Ardent Leisure Group Limited
Annual Financial Report
for the year ended 25 June 2019
The financial report was authorised for issue by the Directors of Ardent Leisure Group Limited (ABN 51 628 881 603)
on 22 August 2019. The Directors have the power to amend and reissue the financial report.
Message from the Chairman
Dear Shareholders,
FY19 has been a year of transition for the Group.
While progress during the year has been slower than anticipated, we are beginning to see signs of improvement and the
emergence of positive trends, having put in place a solid platform for the growth of our businesses. We have appointed
high calibre leaders at both Main Event and Dreamworld who have extensive experience in business turnaround, growth
and the right strategic acumen to restore value for shareholders.
The financial performance of the Group has not met our expectations and has been impacted by several non-recurring
items such as non-cash impairments of certain previously impaired US centres, provision for an onerous lease, costs
associated with the restructuring of the Group and a tax expense in respect of prior years. Moving forward we do not
anticipate these items to continue to impact the Group. In relation to corporate costs, we have made good progress with
the continued reduction of recurring items.
The Group now consists of two distinct business divisions supported by a simplified corporate structure designed to
enable the Group to retain capital to fund investment and growth.
Theme Parks
John Osborne commenced as the new CEO of our Theme Parks division in November 2018 and brings a strong track
record in business strategy, turnaround performance and leadership. John is supported by a revamped, highly
experienced and motivated management team with individuals who hold deep theme park and Australian aviation
industry experience, particularly in safety, engineering and operations, and who are committed to Dreamworld’s recovery
and success.
During the year, the division has made solid progress with enhancing the guest experience through improved ride
availability and regular scheduling of special events and entertainment, such as Park after Dark, ABC Kids Month,
Winterfest and Cosentino Grand Illusionist. Sky Voyager, a world class flying theatre i-Ride and the first of its kind in the
Southern Hemisphere, has opened to the public and received excellent reviews in its first weeks of operation.
Dreamworld has also announced an exciting pipeline of new rides and attractions, including a new 1.2 km launch
rollercoaster supplied by world leading manufacturer MACK and based on their award winning Blue Fire design and a new
waterslide complex incorporating six body slides at WhiteWater World.
The Coronial Inquest into the tragic incident that occurred in October 2016 officially commenced in mid-June 2018 and
concluded in early December 2018. While the Coroner’s recommendations and findings have not yet been published, the
matters raised during the Inquest were confronting. The Board embraced the Coronial Inquest as an impetus to review
the safety systems and entrench the importance of safety culture throughout our entire operations. The Board reconfirms
its public commitment to implement all Coronial Inquest recommendations in consultation with Workplace Health &
Safety Queensland and the theme park industry.
Main Event
Main Event has also accomplished a great deal during FY19. While only one new centre was opened during the year, the
four centres opened in FY18 have produced a solid performance with an average return on investment of 30.7%. Three
new centres are currently under construction and due to open in FY20, bringing the total number of Main Event centres to
46 across 18 states.
Main Event’s leadership team has strong expertise in opening and operating multisite businesses. As its presence across
the United States grows, Main Event is increasingly becoming a preferred tenant of choice for landlords. The highly
experienced real estate development team has applied a disciplined approach to identifying new sites and a robust
pipeline is currently in place for development. The business aims to open five to eight new centres each year.
A central aspect of Main Event’s strategy is to drive long term traffic growth. During the year the business undertook
extensive consumer research to better understand its customer and target audience.
Message from the Chairman
Main Event (continued)
In FY20, management will focus on embedding Main Event’s new brand identity in existing markets, improving the guest
experience through enhanced team member engagement, guest-facing technology, leading entertainment offerings and
on-trend food and beverage. These areas of focus are targeted at driving growth in walk-in, birthday parties and
corporate business.
Main Event has built a solid platform for growth with a clear brand position and emphasis on guest experience and
innovation. The team is engaged and excited about the future.
Restructure of the stapled Group
On 24 December 2018, following shareholder approval at the Annual General Meeting on 20 November 2018 and with
approvals from regulators and the Supreme Court of New South Wales, Ardent Leisure’s corporatisation proposal came
into effect. The stapled securities previously held by securityholders were exchanged for shares in a new listed entity –
Ardent Leisure Group Limited. The corporatisation was implemented by way of company and trust schemes of
arrangement.
The benefits of the corporatisation include greater flexibility to fund investment in growth, a more attractive corporate
structure for a broader range of investors, reduced regulatory uncertainty and administrative costs commonly associated
with stapled structures and simplified financial reporting.
Debt refinance
In April 2019 we announced the completion of a US$225 million debt facility secured and guaranteed by Main Event. This
new funding enables us to make the necessary investments to return the Theme Parks division to profitability and support
the development of new Main Event centres in the United States. In finalising the new debt facility, Ardent’s existing
Australian bank debt facility has been fully repaid.
Board changes
The Board has now stabilised with a good mix of skills, experience, tenure and diversity appropriate for the size and
operations of Ardent. During the period, Antonia Korsanos commenced as a Non-Executive Director and two long-
standing directors, Roger Davis and Don Morris AO retired from the Board.
Looking ahead
Promising signs are already starting to emerge for FY20. With first class management teams in both our businesses,
exciting investments in rides and attractions at Dreamworld and Whitewater World and a development program re-
established at Main Event, we are looking forward to the Group returning to profitability.
On behalf of the Board, I would like to thank shareholders for their continued support. We are excited about the future
and have confidence that our businesses can deliver on their strategic objectives and deliver value to shareholders.
I would also like to take this opportunity to acknowledge and thank our team members for their dedication and hard work
over the last 12 months.
Ardent’s Annual General Meeting will be held on 13 November 2019 at the offices of Gilbert + Tobin in Barangaroo,
Sydney. We look forward to seeing shareholders at the meeting.
Dr Gary H. Weiss AM
Chairman
Annual Financial Report
Balance Sheet
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Financial Statements
Statement of Comprehensive Income
Directors’ Report
Income Statement
Overview
1.
Performance
2.
3.
4.
5.
6.
Basis of preparation
2
27
28
29
30
31
32
32
32
34
34
Segment information
37
Revenue from operating activities
38
Other expenses
38
Borrowing costs
38
Taxation
43
Cash flow information
45
Losses per share/security
Distributions and dividends paid and payable 45
45
45
46
47
47
48
48
48
52
Property, plant and equipment
Intangible assets
Receivables
Inventories
Construction in progress
Other assets
Payables
Long term assets
Working capital
Debt and equity
Contributed equity
Other equity
Reserves
Accumulated losses
Interest bearing liabilities
Financial risk management
Derivative financial instruments
Capital and financial risk management
Fair value measurement
Unrecognised items
Contingent liabilities
Capital and lease commitments
Events occurring after reporting date
Other
Investment held at fair value
Provisions
Net tangible assets
Discontinued operations
Remuneration of auditor
Equity-based payments
Related party disclosures
Parent entity financial information
Directors’ declaration to shareholders
Independent auditor’s report to shareholders
Investor Analysis
Investor Relations and Corporate Directory
54
54
54
55
56
56
57
57
58
63
65
65
65
66
66
66
67
69
69
72
72
77
78
80
81
86
87
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Ardent Leisure Group Limited | Annual Report 2019
1
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Directors’ Report
Directors’ Report
The Directors of Ardent Leisure Group Limited (Company)
present their report together with the consolidated
financial report of the Company and its controlled entities
(collectively, the Group) for the year ended 25 June 2019
(FY19).
