to open up, particularly with hopefully China coming onstream in the course of this month or next month. So you're perfectly right. The outcome of this exercise very much does depend on driving further visitation to the park. Our view is as it is in retail, you need compelling products to persuade people to come. I think we're taking some very good steps in that regard. And we're all excitedly awaiting the -- not only the new rides which will be open in time for Christmas, but more particularly our Rivertown precinct, which we think will be the most outstanding theme park precinct in the country when opened.

Thanks for the answer, and thanks for being frank about the international research, which is consistent with my understanding that it takes 2.5 to 3 years to recover from a tragedy. So I don't think that's a factor. I don't think COVID is a factor. Because most entertainment leisure tourism businesses have been shooting the lights out in 2022. I do accept, Gary, that there was underinvestment in the park, I do accept that. And hindsight is a marvelous thing. Yes, your $25 million forecast for CapEx is blown out 4 or 5x. But I accept that the $25 million was way under the odds. I don't really accept international. Greg Yong has said that it's low-yield stuff. It only ever reached 18% to 20% of your total revenue. Most tourism businesses, I run one myself in the inbound, is back to pretty high level of what it was at. So I don't know whether Greg Yong is not running the sales and marketing correctly in getting a poor amount of international. But Greg himself has said it's low yield. So it seems like he's not focusing on it. But at the end of the day, it's a revenue game. You're still well below your 2017 -- '16 revenue. And unless that revenue gets up, you're going to keep making losses. Greg, do you have any comment on international?

Yes, we're well aware of the point. The -- and yes, hindsight is a wonderful thing. Foresight would be even better. All I can tell you is, as I keep repeating, investment in new rides, new attractions, new product is required to get attendances back to more historical levels of attendance that we saw, particularly through the healthy end period of FY '12 to FY '16.

Look, I'm happy to add some extra color to the international question, David. I've continuously stated very clearly about international attendance as it comes on is dilutionary to overarching yield. That's just a fact. I've been in this industry for 20 years, and at Village Roadshow, when I was there for a long time as well as at Ardent prior to COVID, international ticketing, for a host of reasons, partially because of the type of product that they look to engage when they are in market. And moreover, because most of that business comes from resellers, where there is an element of commissions involved, does mean that the international visitation that comes on is dilutionary to overall yield. We absolutely accept that international attendance is critical to what we want to do here. We are absolutely focused on driving and bringing more international visitation back into the business as it comes on. But I think we can't avoid the fact that as international visitation comes on, it is dilutionary to yield. I would love to get it to the same levels as what we see from the domestic market. But I think that's just unreasonable. And when I talk to other peers in the industry, they all have a very similar view to me.

I had one second question, if I may. Look, Gary, you're obviously a very bright guy. You can multitask. You juggle a lot of balls, running from the NRL to charitable boards to sitting on the Board of Thorney, which is they've got one of the most usurious management fees I've ever seen. But that's -- [indiscernible], you run two...

David, can you hold the microphone a little less close to your mouth. You're getting garbled.

Okay. Is that better?

Yes.

So we admire your ability to juggle a lot of things, Gary. But you are on a lot of Boards. You just left the Board of Estia. You've conversely gone on the Board of Myer. It's interesting you run two campaigns to become Chair: the one for Ardent, which hasn't worked out well for the shareholders; another one is Cromwell, which obviously hasn't worked out well either. But Gary, you've been Chair for 6 years. It continues to lose money. It continues to trade way behind the nearby peer of Village. Just a question for you, Gary, is it time for you to step down and give someone else a go?

