Loading
Village Roadshow was forced last year to write down to zero its investment in Hollywood film production house Village Roadshow Pictures even though it has been responsible for blockbuster movies includingOcean’s 8,The Lego Movie,The Great Gatsby andZoolander.
Village Roadshow Pictures,after a period of financial difficulty,is now controlled by American private equity outfits Vine Alternative Investments and Falcon Investment Advisors.
John Kirby resigned as a Village Roadshow executive in 2015.
The value of the ASX-listed company dived from $1.2 billion in 2014 to just $370 million at the end of the last financial year,when Village Roadshow was forced to put Wet ‘n’ Wild Sydney up for auction.
Wet 'n' Wild in Sydney was a financial disaster for Village Roadshow,and was last year sold for just $37 million to Spanish firm Parques Reunidos.Credit:Nic Walker
John Kirby declined to comment but Mr Kingston confirmed his appointment and toldThe Age andTheSydney Morning Herald that"the cinemas and theme parks are quality assets".
"[However],they have been diluted by too much focus on Village's film and distribution investments and other non-core assets,"said Mr Kingston,who runs K Capital."Village would benefit from an independent chairman and the injection of some new senior management."
Mr Burke has been chief executive for almost 30 years,well beyond the average tenure of bosses of publicly-listed companies.
Loading
It is understood Arnold Bloch Leibler,which assisted Solomon Lew’s Premier Investments in its pursuit of department store chain Myer,has provided advice on Village Roadshow’s corporate governance arrangements.
Robert Kirby’s son Clarke is also involved in the business,now managing Village Roadshow’s theme park operations,and has been tipped as a possible successor to head the company.
John Kirby's and Mr Kingston’s preference would be to bring in an independent executive to run the company if Mr Burke departs.
Since Mr Kingston's appointment,considerable pressure has been brought to cut costs and capital expenditure,pushing the share price to $2.94,its highest point since April last year.
Mr Burke said John Kirby was a"very disgruntled and bitter individual"and pointed to a recovery in the theme park business to highlight a"dramatic turnaround"for Village Roadshow.
"The board has full confidence in management,"Mr Burke said.
He said the company had endured two difficult years due to an"act of God"following the 2016 Thunder River Rapids tragedy at Dreamworld.
Village Roadshow chief executive Graham Burke has led the company for three decades.Credit:Eddie Jim
"We are on a very positive trajectory as demonstrated by the ticket sales of the most important category,which is the annual and multi-day passes,"he said.
Mr Burke also backed Village Roadshow's ownership of the iPic and Hollywood production stakes,and said the latter"has strong medium-term prospects and no requirement for investment".
Market analysts have been scathing of Village Roadshow management in recent months,including brokers at investment bank CLSA,who told clients that the quality of the company’s assets “has never been in question – it is the management of these assets that is the issue”.
Village Roadshow reported a net profit of $219,000 last year,and a loss of $67 million a year earlier.
CCZ Equities analyst Roger Colman compared Village Roadshow to another local diversified cinema operator,Event Hospitality and Entertainment,controlled by the rich-list Rydge family.
Event,which operates cinemas of the same name in NSW and Queensland as well as Rydges and QT hotels and the Thredbo snow fields,had half the value of Village Roadshow in 2000.
Village Roadshow is now worth $553 million,while Event is valued at $2.1 billion.