Ardent Leisure Group Limited is a company limited by
shares, incorporated and domiciled in Australia. Its
registered office and principal place of business are Level 8,
60 Miller Street, North Sydney NSW 2060.
The consolidated financial report is a continuation of the
previously reported combined financial statements of
Ardent Leisure Group (Stapled Group), which comprised
Ardent Leisure Trust (Trust) and its controlled entities and
Ardent Leisure Limited (ALL) and its controlled entities.
1.
Corporate restructure of the Stapled Group
On 3 October 2018, Ardent Leisure Group announced its
proposal (Proposal) to establish a new listed company,
Ardent Leisure Group Limited, as the single head entity of
the Group, in place of the previous stapled structure.
The Proposal was approved by Ardent Leisure Group
security holders on 20 November 2018 and by the Supreme
Court of New South Wales on 28 November 2018.
Implementation of the Proposal occurred effective 24
December 2018, by way of company and trust schemes of
arrangement, resulting in previously stapled securities
being exchanged for ordinary shares issued by the newly
listed entity. On implementation of the Proposal, eligible
security holders were issued shares in the Company in the
same proportion as stapled securities previously held.
The Proposal does not impact key areas of the Group,
including:
The underlying business and assets;
Funds raised, acquisitions or disposals of businesses
or assets;
The Group Directors and Group management team;
and
Overall investments and interests of eligible
securityholders.
Refer to Notes 1, 6(a) and 19 to the financial statements for
further details regarding the accounting for the
implementation of the Proposal.
2
Ardent Leisure Group Limited | Annual Report 2019
While this is the first annual financial report with Ardent
Leisure Group Limited as parent entity of the Group, the
consolidated financial report is accounted for as a
corporate reorganisation rather than a business
combination. Accounting for a corporate reorganisation
requires that the new group’s financial statements reflect
the financial position and performance of the new group as
if the restructure had always been in place. Therefore, the
corporate restructure is deemed to have been in place for
the entire period and the Group accounting policies are
consistent with the previous Stapled Group’s accounting
policies except as disclosed in the notes to the financial
statements.
2.
Directors
The following persons have held office as Directors of the
Company and, prior to the corporate restructure, were
Directors of Ardent Leisure Management Limited
(Manager) (as responsible entity for the Trust) and Ardent
Leisure Limited during the period and up to the date of this
report unless otherwise stated:
Gary Weiss AM;
David Haslingden;
Randy Garfield;
Brad Richmond;
Antonia Korsanos (appointed 1 July 2018);
Don Morris AO (resigned 31 May 2019); and
Roger Davis (resigned 17 August 2018).
3.
Principal activities
The Group’s principal activity is to invest in and operate
leisure and entertainment businesses in Australia and the
United States of America. There were no significant
changes in the nature of the activities of the Group during
the period.
4.
Dividends and distributions
No dividend was paid or declared for the half year ended
25 December 2018 (26 December 2017: Trust distribution
of 2.00 cents per security) or has been paid or declared for
the year ended 25 June 2019 (2018: Trust distribution of
6.50 cents per security).
5.
Operating and financial review
Overview
The Group’s strategy is to focus primarily on leisure and
entertainment segments within its geographical areas of
operation with mass market appeal. During the period, two
businesses contributed to the overall result: Main Event and
Theme Parks.
Directors’ Report
5.
Operating and financial review (continued)
Group results
The performance of the Group, as represented by the aggregated results of its operations for the period from 27 June 2018 to
25 June 2019 (364 days), was as follows:
27 June 2018 to 25 June 2019
Segment revenue
Segment EBITDA
Depreciation and amortisation
Segment EBIT
Borrowing costs
Interest income
Net loss before tax
Income tax expense
Net loss after tax
The segment EBITDA above includes the
following specific items:
Impairment of property, plant and
equipment
Pre-opening expenses
Dreamworld incident costs, net of
insurance recoveries
Provision for onerous lease contract
Restructuring and other non-recurring items
Selling costs associated with discontinued
operations
Net gain/(loss) on disposal of assets
The income tax expense above includes
the following specific items:
Tax impact of specific items listed above
Impact of destapling and corporatisation
of the Group
Australian tax losses for which deferred tax
asset derecognised
Estimated tax payable in respect of prior years
Continuing
operations
$’000
Discontinued
operations
$’000
Main Event
$’000
416,164
47,278
(42,293)
4,985
Theme
Parks
$’000
67,133
(19,834)
(9,226)
(29,060)
Corporate
$’000
4
(15,137)
(837)
(15,974)
483,301
12,307
(52,356)
(40,049)
(8,262)
339
(47,972)
(12,293)
(60,265)
(17,567)
(2,791)
-
(3,072)
(5,180)
-
1,695
(26,915)
-
-
(5,407)
-
(3,048)
-
(1,410)
(9,865)
-
-
(17,567)
(2,791)
-
-
(4,767)
-
(334)
(5,101)
(5,407)
(3,072)
(12,995)
-
(49)
(41,881)
5,652
3,203
1,530
10,385
-
-
3,865
3,865
-
-
5,652
-
-
3,203
(12,376)
(15,919)
(22,900)
(12,376)
(15,919)
(14,045)
Total
$’000
483,301
11,695
(52,356)
(40,661)
(8,262)
339
(48,584)
(12,293)
(60,877)
(17,567)
(2,791)
(5,407)
(3,072)
(12,995)
(612)
(49)
(42,493)
10,385
3,865
(12,376)
(15,919)
(14,045)
-
(612)
-
(612)
-
-
(612)
-
(612)
-
-
-
-
-
(612)
-
(612)
-
-
-
-
-
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Ardent Leisure Group Limited | Annual Report 2019
3
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Directors’ Report
5.
Operating and financial review (continued)
Group results (continued)
The performance of the Group, as represented by the aggregated results of its operations for the prior period from 1 July 2017
to 26 June 2018 (361 days), was as follows:
1 July 2017 to 26 June 2018
Segment revenue
Segment EBITDA
Depreciation and amortisation
Segment EBIT
Borrowing costs
Interest income
Net (loss)/profit before tax
Income tax benefit/(expense)
Net (loss)/profit after tax
The segment EBITDA above includes the
following specific items:
Valuation loss - property, plant and
equipment and investment held at fair value
Impairment of intangible assets including
goodwill
Impairment of property, plant and
equipment
Pre-opening expenses
Dreamworld incident costs, net of
insurance recoveries
Restructuring and other non-recurring items
Gain on sale of discontinued operations
Selling costs associated with discontinued
operation classified as held for sale
Loss on disposal of assets and sale and
leaseback of Main Event centre
The income tax benefit/(expense) above
includes the following specific items:
Restatement of deferred tax balances to
reflect US tax reforms
Tax impact of specific items listed above
Main Event
$’000
355,571
14,159
(33,210)
(19,051)
Theme
Parks
$’000
66,822
(93,795)
(8,679)
(102,474)
Corporate
$’000
-
(15,519)
(1,144)
(16,663)
Continuing
operations
$’000
422,393
(95,155)
(43,033)
(138,188)
(10,339)
191
(148,336)
29,522
(118,814)
Discontinued
operations
$’000
125,061
41,195
(12,875)
28,320
(65)
-
28,255
(131)
28,124
Total
$’000
547,454
(53,960)
(55,908)
(109,868)
(10,404)
191
(120,081)
29,391
(90,690)
-
-
(38,287)
(5,900)
-
(7,405)
-
(75,031)
(390)
(75,421)
(3,583)
(1,188)
(4,771)
-
-
(75,421)
(4,771)
(1,000)
-
(6,158)
-
-
-
-
(39,287)
(5,900)
-
(571)
(39,287)
(6,471)
-
(1,849)
-
(6,158)
(9,254)
-
-
-
24,987
(6,158)
(9,254)
24,987
-
-
-
-
(133)
(133)
(654)
(52,246)
(493)
(86,265)
(66)
(3,493)
(1,213)
(142,004)
(921)
23,362
(2,134)
(118,642)
12,230
14,629
26,859
-
1,865
1,865
-
1,048
1,048
12,230
17,542
29,772
-
499
499
12,230
18,041
30,271
4
Ardent Leisure Group Limited | Annual Report 2019
Directors’ Report
5.