Yes, thanks, David. Yes, I do get involved in a number of things. And you're a little ahead of your -- a little ahead of time. I'm still Chair of Estia. That deal hasn't concluded. And I'm still not on the Board of Myer. But in terms of Ardent, and this also has applications to Cromwell, recognizing that this is an Ardent meeting and not Cromwell, it often takes a lot longer than appreciated to deal with issues of the past. And that has been, as I keep reminding everyone, the enormous challenge that we've had with Dreamworld, coupled with all the external events which have made the recovery exceedingly difficult. I don't think any external investor would have appreciated the level of underinvestment that have taken place at Dreamworld. And that needed to be addressed particularly in light of the tragedy to restore performance. So we haven't shied away from dealing with the task in front of us. These are the cards that have been dealt. And as with all the companies that I'm involved in, we pursue trying to rectify the situation from a position of investing at all times with the equality and not cutting corners, not looking for short-term sugar hits to properly restore the fortunes and the businesses of the companies which I'm involved. And Ardent is no exception to that. As I keep repeating, the Board is confident that with the capital investments that have taken place and those that are underway that we will be well positioned to return to the historical -- at least the historical levels of earnings. Any other questions, Chris?

There's some questions online, Gary.

Were there two more questions on the floor?

Sorry, I was just looking up. There were two more questions on the floor, I'm just told.

Noel Ambler from the Australian Shareholders' Association, Gary. You're a very busy bloke. And while your directorship still exceed the ASA guidelines, can you just please reiterate why you're able to handle the number of directorships you hold?

Well, Noel, thank you. Good to hear from you again. The short answer is that I do -- I don't assume obligations at companies that I am unable to fulfill. I'm a very active director at the companies at which I serve. And particularly in relation to Ardent, this being the Ardent AGM, I'm very, very actively involved, together with Greg and his team. I would be in touch with Greg at least once or twice a day. I receive attendance numbers twice a day, when the parks are open and get figures for SkyPoint. I'm up at the park frequently and involved frequently with Ardent's affairs. And I do believe I more than discharge the obligations that are incumbent upon me as the Director of Ardent.

And if I can just make a comment as Chair of the Rem Committee, there has been absolutely no complaint, in fact, to the contrary, compliments from the Board and from senior management about the availability of Gary anytime he's needed and about his leadership at the company. So in terms of the feedback from the company and my fellow directors and my own belief, there is no issue whatsoever with the fact that Gary has commitments other than Ardent.

Final question in the room on this, Gary.

Charlie Kingston. Just a question for Gary, obviously, one of the hats you wear is an investor with your Executive Director of Ariadne. But it's just a simple question, given wearing that investor hat, how long would you tolerate an underperforming Board for? Historically, you've obviously been very active in space and changing Boards. You did that with Ardent. Clearly, that's how you became the Chairman. But just wearing that investment hat, clearly Ardent, since you became the Chair, has been a poor performer. So wearing the Ariadne hat, how long do you tolerate poor performance? Is 6 years enough before you seek significant changes to investee companies and their Board? The strategy, again it's spend a bit of CapEx, return of visitation. We spend a lot more CapEx, we still haven't seen the results. So just a question on wearing your investor hat, how long before you actually demand significant change? And I think one of the companies that -- Merlin, they had an accident, just referring to your comments about the 3-year turnaround. They were taken over, so a real strategic change in the ownership of that company. But again, just 6 years is a very long time. So wearing your investor hat, how long would you generally tolerate poorly performing companies before you think there is a required change to strategy and the Board?

Gary, look, of course, you can answer the question. But just let me make a comment. Firstly, Gary is not sitting here in his capacity as an investor in the company. He's been reelected as a Board member. And secondly, I think in the answers to the questions that Gary has given and management have given, we don't agree with the underlying proposition that the company has been poorly managed or in the circumstances has performed poorly. So Gary, if you'd like to answer, go ahead.

Sure. The short answer is that I'm a patient investor, provided I can be persuaded that management are applying a long-term approach underpinned by credibility to deliver value over the longer term. I have no doubt that this is the case in the case of Ardent. My one regret in terms of Ardent is that we faced challenges that no one could have ever foreseen when we undertook this exercise. I repeat the words that I used at the earnings briefing, everyone has got a plan until they're smacked in the mouth. And whatever the challenges that were inherent with Ardent when we got involved, they've been significantly compounded by pandemic, perennial inquiries, class actions, you name it. This company has not had clear air ever since October 2016. Any other questions, Chris?

