Graham Burke, the Australian film industry veteran, is to step down from Village Roadshow by the end of the year. His move follows a period of feuding among the family owners, and significant corporate restructuring.
Describing the 2018-19 financial year, which runs to June, as a “reset and transition to FY20,” the group presented a financial result for the six months to December that it claimed showed recovery. Revenue from continuing operations increased by 3% from A$515 million in the equivalent half year, to $375 million (A$528 million). It incurred net losses of $250,000 (A$353,000).
Village said that it will seek a new CEO to replace Burke, and that Burke will stay with the company until the end of 2019, as a non-executive director to ensure a smooth transition. It acknowledged that Clark Kirby, chairman and CEO of Village’s theme parks business, is to be considered as an internal candidate.
Burke, now 77, joined the Roc Kirby-founded company as a ticket collector when he was just 14. “Graham is a giant of our industry and has been an integral part of Village Roadshow. Together we have seen the evolution of this company into the incredible entertainment business it its today, Graham having been part of it for 63 years,” said chairman Rob Kirby in a statement.
Rob Kirby and Burke came under fire last year from John Kirby, another family member and board director. He accused the management of running the company poorly, notably issuing inaccurate forecasts, and poor capital management.
Frustrated by a collapse of the company’s share price from a peak of A$7.92 in 2014, to as low as A$1.77 in July last year, John Kirby sought to bring in an investment bank and a proposal to break up the company. (After Friday’s twin announcements, the share price climbed 1.6% to A$3.28.)
The company has been faced with a succession of headwinds for the past two or more years. In October 2016 a fatal accident that killed four people occurred at rival Ardent Leisure’s Dreamland theme park. Attendances dropped at theme parks around Australia, including Village Roadshow’s. But the group’s cinema operation and film distribution activities have both been hit the arrival of streaming video operations – global giant Netflix and local incumbent Stan – which have had particular success in Australia. The company results acknowledge what it calls a “Netflix effect” and says that its film acquisition strategy has been “reoriented” and will become more selective.
Though the financial statements do not make mention of the criticisms invoked by John Burke and investment adviser David Kingston, Village has taken multiple steps to strengthen its balance sheet. These include a $36 million (A$50 million) equity raising in June 2018, the sale of the Wet ‘N Wild theme park in October (which John Kirby opposed), and a $265 million (A$374 million) debt refinance program in December. (In the previous financial year, Village sold its 50% stake in leading Singapore cinema chain Golden Village for $109 million [A$154 million]).
“Theme parks are realizing the rewards of an 18-month turnaround strategy. Cinema exhibition realized its second best first half industry result. Roadshow is proactively managing the transition to a digital universe. The team is focused on delivery and will not be distracted from the task at hand,” the company said in prepared comments attributed to Burke.
“The board intends to reinstate dividends at the full year if performance continues to meet expectations,” Village said in a filing.