Operating and financial review (continued)
Group results (continued)
The Group reported a loss of $60.9 million for the year
ended 25 June 2019, compared to a net loss of $90.7
million in the prior year.
Year on year comparison of the Group’s results is impacted
by the sale of two businesses, non-cash valuation losses on
the Dreamworld and SkyPoint properties in the prior year
as well as impairment charges at several US entertainment
centres in the current and prior years. The current year
continued to be impacted by challenging post-incident
trading conditions for the Theme Parks business, associated
incident costs due to Coronial Inquest hearings, non-
recurring restructuring costs, as well as further impairment
charges at several US entertainment centres.
Total revenue for the Group declined by $64.2 million
compared to prior year due to reduced revenue of $125.1
million from the discontinued businesses reflecting the sale
of the Bowling & Entertainment and Marinas businesses,
partially offset by an increase in revenue from continuing
operations of $60.9 million, or 14.4%.
Total EBITDA has improved by approximately $65.7 million,
from a loss of $54.0 million in FY18 to a profit of $11.7
million in FY19 driven by an increase of $107.5 million from
continuing businesses, partially offset by a loss of
contribution from discontinued operations of $41.2 million.
Performance of continuing businesses has improved driven
by:
Incremental revenue and EBITDA in Main Event due to
full year contributions from three centres that opened
during the prior year and one new centre that opened
during the current year;
$79.6 million non-cash valuation loss and impairment
charges in Theme Parks in the prior year, which
included a valuation loss on Dreamworld of $75.0
million, a SkyPoint revaluation decrement of $3.6
million and $1.0 million write-down of other assets
(2019: $Nil);
Non-cash impairments of property, plant and
equipment in certain previously impaired
underperforming Main Event centres, amounting to
$17.6 million in the current year, compared to $38.3
million in the prior year. The current year was also
impacted by a $3.1 million onerous lease expense
associated with one of the impaired centres (2018: $Nil);
A $3.1 million reduction in pre-opening expenses due
to fewer Main Event centre openings in the current
year;
A $0.8 million decrease in costs relating to the Thunder
River Rapids ride incident at Dreamworld, net of
insurance recoveries, which amounted to $5.4 million
(2018: $6.2 million);
$1.2 million lower net losses on disposal of assets in
FY19 as the current year benefited from higher
insurance proceeds received in relation to hurricane
and fire claims;
A $2.1 million reduction in borrowing costs due to large
debt repayments and facility reductions following the
sale of the Bowling & Entertainment and Marinas
businesses in the prior year; and
A $1.6 million impairment of the investment held at fair
value and intangible assets in Corporate in the prior
year (2019: $Nil);
Partly offset by:
A $3.7 million increase in restructuring and other non-
recurring items due to the Group being impacted by
several one-off expenses as a result of restructuring
activity in the current year, including destapling and
corporatisation of the Group, consulting costs,
employee related costs, as well as site exploration costs
incurred; and
A $12.3 million tax expense in the current year
compared to a $29.5 million tax benefit in the prior
year as a result of the following:
- The current year includes an expense of $15.9
million in relation to further tax payable in respect
of prior financial years. The Group has been in
discussions with the Australian Taxation Office
(ATO) regarding the tax treatment of intragroup
leases by the previous stapled group in prior years.
Although these discussions are ongoing, it is likely
that the outcome will result in tax payments and
the liability recognised represents management’s
best estimates as at 25 June 2019;
- The Group has recorded an expense for $12.4
million in the year in respect of Australian tax losses
for which deferred tax assets have now been
derecognised. The recoverability of these losses
against future taxable income is not considered
probable under AASB 112 Income Taxes; and
- The prior year benefitted from a $12.2 million credit
relating to the restatement of Main Event’s deferred
tax balances in response to US tax reforms, which
lowered the US corporate tax rate.
The results of the discontinued operations in the prior
year include trading EBITDA for the periods to the date
of disposal of the Bowling & Entertainment business,
being 30 April 2018, and the Marinas business, being 14
August 2017. The discontinued operations result also
includes a gain on the disposal of the Bowling &
Entertainment business after tax of $20.3 million, and a
gain on the disposal of the Marinas business after tax of
$4.7 million.
Ardent Leisure Group Limited | Annual Report 2019
5
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Directors’ Report
5.
Operating and financial review (continued)
Main Event
The performance of Main Event, in US dollars, is summarised as follows:
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
Total revenue
EBRITDA
Property costs
EBITDA
Constant centres
Non-constant centres
New centres opened in FY19
Corporate and regional office
expenses/sales and marketing
Other specific items
Total
s
t
n
e
m
e
t
a
t
S
2019
2018
Change
US$'000
US$'000
297,347
77,547
(43,400)
34,147
EBRITDA
2019
US$'000
99,463
32,767
1,061
(39,080)
(16,664)
77,547
275,457
48,678
(36,788)
11,890
EBRITDA
2018
US$'000
99,367
25,673
-
(37,351)
(39,011)
48,678
%
7.9
59.3
18.0
187.2
Change
%
0.1
27.6
4.6
(57.3)
59.3
Revenue
2019
US$'000
216,869
76,518
3,960
Revenue
2018
US$'000
217,408
58,049
-
Change
%
(0.2)
31.8
297,347
275,457
7.9
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
EBITDA margins in the current year improved compared to
the prior year due to lower non-cash impairments, non-
recurring costs and pre-opening expenses. Additionally,
central and regional costs as a percentage of revenue
improved. Partially offsetting these improvements was a
decline in centre level margins due to lower sales volumes
per centre and higher fixed cost structure at certain centres.
Management has identified several strategic priorities,
including developing brand architecture and driving higher
awareness, enhancing the guest experience, delivering
leading edge entertainment, food and beverage
innovation, and developing profitable new centres.
During the year, total US dollar revenue grew by 7.9%,
reflecting the full year impact of centres opened in FY18 as
well as the contribution from a new centre opened in FY19.
Constant centres revenue decreased by 0.2% compared to
the prior year, primarily driven by fewer promotional
activities and increased competition. On a like-for-like basis
(excluding the benefit of three additional trading days in
FY19), constant centre revenue decreased 1%. Constant
centres event business has however grown by
approximately 6%, reflecting strong corporate business
driven by sales leadership focus and realignment.
One new centre opened in the first half of FY19 in
Highlands Ranch, Colorado, which is a new market. This
brings the number of centres to 42 across 17 states as of
June 2019 (2018: 41 centres across 16 states). Pre-opening
expenses of US$2.0 million has decreased by US$2.5 million
compared to prior year as a result of fewer centre openings
in the current year.