Gary, there's three questions online.

And look, Chris, a couple of them, I think I can summarize very briefly and answer very briefly. One question has asked, after repeating a number of the statements or sentiments expressed today, will Gary resign as a director? Clearly, the answer is no. He is standing for reelection. He wouldn't be standing for reelection if he was going to resign. And the second is will Gary make a -- will we confirm that this is his last term as director? And I would suggest he will not. And it's not an appropriate thing to be asking him at this time. Are there any other questions?

No, the final question from Stephen Mayne asked if Gary would lighten the workload. I think that's been covered in full, so we could move on, David.

Yes. So on that basis, Gary, I'll turn back to you for the next resolution.

Okay, thank you. Next item on the agenda is the reelection of Randy Garfield. Details in relation to Randy's background, experience and qualifications have been provided in the notice of meeting. I move that Randy Garfield, who retires by rotation in accordance with Clause 6.1(f) of the company's constitution and being eligible for reelection, be reelected as a director. The proxy results for this resolution are on the screen. Are there any questions from those persons present in relation to this resolution? Chris, any questions?

There's a question in the room from David Kingston.

Randy, I presume it's fairly late wherever you are.

It is.

Firstly, Randy, when was the last time you've actually visited Dreamworld?

Right before the closure of international routes in 2019.

So 4 years ago.

Well, the market was closed, if you recall, in 2021 and '22 and just recently started to open, which is one of the challenges with international routes.

Okay. Well, I think I've been overseas three times in the last 6 months, so the market is well and truly open. Okay, you haven't been over for 4 years. Do you think three U.S. directors are needed? The three directors have all got good skill, there's no doubt about that. But to have three U.S. directors was perfectly rational when the company owned Main Events, no problem. But surely, it's overkill with a small loss-making theme park down here in the Gold Coast to have three U.S. directors. Is that excessive, Randy?

No, the question of the composition of the Board is a matter for the directors. So just put questions to Randy in a personal capacity, David.

I just thought, Gary, he might have a view on that. But if you don't want to take the question, fine. Let me ask you a question, Randy. Certainly expressed today, the opinion that the performance of Dreamworld is poor, continuing to lose money, a lot of money every day it trades. You know, Randy, that in the U.S., almost all theme parks, none that I'm aware of have owned a freehold property, have nothing leased, have surplus property and have a side asset called SkyPoint that's spinning off quite a lot of cash. So Randy, Ardent and Dreamworld are in an incredibly luxurious position of having a brilliant balance sheet and yet -- which, to be frank, the U.S. operators wouldn't tolerate. They like to sell off the freehold property and return capital to shareholders. But why are you tolerating that, Randy? Because it's contrary to U.S. practice. But secondly, Randy, I'd...

I don't think it's appropriate to look at U.S. practices as having adapted worldwide. I think that each market has its unique characteristics. And the approach that's being taken in Australia is the appropriate one for that market.

Well, the main competitor here that's trading brilliantly doesn't own its freeholds and is much more financially geared. But it's delivering a very strong cash flow. So I don't agree with you that the Australian market supports having a lazy balance sheet. But if I can ask you a question, Randy, in the context where Disney...

Yes, I'd put everything in context. The last thing Village has is a lazy balance sheet, David. And I think you're well aware of the circumstances there as you're involved there. So you've got another question for Randy? Otherwise, we're going to move on.

I do, Gary. The -- in America, theme parks are pretty popular. Like Disney are happy to potentially let go of ESPN. They're certainly happy to let go their free-to-air television. But they regard theme parks as key. We've talked about Cedar today with its big $8 billion merger. So in America, theme parks are very sought-after assets. And there's no other theme park in the world that I'm aware of that has no debt, surplus cash, freehold property that's losing money. But would you care to comment on that, Randy? Are you happy with the current situation? Are you agitated? Are you...

I think we're working very hard to get past an incident that happened years ago that continues to challenge some consumers. And I think we're taking the right steps to not only recover but to grow and enhance our brand.

