Coast Entertainment (ASX: CEH), an owner and operator of premium Australian theme parks, has reported a solid performance in the first half of the 2025 financial year (FY25) driven by rising visitation numbers to its portfolio of tourist attractions.
More specifically, a 10.8 per cent jump in visitor numbers from six months prior helped to propel revenue to $47.7 million during the half-year.
This outcome marks the company’s highest first half revenue since the corresponding period in FY16. It also represents a 9.6 per cent increase from the previous half-year, and a 23.4 per cent boost from pre-COVID levels in the first half of FY20.
Resilient business model
Management noted that the growth in theme park attendance demonstrates the resilience of its business under challenging economic conditions. These include tempered consumer discretionary spending stemming from inflationary pressures and elevated interest rates, coupled with international visitations continuing to sit below historical levels.
Nevertheless, increased promotional activity such as the successful Black Friday sales campaign helped the company generate its highest aggregate value of ticket sales since the first half of FY16. Results for this metric in the first half of FY25 lifted by 7.1 per cent from the prior period, and by 32 per cent from the first half of FY20.
According to the company, this growth was primarily driven by an increase in annual pass sales and was accomplished despite the prior half-year benefitting from a large bulk sale to a reseller.
Operating earnings set to rise
Coast anticipates that its ‘Theme Parks and Attractions’ business will deliver double digit growth in operating earnings (EBITDA) in the first half of FY25, when excluding specific items.
At a broader level, it expects total group EBITDA to increase above prior period levels on the back of reduced corporate costs. This would mark the third consecutive half-year of positive earnings for the business.
Recovery in international guests
Separately, management added that international visitation continues to show a gradual comeback despite remaining below historical levels. However, the mix of international visitors in the first half of FY25 remained substantially different from pre-pandemic numbers, with visitation from Asian markets such as China still representing a small fraction of prior numbers.
Coast believes that further recovery in visitation from Asian markets will benefit its business.
New attractions to fuel growth
On an operational level, the company launched its highly anticipated Rivertown attraction late last year, located at its Dreamworld theme park on the Gold Coast.
It expects this new entertainment precinct – including the new Jane’s Rivertown restaurant – to play a pivotal role in driving attendance and enhancing the overall guest experience at Dreamworld.
Coast anticipates to realise further economic benefits from these new attractions in the second half of FY25 and beyond.
Additionally, its SkyPoint observation deck and entertainment venue delivered record revenues in the first half of FY25, despite international visitation remaining below historical levels.
SkyPoint offers panoramic views of the Gold Coast from Australia’s tallest building known as Q1. Here, guests can enjoy dining experiences, the highest external building climb in the country, as well as a host of other events.
Balance sheet strength drives share buy back
On the bottom line, Coast ended the period with a cash balance on nearly $60 million. Its robust balance sheet has helped facilitate an on-market share buyback which has seen the company purchase 48 million of its own shares through to August last year.
In November, Coast launched another on-market share buyback program for up to 10 per cent of the group’s issued capital. It has so far purchased 3.6 million shares valued at about $1.6 million as part of this initiative, representing some 8.3 per cent of the program’s total.
The share buy back campaign is set to recommence in the near term after being paused in late December.