EBITDA in current and prior year continued to be impacted
by non-recurring restructuring expenses and non-cash
impairment and onerous lease provision charges
associated with previously impaired underperforming
locations, which reflects difficult trading conditions as a
result of real estate quality and ongoing brand challenges
associated with the former business that operated these
locations.
6
Ardent Leisure Group Limited | Annual Report 2019
Directors’ Report
5.
Operating and financial review (continued)
Theme Parks
The division continued to be adversely impacted by the Thunder River Rapids ride incident in October 2016. The performance
of the Theme Parks is summarised as follows:
Total revenue
EBRITDA
Property costs
EBITDA
Attendance
Per capita spend ($)
The Theme Parks business, consisting of Dreamworld,
WhiteWater World and SkyPoint, reported revenue of $67.1
million for the year ended 25 June 2019, up 0.5% on prior
year. The increase in revenue was driven by an uplift in
average per-capita spend of 13.1%. Attendances in FY19
were however adversely impacted by the Coronial Inquest
hearings held between June to December 2018, along with
the delayed opening of Sky Voyager.
The division recorded an EBITDA loss of $19.8 million,
compared to an EBITDA loss of $93.8 million in the prior
year. The improvement is largely driven by prior year being
adversely impacted by $79.6 million of non-cash valuation
loss and impairment charges relating to Dreamworld and
SkyPoint. This was partially offset by the division recording
$3.0 million of non-recurring restructuring costs in the
current year, which largely relates to consulting costs and
employee related costs (2018: $Nil).
Excluding these valuation loss, impairment, incident related
expenses, non-recurring expenses and loss on disposal of
assets, EBITDA for the division was $2.4 million lower than
prior year due to higher costs across safety, repairs and
maintenance and other operating costs. Restructuring in
the second half of the year has seen these rising costs being
rationalised.
Strategic focus
Following the sale of the Marinas business and the Bowling
& Entertainment business, the common theme across the
Group’s assets is the provision of leisure and entertainment
experiences. However, each business has its own unique
strategic position and objectives, and is at different stages
of evolution with discrete opportunities for growth and
unlocking value.
(i)
Main Event
Main Event’s strategic goal is to become a leading
customer experience-driven leisure and entertainment
brand in the US. This business has expanded its number of
centres rapidly over the last few years and management is
focused on ensuring there is the appropriate balance
between growth of existing business as well as new centre
development through disciplined real estate selection
process.
2019
$'000
67,133
(18,360)
(1,474)
(19,834)
2018
$'000
66,822
(92,294)
(1,501)
(93,795)
1,459,621
45.99
1,642,881
40.67
Change
%
0.5
(80.1)
(1.8)
(78.9)
(11.2)
13.1
The availability of quality sites in trade areas that the
business wants to expand into, along with the long
development process to construct a Main Event family
entertainment centre, may cause variations in the number
of centres opened in a given year. Management will
continue to look at strategic growth opportunities in
existing markets as well as new trade areas. Furthermore,
the business will explore ground-up developments as well
as second-generation retail opportunities, including mall
locations.
(ii)
Theme Parks
The key focus is on driving attendance back to historic
levels through a combination of “smart” capital investment,
an event pipeline, developing new and unique attractions
and food, retail and events products all of which provide
opportunities to promote and target revisitation.
Investments will be targeted to drive visitation and will be
economically responsible. This includes plans to install
major new attractions at Dreamworld to increase visitations
to the Theme Parks and drive average per capita spend.
The wellbeing of Dreamworld’s staff has also remained a
key focus of management, with a number of wellness and
support programs in place to assist individual team
members with resilience and coping with challenging
environments.
As previously communicated, the Group is committed to
implementing all key recommendations arising from the
Coronial Inquest.
The excess land that sits around the Dreamworld site is
potentially of value. The park occupies just over 50% of the
land that is owned and a process of determining the best
use of this land is in progress. This may include a build out
of tourist related adjacencies around the park itself. The
plan may also involve an element of other commercial and
residential uses.
Ardent Leisure Group Limited | Annual Report 2019
7
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Directors’ Report
6.
Significant changes in the state of affairs
In the opinion of the Directors, there were no significant changes in the state of affairs of the Group that occurred during the
year not otherwise disclosed in this report or the financial statements.
7.
Interests in the Group
The movement in shares/securities of the Group during the year is set out below:
Shares/securities on issue at the beginning of the year
Shares/securities issued under Dividend/Distribution Reinvestment Plan
Shares/securities issued as part of the Group's employee equity-based payments plans
Shares/securities on issue at the end of the year
2019
2018
471,344,533
8,361,483
-
469,153,284
1,510,100
681,149
479,706,016 471,344,533
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
8
Ardent Leisure Group Limited | Annual Report 2019
Directors’ Report
8.
Information on Directors
Gary Weiss AM
Chair
Appointed:
David Haslingden
Director
Appointed:
Ardent Leisure Group Limited – 18 September 2018
Ardent Leisure Group Limited – 18 September 2018
Age: 66
Age: 58
David Haslingden brings to the Board considerable
international business experience, particularly in North
America and Europe.
David is a director and major shareholder of Blue Ant Media
Inc, a Canadian company that owns and operates
production companies and cable networks in Canada and
around the world. He is also Chairman of the Australian
Geographic Society.
Previously, David was Chairman and a non-executive
director of Nine Entertainment Co. Holdings Limited,
President and Chief Operating Officer of Fox Networks
Group and Chief Executive of Fox International Channels.
David holds a Bachelor of Arts and Bachelor of Laws from
The University of Sydney and a Master of Law from the
University of Cambridge.
David is Chair of the Remuneration & Nomination
Committee and is a member of the Safety & Risk Review
Committee and the Dreamworld Committee. He is also
Chair of the Dreamworld Wildlife Foundation. David was
appointed Lead Independent Director in May 2018.
Former listed directorships in the last three years:
Nine Entertainment Co. Holdings Limited (resigned 1 March
2016)
Interest in shares:
331,673
Dr Weiss is currently the Executive Director of Ariadne
Australia Limited. He is Chairman of Ridley Corporation
Limited and Estia Health Limited and a Non-Executive
Director of Thorney Opportunities Limited and The Straits
Trading Company Limited.
Dr Weiss is also a Commissioner of the Australian Rugby
League Commission.
He was formerly Chairman of ClearView Wealth Limited
and Coats Plc, a former executive director of Whitlam,
Turnbull & Co and Guinness Peat Group plc and sat on the
board of Westfield Holdings Limited, Premier Investments
Ltd, Pro-Pac Packaging Limited and a number of other
public companies. Dr Weiss has also been involved in
managing large businesses with operations in many
regions including Europe, China and India and is familiar
with investments across a wide range of industries,
corporate finance and private equity type deals.
Dr Weiss holds an LLB (Hons) and LLM from Victoria
University of Wellington and a Doctor of the Science of Law
(JSD) from Cornell University. He was admitted as a
Barrister and Solicitor of the Supreme Court of New
Zealand, a Barrister and Solicitor of the Supreme Court of
Victoria and as a Solicitor of the Supreme Court of New
South Wales.
Gary is Chair of the Safety & Risk Review Committee, Chair
of the Dreamworld Committee and a member of the Audit
& Risk Committee and Main Event Committee.