Okay. Any other questions, Chris?

No, Gary. Sorry, my mistake, there is a lady in the room.

That's all right. This is [indiscernible]. Look, I don't want to sound repeated to you because there's been a lot said. I totally agree what Mr. Kingston has bought forward to the Board. And I sincerely hope that if this director stay in the job that take at least some consideration on what has been said here.

Thank you. And believe me, we do take onboard the views of our owners. Any other questions, Chris?

No, Gary.

Okay. No online questions?

There was an online question that was related. It was [indiscernible] and related to your appointment, so no.

Okay. So resolution 4, we'll turn to now in the notice of meeting is to change the company name. Details in relation to the change of company name have been provided the notice of meeting. Shareholders will recall that following the disposal of the group's health club business in 2016, the company sought shareholders' approval to change the company name to Main Entertainment Group Limited to better reflect its focus on that U.S.-based business at the time. Shareholders voted unanimously in favor of the name change at the 2016 AGM. However, due to circumstances existing at that time and following, the company chose not to implement the name change. Since late 2016, the group has disposed of its Australian bowling and entertainment and marinas businesses, undertaking a destapling and corporate restructure and last year, disposed of the U.S. Main Event Entertainment business. With the group's focus now firmly on its Australian Theme Parks & Attractions businesses, the Board and management believe that it is timely to now implement the name change at the holding company level to reflect our current focus. I now move that in accordance with Section 157 of the Corporations Act 2001, the name of the company be changed from Ardent Leisure Group Limited to Coast Entertainment Holdings Limited and amend the constitution accordingly to reflect the name change in accordance with Section 136(2) of the Corporations Act. Proxy results of the resolution are on the screen. Are there any questions from those persons present in relation to this resolution?

Yes, there's a question in the room from David Kingston.

Just to comment, Gary, you'll be pleased to know I 100% support this. Let's bury the name Ardent. It's been a pretty sordid history. So let's kill Ardent and long live the new company.

Thank you, David. And I totally endorse what you had to say. We determined, particularly with the closure of the class action, that we would consign the Ardent Leisure name to the dustbin of history. The new name embraces obviously our key position as an important and significant member and contributor to the Gold Coast and the economy. Are there any other questions, Chris?

There's an online question, Gary. I'll read it. Name changes are meaningless without a change of business. Why are you wasting time and money doing this at a time when you and management should be 100% focused on making cash profits and restoring value?

I think we've already addressed that. The Ardent Leisure name conjures up a very negative history for this company. And we are moving forward. And as I just said, the Board believes that it's in the best interest of shareholders to consign the Ardent Leisure Limited name to the dustbin of history. Are there any other questions, Chris?

No.

Okay, thank you. So before closing the meeting, I'll take any questions of a general nature which have not been specifically addressed as part of the preceding items of business or the business update. Are there any questions in the room, Chris?

Yes, there's a number of people.

Just want to go back to the question that was raised about the need for three overseas U.S.-based directors and whether you still see that going into the future. I don't think it was addressed.

Yes, okay. So the current view of the Board is that we are delighted with the current composition of the Board. As you will note from the annual report, we have a Board that has extensive and relevant experience for the businesses that we're now in. And for the foreseeable future, it will be the intention to continue to retain and to utilize fully the huge experience that our overseas directors bring us. Any other questions, Chris?

Yes, just pass the microphone around the room.

Sorry, my name is [ John Postlethwaite ], first-time meeting here. But look, I come from a commercial background. And I haven't heard anything today -- and I apologize for being a little late here today, but that's -- we won't go into that. But if you already said something, I apologize. But I have not heard anything about how we actually are going to fix problem. But to me, if you've got something to sell, we should be out there with plans on how we're going to sell it, how we're going to do things, what are going to make a difference, what do the people want. It's a commercial situation that I haven't heard anyone speak of. And maybe this is the wrong forum. But that's what I'd be looking to do. I mean, we've got to get people through the door. What do they want? Do they want excitement? Do they want something they'll remember forever? How do we advertise it? Where do we advertise it? Is anyone taking ownership of these things?

