SYDNEY — At the end of one of the roughest weeks in Village Roadshow Ltd.’s history, marked by its stock price hitting an all-time low, managing director Graham Burke was doggedly fighting bad press and business setbacks.
Burke acknowledges VRL’s shares, which fell last week to $A1.28 (64¢), off 58% from their 12 month high, after a blizzard of negative stories in the local media, are hurting.
He does not dispute the company’s bottom line has suffered from the near-universal B.O. downturn, but argues VRL is wrongly perceived purely as an exhibitor and that little or no credit is being given to its other businesses, which are strong and profitable.
“Overall the company is in great shape. In the past 10 years, we’ve had annual compound growth in after-tax profits of 35%,” Burke tells Variety. “Our radio networks are in a strong position, and our theme parks are kicking goals.”
The exec is delighted with the ongoing successes of its production co-venture with Warner Bros., pointing to the No. 1 domestic bow of “Exit Wounds”; the U.S. hit “Miss Congeniality,” which just posted WB’s second-highest opening weekend ever in Oz; and the upcoming “Cats and Dogs,” which he predicts will be the sleeper of the summer.
Burke was keen to stress the positive developments after a flood of difficulties, including:
- A Sydney newspaper report about a series of frauds which bilked money from L.A-based Village Roadshow Pictures. Burke labels much of the story as “misinformation,” and says its net loss from the scams is just $1.9 million.
- The demise of Scape, the VRL-Ten Network Internet co-venture, which was placed in voluntary administration after burning through $22 million.
- A Federal Court suit filed by U.S.-owned exhib Reading against Roadshow Film Distributors over the latter’s decision to discontinue supplying firstrun films to Reading’s Market City fiveplex in Sydney. Roadshow booked films into that cinema for four months, but ceased last January, reasoning the returns were not viable.
Burke says he realizes disgruntled investors want “results, not words,” and vows the company will deliver, although it will probably take a year for its loss-making exhib business to turnaround.
The restructuring of VRL’s international cinema operations still has a way to go. Burke reiterated the plan is to scale back to 8-10 markets (down from 18 last year).
“We have sold our circuits in Germany and Hong Kong and we’re close to a sale in Switzerland,” he says.
French producer and distrib Pathe is said to be negotiating for the Swiss theaters, as well as VRL hardtops in France.