Former listed directorships in the last three years:
ClearView Wealth Limited (resigned 17 May 2016)
Tag Pacific Limited (resigned 31 August 2017)
Pro-Pac Packaging Limited (resigned 27 November 2017)
Premier Investments Limited (resigned 28 July 2018)
Interest in shares:
70,549,826
Ardent Leisure Group Limited | Annual Report 2019
9
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Directors’ Report
8.
Information on Directors (continued)
Randy Garfield
Director
Appointed:
Brad Richmond
Director
Appointed:
Ardent Leisure Group Limited – 18 September 2018
Ardent Leisure Group Limited – 18 September 2018
Age: 67
Age: 60
Brad is a Certified Public Accountant with 37 years’
experience in finance, operations and strategic planning in
the full-service restaurant industry in North America. Brad
recently held the position of Senior Vice President and
Chief Financial Officer of Darden Restaurants Inc., the
world’s largest full-service restaurant company operating
multiple brands including Olive Garden, LongHorn
Steakhouse, Season’s 52, The Capital Grille, Eddie V’s, Yard
House and Bahama Breeze. Prior to this position, Brad held
a number of other roles at Darden including Senior Vice
President and Corporate Controller and Senior Vice
President, Brand Financial Leader at various Darden brands.
Before joining Darden, Brad was a senior auditor with Price
Waterhouse & Co.
Brad holds a Bachelor of Sciences/Bachelor of Arts degree
from the University of Missouri.
Brad is Chair of the Main Event Committee, a member of
the Remuneration & Nomination Committee and a
member of the Audit & Risk Committee.
Former listed directorships in the last three years:
None
Interest in shares:
310,000
During his 48 year travel industry career, Mr Garfield spent
over 30 years working in senior executive roles specialising
in global marketing and sales, sponsorship development
and sales operations.
As Executive Vice President of Worldwide Sales & Travel
Operations at Walt Disney Parks & Resorts, he led the
worldwide sales, convention services, resort contact centres
and distribution marketing efforts for the Disneyland Resort,
Walt Disney World Resort, Disneyland Paris, Hong Kong
Disneyland Resort, Shanghai Disney Resort, Disney Cruise
Line, Disney Vacation Club, Adventures by Disney, Aulani-a
Disney Resort & Spa in Hawaii and Golden Oak. Throughout
his 20+ year Disney career, he also served as President of
Walt Disney Travel Company, one of the largest tour
operators in the USA.
Prior to joining Disney, Randy also served as Vice President
of Sales for Universal Studios Hollywood starting in 1986
where he helped generate record attendance and trail
blazed the launch of Universal Studios Florida by crafting
their pre-opening sales plan. He moved to Orlando in
summer 1989 as Executive Vice President of Marketing and
Sales/Chief Marketing Officer and led the business through
its pre-opening launch and for the following three years
during which he also served in a key role on the team which
formulated the expansion plan including a second theme
park as well as hotels and a massive retail, dining and
entertainment complex.
Randy’s current directorships include Rocky Mountaineer,
US Travel Association and Destination Canada.
Previous board roles include the US Travel Association
(Chairman), Brand USA, Visit California, Visit Florida and Visit
Orlando where he served as the longest tenured Chair.
Randy is an inductee into the US Travel Hall of Leaders, and
has been recognised three times as one of the most
extraordinary sales and marketing minds by Hospitality
Sales & Marketing Association International.
Randy is a member of the Safety & Risk Review Committee,
Dreamworld Committee and Main Event Committee.
Former listed directorships in the last three years:
None
Interest in shares:
Nil
10
Ardent Leisure Group Limited | Annual Report 2019
Directors’ Report
8.
Information on Directors (continued)
9.
Company Secretary
The Group’s Company Secretary is Bronwyn Weir. Prior to
being appointed Company Secretary, Bronwyn was the
Assistant Company Secretary for the Group from 21
November 2014. Before joining the Group, Bronwyn was
Assistant Company Secretary at the Royal Australasian
College of Physicians.
Bronwyn holds a Bachelor of Commerce and Graduate
Certificate in Commercial Law from Deakin University and a
Certificate in Governance Practice and a Graduate Diploma
of Applied Corporate Governance from the Governance
Institute of Australia.
Antonia Korsanos
Director
Appointed:
Ardent Leisure Group Limited – 18 September 2018
Age: 50
Antonia has more than 20 years’ senior executive
experience in financial and general management, strategy,
mergers and acquisitions, communications, technology
and risk management. Antonia was the Chief Financial
Officer (2009 to 2018) and Company Secretary (2011 to
2018) of Aristocrat Leisure Limited. Prior to working at
Aristocrat, Antonia held a number of finance and business
development positions at Kellogg’s Australia and New
Zealand, Goodman Fielder Limited and Coopers & Lybrand
in Sydney.
Antonia has a Bachelor of Economics (Accounting &
Finance) from Macquarie University and is a member of
Chartered Accountants Australia and New Zealand. Antonia
is also a member of Chief Executive Women and a non-
executive director of Crown Resorts Limited and Webjet
Limited.
Antonia is Chair of the Audit & Risk Committee and is a
member of the Remuneration & Nomination Committee.
Former listed directorships in the last three years:
None
Interest in shares:
Nil
Former Directors who held office within the year
Don Morris AO – former Director; resigned 31 May 2019; and
Roger Davis – former Director; resigned 17 August 2018.
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Ardent Leisure Group Limited | Annual Report 2019
11
Directors’ Report
10. Meetings of Directors
The attendance at meetings of Directors of the Group during the year is set out in the following table:
Full meetings
of Directors
E1
14
14
14
14
14
13
1
A2
14
12
13
14
14
12
-
Audit and Risk
A2
4
**
**
4
4
**
1
E1
4
**
**
4
4
**
1
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
Antonia Korsanos
Don Morris AO
Roger Davis
(1) Eligible to attend.
(2) Attended.
** Not a member of the relevant committee.
11. Remuneration report
Remuneration &
Nomination
Meetings of Committees
Safety & Risk
Review
E1
4
4
4
**
**
4
**
A2
4
3
2
**
**
3
**
A2
**
1
1
**
**
1
**
Dreamworld
Main Event
E1
5
5
5
**
**
4
**
A2
5
3
4
**
**
3
**
E1
4
**
4
4
**
**
**
A2
4
**
4
4
**
**
**
E1
**
1
1
**
**
1
**
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
Introduction from the Chair of the Remuneration &
Nomination Committee
s
t
n
e
m
e
t
a
t
S
The Directors of Ardent Leisure Group (the Group) are
pleased to present shareholders with the 2019
remuneration report. This report outlines the Group’s
approach to remuneration for its Directors and Executives.
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
The Remuneration & Nomination Committee (Committee),
on behalf of the Board, oversees the Group’s remuneration
framework ensuring that it aligns with the interests of
shareholders and reflects the Group’s commitment to
deliver market competitive remuneration to attract,
motivate and retain high quality directors and executives.
Following the departure of the CEO of Dreamworld in July
2018, John Osborne commenced in the role on 5
November 2018. Mr Osborne brings a wealth of business
transformation experience and leadership skills having held
CEO, senior executive and board positions in the leisure,
tourism and hospitality sectors in Australia for over 25
years. His previous roles include CEO of ASX-listed Lantern
Hotel Group, CEO of NextGen Health and Lifestyle Clubs,
CEO of Accor Vacation Club, CEO of Recreational Tourism
Group, CEO of Mingara Recreational Club and COO of
Burswood International Resort Casino (now Crown Perth).