The short answer is yes. We have undoubtedly, and the Board's view, the best theme park team in the country operating at Dreamworld, WhiteWater World and at SkyPoint. Greg, would you like to respond to that?

Yes, absolutely. Look, I understand where you're coming from. And I think as we've discussed today, one of the fundamental challenges that we need to resolve here is around growing attendance in a sustainable way. And that's not just through significant price reductions and things of that nature but to grow yield and attendance together. I think if we kind of -- yes, exactly, if we contemplate about, well, how would we do that, I think we've been very clear around how we intend to do that. The first part of our strategy is around being brilliant at basics. And that's making sure that when people come to our parks, they have a good experience. I would say that our experience is very good compared to our competitors. But I would suggest to you that if you look at external research and if you look at third-party independent research, that the customer scores that we're getting are far in excess of what our competitors are doing. There are also then short- and more medium- to long-term initiatives that will grow attendance over time. The first one of those is very much around our event program. I've outlined today, I think you might have been just a touch after I discussed that. But our short- to medium-term initiatives around growing our event program, something that I have experience with at other operators. Things like the Street Food Festival, Happy Halloween, Winterfest, Spring County Fair are all things that are fairly capital-light initiatives. And that can be turned on very quickly that then grow visitation for two reasons. The first reason is inducing new visitors to come to the properties. And the second reason is that it creates valued perennial pass holders to want to come on to our program or to renew. But there is absolutely no doubt that the fundamental reason that people come to theme parks internationally, as we've talked about today, as well as domestically is around the quality of the attractions that we have. We can talk about everything else. But at the end of the day, the reason that people visit is fundamentally around the collection of attractions that we have. And to that end, the Board and management have been laser-focused on putting up a strategy together, which brings compelling product to the market to do two things. One is to attract visitation back into the properties. And I think relevantly is to address the underinvestment that had happened at Ardent right up to 2016. And I think that's evidenced by the Board and management's decisions to take out a number of attractions since 2019 that just didn't fit the risk appetite of the organization. We had no comfort in closing attractions like the Tower of Terror, like the Wipeout, like the Log Ride, like Wiggles Big Red Car attraction and several others. But I think if we think about this business in a sustainable manner, for us to operate attractions that hold risk and again are outside our realm of risk appetite is not a good long-term position for holders overall. And I think clear evidence of that is the tragedy that happened back in 2016. So I think your point is absolutely well made. We need to grow attendance and revenues. I think we've got a very clear intention as to how we're going to do that. I think we've been very upfront as to how we intend to do that. And I think we've been very upfront about the timing in that regard. As to your question around, "Well, how are you going to sell and market that?" Obviously, we are taking all of the usual steps that you would expect in terms of contemporary sales and marketing techniques. We work with external agencies. We're very focused on their advice. We don't just take it willingly, but we do very much contemplate their advice. And to that end, we are looking very much at social channels, digital channels. We still do some more traditional media. But we are seeing a very significant convergence towards new channels as well. I hope that helps answer your question, sir.

Yes. Can I just take the mic? Just thinking about we've all traveled [indiscernible] I've been in Singapore a few times. Every time you go to Singapore, you can't hardly move without hearing about their particular theme parks there. Everywhere you go, in the airport to the hotels, everywhere. I mean, you just can't miss it. Now I think maybe a trip to there, where someone might get some more ideas for us to how we can push our particular items here forward in what people may or may not like. But as you said, a bit more research might be involved. But yes, we need to point out what they expect when they come to Australia in the theme parks.

Any other questions, Chris?

Yes. There's another question in the room from David Kingston.

