Ardent Leisure Reports a Reasonable First-Half Fiscal 2014, but We Are Still Not Bowled Over

Ardent Leisure reported a solid first-half fiscal 2014, in line with our expectations. Group revenue increased 14.1% on the prior corresponding quarter to AUD 250.6 million, driven by an expansion of its portfolio of health clubs and family entertainment centres (Main Event). Underlying earnings before interest, tax, depreciation and amortisation, or EBITDA, grew by 13.9% to AUD 59.8 million, in line with underlying revenue growth. Performance was mixed across business segments with health clubs being the standout, reporting an EBITDA increase of 19.3% on the back of a successful restructure to outsource personal trainers. Main Event was also strong as the introduction of full-service casual dining drove an increase in foot traffic volumes. Constant-centre revenue grew 3.9%. Across the group, management noted a positive start to second-half fiscal 2014, with January trading conditions positive.