During FY19, the Board reviewed the incentive arrangements
for its US and Australian employees. The one-time, cash-
based, long term incentive opportunity granted to Mr Chris
Morris and Mr John Osborne has now been extended to key
employees of Main Event and Dreamworld. The plan will
drive performance and ensure we can attract, motivate and
retain outstanding employees.
Upon the introduction of these new Long Term Incentive
Schemes (details of which are included below), the Board
modified the long term incentive arrangements granted to
Mr Chris Morris and Mr Osborne to make them consistent
with the plan applying to key employees.
12
Ardent Leisure Group Limited | Annual Report 2019
Turning to actual remuneration outcomes for FY19, these
reflect that it was another challenging year for the Group
with performance below expectation.
Although significant progress has been made by the
Theme Parks division since Mr Osborne’s commencement
on 5 November 2018, no short term incentive (STI) was paid
to him for FY19.
For Main Event, while their financial performance for FY19
has been mixed, strong improvements have been achieved
in respect of various safety enhancements across the
business, upward trends in guest satisfaction and positive
employee engagement. As a result, modest STI payments
were made to Chris Morris and Darin Harper.
The financial hurdles for the performance rights granted
under the existing equity LTI plan for FY15, FY16 and FY17
were not met and the rights subject to these hurdles lapsed.
The Board has been further changed during the year and
now comprises the appropriate combination of tenure,
experience, skills and diversity. Ms Antonia Korsanos
commenced on 1 July 2018 and two long-standing
Directors, Mr Roger Davis and Mr Don Morris stepped down
from the Board on 17 August 2018 and 31 May 2019,
respectively. The Directors believe that the current
composition of the Board is suitable for the Group’s size
and operations going forward.
The Committee remains committed to refining and
evolving the Group’s remuneration arrangements to drive
performance and align with shareholder interests and
general market practice. The Committee welcomes
feedback on our remuneration framework and I look
forward to your continued support at our Annual General
Meeting in November 2019.
David Haslingden
Chair, Remuneration & Nomination Committee
Directors’ Report
11.
Remuneration report (continued)
The remuneration report for the Group for the year ended 25 June 2019 is set out as follows:
Contents
(a) Who is covered by this report
(b) Remuneration governance
(c) Remuneration framework
(d) Remuneration outcomes for executives
(e) Service agreements of Key Management Personnel
(f) Non-Executive Director fees
(g) Additional statutory disclosures
Page No.
13
14
14
17
20
20
21
The information provided in the remuneration report has been audited as required by Section 308 (3C) of the Corporations Act
2001.
(a) Who is covered by this report
Key Management Personnel (KMP) are defined in AASB 124 Related Party Disclosures as those having authority and responsibility
for planning, directing and controlling the activities of the Group. For the year ended 25 June 2019, the KMP for the Group
comprise the following:
Position
Executive KMP
Name
President and CEO – Main Event
Group Chief Financial Officer
Chris Morris
Darin Harper
CEO – Theme Parks
John Osborne (commenced 5 November 2018)
Former CEO – Theme Parks
Craig Davidson (resigned 3 July 2018)
Non-Executive Directors
Chairman
Lead Independent director
Independent director
Independent director
Independent director
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
Antonia Korsanos (appointed 1 July 2018)
Former Independent director
Don Morris AO (resigned 31 May 2019)
Former Independent director
Roger Davis (resigned 17 August 2018)
Primary location of
employment
US-based
US-based
Australian-based
Australian-based
Australian-based
Australian-based
US-based
US-based
Australian-based
Australian-based
Australian-based
Ardent Leisure Group Limited | Annual Report 2019
13
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Directors’ Report
11.
Remuneration report (continued)
(i)
Changes to KMP effective after the end of the reporting period
There were no changes to KMP after the end of the reporting period.
(b)
Remuneration governance
The Remuneration & Nomination Committee’s purpose is to review, evaluate and make recommendations to the Board in
relation to, the following key remuneration areas:
Remuneration policies for remuneration programs appropriate to the Group;
The remuneration framework for Directors and executives;
Review of the performance of KMP to pre-determined criteria on an annual basis;
Recruitment, retention and termination policies and procedures for executives;
The appointment of any remuneration consultants providing advice to the Group on the scale and components of
remuneration packages of KMP; and
Reporting on executive remuneration.
During FY19, Ernst & Young provided immigration and tax advice for the US-based Directors services to the Group:
Ernst & Young did not provide any remuneration recommendations in relation to any of the above services.
(c)
Remuneration framework
(i)
Remuneration structure
The executive remuneration framework in place during the year ended 25 June 2019 has three components:
Annual base salary
KMP and executives receive a mix of cash
salary, employer superannuation contributions
(Australian employees only) and other non-
financial benefits
Total fixed remuneration (TFR) reflects the executive’s role, duties
and responsibilities, their level of performance and the complexities
of their role and divisions.
Base salaries are reviewed annually to ensure that pay is competitive
with the external market. No Executive KMP is entitled to a
guaranteed pay increase.
Short term incentive
One-year performance period award paid in
cash for individual and division performance
The STI is an annual performance bonus set against financial and
personal key performance indicators (KPIs).
Long term incentive
One-time cash award for long term
performance of division
The LTI for Executive KMP is a one-time cash reward linked to the
appreciation in the enterprise value of Main Event or Dreamworld,
over and above a threshold amount and is designed to drive
profitable business growth and deliver strong return on capital
invested. Vesting occurs on a pro-rata basis over a period of five
years.
During the period, there were no further grants of performance rights to Executive KMP under the Group’s legacy equity LTI Plan.
A number of Australian and US-based executives remain in the legacy equity LTI Plan. While certain prior grants were available
to vest during the period the financial hurdles were not met and those grants lapsed (see Section 11(d)(ii) below).
14
Ardent Leisure Group Limited | Annual Report 2019
Directors’ Report
11.
Remuneration report (continued)
(ii)
Remuneration mix – FY19
Executive KMP
Chris Morris
President and CEO –
Main Event
Annual base
salary
US$600,000
STI
LTI opportunity
Target 100% of TFR
Stretch 200% of TFR
Weighted:
100% financial KPIs
The LTI opportunity for Executive KMP is a one-time
grant, subject to the achievement of appreciation in
the Enterprise Value of Main Event or Dreamworld
(as applicable to the Executive KMP) over the
threshold amount with payment on the occurrence
of a future realisation event. Further details on the
LTI opportunity can be found in Section 12(c)(iv).
LTI award percentages are as follows:
Chris Morris
Darin Harper
John Osborne
2.0%
0.75%
2.0%
Mr Harper remains a participant in the Group equity
LTIP Plan however no further grants have been made
to Mr Harper under this plan since 2017.
Darin Harper Group
CFO
John Osborne
CEO Theme Parks
US$420,000
Cash
As part of his
base salary
above, Mr Harper
receives a
payment of
US$10,000 per
month for
performing the
role of Group CFO
Target 50% of TFR
Stretch 100% of TFR
Weighted:
100% financial KPIs
Equity
Mr Harper was
granted DSTI rights
in 2017 prior to him
becoming KMP. See
Section 11(g)(vii) for
further details.
$500,000
Target 100% of TFR
Weighted:
70% financial KPIs
30% personal KPIs
No changes were made to Executive KMP base salary for FY19.