Look, we've heard from people today, appreciate your answers. Can I -- I'd just like to hear from the two U.S. directors, who are not up for reelection, their thoughts on the following. At the moment, the market is very skeptical about whether the Ardent Board is on the right track or on the wrong track. The market trades every day and is currently valuing the company at $220 million. If you're simply using round numbers, deduct the $140 million cash at the end of the year, deduct $30 million for SkyPoint, that's the JLL valuation, which I believe is a legitimate valuation. But you're going to have a new one done soon. And let's deduct $25 million, which is the value for surplus land that Gary ascribed to it 6 years ago. And clearly, you would think it's gone up then. Most property in this growth area has gone up. So -- but let's be conservative, let's take $25 million. What the market is saying to the Board of Ardent, or cursed the new name, the market is saying that they don't think you've got credibility to turn this thing around. They think you are taking a huge gamble with all this CapEx. Because if you take those figures, $220 million minus $140 million, minus $30 million, minus $25 million, you end up with derisory low $25 million, which is what the market is saying. They believe under your guidance, the five directors, you are going to create the Dreamworld. So I'd just like to hear from the two U.S. directors who are not up for reelection, both of them who have excellent experience. Is this just a wild punt like the Melbourne Cup yesterday, where picking a winner was pretty hard? Or are you extremely confident that you are going to deliver shareholder value with the huge $115 million total being spent on CapEx.

I'll leave it to Brad and Erin, who actually have spoken already, but if they wanted to make any comment. Brad, why don't we just hear from you? We've heard from Erin previously.

Yes. Thank you, Gary. And I understand where your question is coming from. But I think there's a good amount of math that just doesn't make sense in there. Because when you look at the lead times for the investments that are made in this business, as we described where it was, it takes time to get all that done. And so as a Board member, I'm very comfortable, very confident that we are making the right decisions that will create meaningful shareholder value over time. It's not going to be as immediate as maybe you're wanting it to be. But do I think the organization is on the right path, the right direction with the right leadership? I'm very comfortable with where we are today.

Right. Thank you, Brad. Chris, any other questions?

Yes, there's a gentleman in the room about to ask one.

Noel Ambler again, Gary. You're probably aware this question is going to come. What's the Board approach to political donations and causes? That's the first question. The second question is with all the challenges you have had over the past few years, so what keeps you awake at night now regarding Ardent?

The short answer to your first question, Noel, was no, we don't. We don't make political contributions. What keeps me awake at night is just simply continuing to execute on what we're doing. As Brad highlighted, I think we'd all love to see all our rides and attractions that we have in the pipeline already up and running. It's impossible to do that with lead times that we've had, the construction challenges. And while people are readily dismissing pandemic and its consequences, they do still linger in terms of impact, so -- but what doesn't keep me awake at night is the quality and competency of the team that we have assembled at Main Event and the caliber of the Board of whom I'm privileged to chair. We have outstanding people. It's been my experience over the years that success and investment coming from backing the right people with the right value set to apply themselves diligently and with considerable integrity and skill to delivering the end results. And I'm very, very proud of the culture and the team that we have assembled at our assets. And I do repeat that the Board is confident that we will return to historical levels of performance along the lines of those which this group saw in FY '12 to FY '16. Any other questions?

There's another question from Charlie Kingston.

Charlie Kingston. Just a final request for myself, just hoping for a commitment from the Board. Just again, there's a lot of commentary today around how it takes time. Yes, we obviously understand that the company has been through a lot. But if the target genuinely is to return to pre-tragedy levels of profitability, which you mentioned today that, that is the target, can we at least get some sort of commitment that within 1 year when a lot of that CapEx is going to be spent, if the share price continues to languish at the current levels or if you can't demonstrate genuine profitability, not positive EBITDA, which I don't think is a fair measure for a capital-intensive company like this? But just looking for a commitment that within 1 year, within 2 years, if shareholders continue to suffer and you haven't delivered that positive turnaround, can you commit today within a year to seek drastic changes, change of Board members, change of management, put the company assets up for sale? Just hoping for some sort of a commitment -- a firm commitment. Because shareholders have been very patient, so I'd just appreciate something of the sorts from the Board, please.

Yes, I'm not -- Charlie, I don't intend to provide time frames for anything. In this environment, it is -- it would be entirely foolhardy to make any prediction or projections. As I said, the Board is confident that we will get there. If we don't, then I think obviously we'll need to review everything and find a way that hasn't been achieved. Hopefully, that won't be a course that we'll need to embark upon. Chris, are there any other questions?

Sorry, one final one jumped in my head. But can we also -- again, I don't think EBITDA is a fair measure for the company. There's a lot of CapEx. There's a lot of corporate overhead to run these assets. So going forward, can we please report a free cash flow line? Again, I think it's a bit unfair to suggest that the company is making a positive operating profit, when clearly after all those costs, the company is actually losing a lot of cash. So just going forward, can we actually make it clear to shareholders what the underlying free cash flow of the company is, please?

Well, let me take that onboard. I see no reason why we wouldn't be one thing to be entirely transparent about our financial performance and how best to present that to shareholders. All right. Any other questions?

Just one final question for me, Gary. Look, going forward, clearly, the Board is committed to the huge CapEx. So there's going to be a number of changes for the worst. Number one, the interest receipts are going to fall dramatically. Like on your $140 million to 5%, there's $7 million that's going to start falling off a cliff. But number two, and I'd like some clarity on this, please, the flip side of your CapEx -- very large CapEx is your depreciation charge is going to go upwards through the roof, which is going to impact on your EBIT line very heavily. So there's going to be two very negative aspects in the bottom line, the interest going down, depreciation are going up. And maintenance CapEx will go up with all these new rides coming in. But one offsetting factor, maybe for Greg, is the reduction in corporate costs. David was good to clarify before that the Board costs are falling dramatically. That's good. But the corporate costs of $8 million for a company this small are very high. I know part of it's insurance. But yes, there's a couple of negatives there. Depreciation is going to go up dramatically, which is going to hit your EBIT line. Interest below the EBIT line is going to fall, interest perceived. At least there should be some offset by corporate costs. Are they going to fall to $6 million from $8 million? Appreciate some clarity and appreciate some clarity on where depreciation is going to be once this CapEx is fully factored into play.

I'll defer to Jose on depreciation. In terms of central costs, one of the things that we highlighted back in 2017 were the central costs at Ardent, which were running at about $18 million. That has come down obviously very, very significantly as the group has shrunk a significant proportion as you acknowledged, comprised of insurance costs that's subject to an imminent independent review of what we can do to potentially look to reduce those costs. But there are certain inherent costs with being a listed company, whatever size you may be. But that is constantly under focus. And hopefully, we'll be able to report further when we -- and for the half year results. Jose, any thoughts on depreciation moving forward?

Yes. Well, I'll start by saying we don't generally give guidance on earnings. And that would include depreciation. But yes, of course, if we're spending capital, then the depreciation expense will go up in the future. It's worth bearing in mind though that the nature of the assets that we're spending money on are very long-lived assets. So depreciation of those assets would be over a quite long period of time. So I'm not sure that we'd see them go through the roof as you sort of say. But yes, that will -- it's reasonable to expect that they will go up a bit, yes.

Thank you. Chris, any other questions?

Gary, there's two final questions online. I'll read them quickly. First one, have we had any discussions with BGH, the new private equity owners of Village Roadshow, in conjunction with the Kirby family? Doesn't it make sense to sell Dreamworld to Village? And do we envisage there would be any ACCC, Gold Coast City Council or Queensland state government concerns if that was proposed?

The short answer is we've had no discussions. What's the next question, Chris?

The final question, I'll read it, has an element of response to the auditor, who's still on the line. In terms of council rates in Queensland land tax, what capital improved valuations are these two government agencies putting on our 55-hectare land holding at Dreamworld? Could the auditor also comment as to why the holding value of Dreamworld wasn't further written down, given that the market cap is at such a discount to book value?

Anthony, are you there?

Chris, it's Anthony Ewan here. I'll defer that question to Jose, who might be able to explain the process undertaken for determining impairment and indeed the analysis management that's undertaken with regard to net asset value versus market cap.