Amendments to Main Event and Theme Parks CEO arrangements
Upon the finalisation of the LTI Plan to key employees of Main Event and Dreamworld, the Board reviewed the long term
incentive arrangements agreed with Mr Morris and Mr Osborne upon their commencement and have adjusted the threshold
growth hurdle rate to 8%, from 11.5%. The revised rate takes into consideration the change in capital structure of the Group
and is consistent with the hurdle rate for all other participants in the plan.
The deferral component of Mr Osborne’s STI opportunity has also been removed.
Sign-on payment to Mr Chris Morris
As disclosed to shareholders upon his commencement, Mr Morris is entitled to a sign-on payment of US$450,000 in
consideration of incentives foregone in his previous role. The payment is split into two tranches: the first tranche of
US$225,000 was payable on 30 June 2018 and the second tranche of US$225,000 was payable on 30 June 2019.
Ardent Leisure Group Limited | Annual Report 2019
15
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Directors’ Report
11.
Remuneration report (continued)
Short-term incentive
Who can participate?
When is the STI paid?
What performance measures
are used?
Executive KMP are able to participate in the STI; however, participation and payment of
any STI remain at the Board’s discretion.
If performance is sufficient, STI awards are payable in cash following the release of the
Group’s audited annual financial results.
Key performance indicators are split into financial and personal measure categories. The
actual split for each participant may vary and is generally more weighted to the financial
KPI.
Financial KPIs are linked to earnings and revenue targets including, but not limited to,
EBITDA and constant centre sales (Main Event).
Personal KPIs are not financial in nature and are set to support execution of
improvements and initiatives in such functions as health and safety, employee and
guest engagement, compliance, business development and strategic initiatives.
(iv)
Changes to long term incentive arrangements
New Long Term Incentive Plan (LTI Plan)
The material terms of the long term incentive arrangements are set out in plan document and apply to all grants made, including
those to Mr Morris and Mr Osborne.
Details in relation to the newly introduced LTI Plan are outlined below:
What is the LTI Plan?
What is the Threshold Hurdle?
What is the Hurdle Rate?
How does the LTI Plan drive
performance?
Who can participate in the LTI Plan?
The LTI Plan is an incentive plan designed to attract, motivate and retain key
employees. It provides employees with a one-time grant to earn a cash incentive
based on the appreciation in the Enterprise Value of Main Event or Dreamworld, as the
case may be, above the Threshold Hurdle.
The Threshold Hurdle is the cumulative and annually compounded application of the
Hurdle Rate to a grant date valuation of Main Event and Dreamworld.
8.0% per annum.
The plan is designed to align key employees’ incentive structure with shareholders by
encouraging and promoting desired behaviours that focus on creating sustainable
value over the long term.
Employees of Main Event and Dreamworld who are determined to be instrumental in
driving the long term growth of the business are eligible for participate at the discretion
of management and the Board. Each employee is granted an LTI award percentage with
a total LTI pool cap of 7.5% and 6.0% for Main Event and Dreamworld respectively.
How is the LTI Plan delivered?
The LTI award is delivered in cash.
What are the vesting conditions?
What is a Realisation Event?
The vested entitlement accumulates over a period of five years, in four annual
increments of 25% commencing from the second anniversary of grant date. LTI awards
will immediately vest in full upon the occurrence of a Realisation Event.
A Realisation Event broadly refers to the earlier of:
(a) an acquisition of more than 75% of Main Event or Dreamworld as the case may
be; or
(b) (only in the case of the Dreamworld plan) the IPO of Dreamworld; or
(c)
(only in the case of the Main Event plan) the seventh anniversary of LTI award grant
date.
16
Ardent Leisure Group Limited | Annual Report 2019
Directors’ Report
11.
Remuneration report (continued)
What are the payment conditions?
What happens if an employee leaves?
The LTI award should be paid out as follows:
If the participant remains employed, vested portion of the LTI award will be paid out
upon a change of control, an IPO (Dreamworld) or seventh anniversary of the LTI award
grant date (Main Event).
In the event of a participant’s employment being terminated as a result of an
Approved Separation, the participant shall be eligible to receive a pro-rata portion of
the LTI award representing the amount that has vested at the time of separation. An
‘Approved Separation’ means a participant’s termination of employment with Main
Event for any reason other than for cause. A resignation by an employee is not an
Approved Separation. In the case of the Dreamworld plan, if an employee leaves and
the Realisation Event occurs more than two years after an Approved Separation, all
awards will lapse without payment.
(d)
Remuneration outcomes for executives
This section sets out the actual remuneration outcomes realised by Executive KMP and the statutory remuneration disclosures
for FY19 and FY18.
(i)
STI outcomes in respect of FY19 performance
In respect of FY19 and FY18 performance, the percentage of STI that was awarded to the executives and the percentage that
was forfeited because the executives did not meet the performance criteria are set out below. Actual payments are made to
individuals following the release of audited results.
Name
Chris Morris
Darin Harper
John Osborne
Financial year
FY19
FY18
FY19
FY18
FY19
FY18
STI awarded
28%
0%
28%
0%
0%
n/a
STI forfeited
72%
0%
72%
0%
100%
n/a
STI outcome
US$167,700
-
US$58,695
-
-
n/a
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
Amounts included in the table are different to the cash bonuses presented in Section 11(d)(v) below, which reflect cash amounts
received in the year in respect of prior years’ performance.
(ii)
Legacy equity LTI Plan
As stated above, performance rights granted under the Group’s previous equity LTI plan that are due to vest in August 2019 have
been tested against their gateway and performance hurdles.
s
e
t
o
N
The gateway and performance hurdles for the tranches issued in FY15, FY16 and FY17 were not achieved and therefore none of
the LTI performance rights have vested.
s
e
c
i
d
n
e
p
p
A
Ardent Leisure Group Limited | Annual Report 2019
17
Directors’ Report
11.
(iii)
Remuneration report (continued)
Severance payments Executive KMP
Payment
Craig Davidson
Former CEO – Theme Parks
Mr Davidson received a payment of $177,000 on his departure from the Group. His
remaining unvested Deferred Short Term Incentive Plan (DSTI) performance rights
subsequently vested on 24 August 2018 and he continues to participate in the
Group’s equity LTIP in respect of unvested performance rights (which are not
subject to a tenure requirement) and therefore outstanding performance rights
remain “on foot” and will only vest subject to performance achievement against pre-
determined vesting conditions.
(iv)
Actual remuneration outcomes
The table below sets out the total realised pay (take home pay) in respect of the years ended 25 June 2019 and 26 June 2018.
The deferred equity and LTIP vested elements of realised pay relate to both the individual and the Group’s performance up to
25 June 2019. The information below is different to the information in Section 11(d)(v) below, which includes the accounting
value of equity expensed in the year, rather than the actual benefit received as shown in the table below:
STI on an accrued basis
Name
Chris Morris(2)
Darin Harper
John Osborne(3)
Financial
year
FY19
FY18
FY19
FY18
FY19
FY18
Base salary
(incl super)
US$600,000
US$161,538
US$439,761
US$20,961
$331,412
n/a
Cash
US$167,700
-
US$58,695
-
-
n/a
Deferred
equity
vested(1)
-
-
US$48,204
US$100,956
-
n/a
LTIP vested (1)
-
-
-
-
-
n/a
Termination
payment
-
-
-
-
-
n/a
Total realised
pay in respect of
the financial year
US$767,700
US$161,538
US$546,660
US$121,917
US$331,412
n/a
(1) The vesting of deferred equity and LTIP performance rights into fully paid shares/securities reflects previous performance of executives and of the Group up
to 25 June 2019. Shares to be issued in respect of the financial year are valued at $1.00 per share, representing the closing price at 25 June 2019 (2018: $1.97
per security, representing the closing price at 26 June 2018). Amounts expressed in US dollars are converted from Australian dollars at an exchange rate of
0.6958 representing the closing rate at 25 June 2019 (2018: 0.7416, representing the closing rate at 26 June 2018).