Yes, okay. When we're -- and I don't want to bore you with technical accounting sort of stuff. But when we're looking at impairment, we look at -- the accounting standards require us to look at the higher of the fair value of assets and the value in use of the assets. And those two measures can sometimes be quite different. Fair value would probably be more akin to what we're sort of seeing with respect to market cap. Obviously, the group is not just Dreamworld, it's SkyPoint and other elements as well and including cash and other things that are on our balance sheet. So a lot of the impairment work that we do is around value in use. That's -- we pull together discounted cash flow models that go out sort of 10 years with assumptions around what -- where we see the recovery of the business going and the future earnings and future maintenance CapEx and appropriate discount rate. We get an independent advice from an external audit -- not audit firm, an accounting firm around the discount rate that we use. So that's independently determined. And we come up with a discounted -- a net present value. And if that value is above the book value of our assets, we don't have an impairment. And that is indeed the case. And that's obviously subject to audit review. There's a lot of scrutiny, a lot of questioning. The auditors have valuation specialists on their team that grill us, grill the independent accounting firm that determines our discount rate. And at the end of all of that, they're obviously sort of satisfied that what we come up with is an appropriate value in use and doesn't result in any write-down.

Does that discount [indiscernible]

It's gone up slightly. That is disclosed in the financial statements in the property, plant and equipment note. Interest rates -- in determining a weighted average cost of capital, they have regard to the risk-free rate and the -- in terms of the short-term fluctuations that we've seen with the RBA cash rate going up quite sharply at the last sort of 12 to 18 months. That doesn't necessarily go straight onto our discount rate. Because when we're looking at a 10-year horizon, we look at what is the appropriate discount rate for that 10-year horizon. And I sincerely hope that the current interest rate environment that we're sort of seeing isn't going to be around for the next 10 years and beyond. So the independent sort of firm that helps us with that takes a longer term. But yes, I mean, short answer is [indiscernible] has gone up slightly.

10-year bonds of 4.8% at the moment. So they're all pretty similar to the cash rate, back higher.

Yes. Well, we disclosed the discount rate in the PP&E note.

All right. Chris, any other questions?

Gary, there's a final question that's come in, in two parts. I think I'll read the question. I can probably answer the first part and then the second part is for you. Is the $4 million class action settlement figure mentioned in the ballpark of what happened? And was this covered by insurers, shareholders or a combination of the two? I'll refer the shareholder who asked that question to our ASX announcement made on the -- the morning of the 24th of August regarding the level of insurance coverage. And the one-off contribution by the company was also covered earlier in the presentation. Second part of the question, Gary, does the Chair believe Australia's shareholder class action regime needs to be reformed in light -- and in light of our experience, was the action justified in the circumstances?

Sorry, I don't propose to respond. This is not the forum for me to share my views on the Australian position relating to class actions. And as you've indicated, Chris, you've responded appropriately to dealing with the first part of the question. Are there any other questions?

No, that concludes the questions.

Okay. All right. Look, before concluding -- and let me say thank you to every shareholder who took the time to either attend in person or online, and thank them for their interest and for their ownership position in Ardent. To say that this has been a challenging exercise throughout the last few years would be one of the great understatements of all time. As we look at the challenges that this group has faced, one may care to recall, and I think, David, you acknowledged this, that if one goes back to February 2020, this company had a market capitalization of $780 million. And we were seeing good signs of recovery. There might have been some hopeful signs of trying to sort out Dreamworld. Within a matter of weeks, the market capitalization plummeted to $53 million, down to as low as $0.12 [indiscernible]. With a challenge to raise $200 million in financing to keep our businesses going, the Board successfully navigated our position through that period. We did not have recourse to what would have been a very highly dilutionary equity raising or a fire sale of assets. And this Board negotiated financing through the partnership with RedBird Capital and the procurement of a loan on very favorable terms for the company from the Queensland government. So let us hope that when we next meet that we'll be able to hopefully show you some positive results from the investments that we have made today, and thank everyone for their attendance today. I'll now formally close the meeting.