(2) Commenced employment and became KMP on 26 March 2018.
(3) Commenced employment and became KMP on 5 November 2018.
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
18
Ardent Leisure Group Limited | Annual Report 2019
Directors’ Report
11.
Remuneration report (continued)
(v)
Details of remuneration – Executive Key Management Personnel
Details of the remuneration of Executive KMP of the Group for FY19 are set out in the table below. The table sets out the total
cash benefits paid to the executives in the relevant period and, under the heading “Equity-based payments”, shows a
component of the fair value of the performance rights. The fair value of the performance rights is recognised over the vesting
period as an employee benefit expense.
Short term benefits
Post-
employ-
ment
benefits
Other
long
term
benefits
Salary
Cash
bonus
Annual
leave (1)
Super-
annuation
Total
remuneration
excl. equity
backed
payments
Termin-
ation
payment
Equity-
based
payments
Total
remuner-
ation
$
$
$
$
$
$
$
$
Equity-
based
payment
% of
total
-
-
12.11%
85.59%
-
n/a
-
4.47%
n/a
-
n/a
29.77%
-
-
-
-
15,399
n/a
5,133
20,049
n/a
-
-
-
-
-
-
n/a
88,067
177,000
n/a
-
1,151,583
219,772
777,002
28,169
353,877
n/a
94,839
644,695
n/a
846,700
- 1,151,583
219,772
-
884,093
107,091
167,304
195,473
353,877
-
n/a
n/a
47,360
(47,479)
674,852
30,157
n/a
n/a
846,700
-
n/a
10,024
n/a
300,000
n/a
628,689
n/a
266,501
n/a
895,190
n/a
-
n/a
731,291
n/a
n/a
731,291 (240,976)
n/a
490,315
n/a
(49.15%)
n/a
-
n/a
204,988
n/a
(35,431)
n/a
(22,823)
n/a
5,012
n/a
15,037
n/a
246,998
n/a
17,958
n/a
n/a
239,264 (257,880)
n/a
(76,251)
n/a
412,175
n/a
n/a
(18,616) 1385.29%
n/a
(22.70%)
n/a
335,924
n/a
-
n/a
(58,487)
n/a
-
n/a
379,761
n/a
n/a
669,652 (280,347)
n/a
389,305
n/a
(72.01%)
313,912
-
161,058
-
-
n/a
-
-
n/a
-
n/a
-
n/a
-
573
11,378
2,405
1,128
22,465
n/a
1,639
82,887
n/a
-
n/a
(4,038)
n/a
-
Chris Morris (2) (3)
CEO – Main Event
Darin Harper (2)(4)
Group Chief Financial Officer
John Osborne (5)
CEO – Theme Parks
Craig Davidson (6)
Former CEO – Theme Parks
Geoff Richardson
Former Acting Chief Executive
and Chief Financial Officer
Simon Kelly
Former Chief Executive Officer
and Managing Director
Deborah Thomas
Former Chief Executive Officer
and Managing Director
Richard Johnson
Former Chief Financial Officer
Nicole Noye
Former CEO – Bowling &
Entertainment
Charlie Keegan
Former CEO – Main Event
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
837,098
208,394
613,539
27,041
316,013
n/a
-
364,759
n/a
846,700
n/a
322,703
n/a
-
n/a
22,685
n/a
197,015
n/a
348,378
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
FY19 1,766,650 474,970
27,082
FY18 2,337,675 204,988 (25,386)
20,532
88,067
50,122 1,853,008
2,377,301
59,612 2,436,913
4,420,407 (391,492) 4,028,915
2.45%
(9.72%)
(1) Annual leave amounts represent the increase/(decrease) in the liability for accumulated annual leave during the year.
(2) Remuneration is converted from US dollars to Australian dollars at the average exchange rate of 0.7168 (2018: 0.7752) and includes both cash settled and
equity settled awards.
(3) Cash bonus includes a US$225,000 initial sign-on bonus. A further US$225,000 was paid on 30 June 2019.
(4) Cash bonus received in the year in respect of FY18 performance of Main Event prior to Mr Harper’s appointment as Group Chief Financial Officer and him
becoming KMP of the Group.
(5) Commenced employment and became KMP on 5 November 2018.
(6) Termination payment amounts comprise a retention payment of $100,000 and payment on exit of the Group of $165,067, of which an estimate of $177,000
was disclosed as part of FY18 remuneration and $88,067 has been disclosed as part of FY19 remuneration.
Cash bonus payments included in the table above reflects amounts received in the current year for prior performance periods
and do not include bonus payments in respect of FY19 performance which are included in Section 11(d)(i) and 11(d)(iv) above.
Equity-based payments included in the table above reflects the amounts in the Income Statements of the Group. For
performance rights issued to executives, the amount is based on the fair value of the equity instruments at the date of the grant
rather than at vesting or reporting date for those instruments not yet vested. If the fair value recorded in the Income Statement
was based on the movement in the fair value of the instruments between reporting dates, the amount included in executive
compensation would be decreased by $59,868 to ($256) (2018: increased by $673,084 to $281,592).
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Ardent Leisure Group Limited | Annual Report 2019
19
Directors’ Report
11.
Remuneration report (continued)
(e)
Service agreements of Key Management Personnel
Remuneration and other terms of employment for KMP are formalised in service agreements. The major provisions of the
agreements relating to remuneration are set out below:
Executive
Term
Termination
Chris Morris
President and CEO –
Main Event
No fixed term.
Employment shall continue with the Group unless the executive gives
the Group 90 days’ notice in writing. The Group may terminate Mr Morris’
employment at any time, subject to a requirement to provide 30 days’
notice where the Group intends to terminate Mr Morris’ employment for
certain ‘cause’ reasons.
In certain circumstances, on termination of employment, Mr Morris is
entitled to continued payment of total fixed remuneration for 12 months
plus any owed but unpaid incentive amounts.
Darin Harper
Group Chief Financial Officer
No fixed term.
Employment shall continue as Group Chief Financial Officer with the
Group unless either party provides notice in writing.
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
John Osborne
CEO – Theme Parks
No fixed term.
s
t
n
e
m
e
t
a
t
S
Employment shall continue with the Group unless the executive gives
the Group 90 days’ notice in writing. The Group may terminate Mr
Osborne’s employment at any time, subject to a requirement to
provide 30 days’ notice where the Group intends to terminate Mr
Osborne’s employment for certain ‘cause’ reasons.
In certain circumstances, on termination of employment, Mr Osborne is
entitled to continued payment of total fixed remuneration for 12 months
plus any owed but unpaid incentive amounts.
Other than as set out above, there are no contracted termination benefits payable to any KMP.
(f)
Non-Executive Director fees
Fees paid to Non-Executive Directors reflect the demands which are made on, and the responsibilities of, the Directors. Non-
Executive Directors’ fees are reviewed annually by the Board and the Remuneration & Nomination Committee.
Non-Executive Directors are paid solely by the way of Directors’ fees and Non-Executive Directors do not participate in equity
nor cash-based incentive schemes. Non-Executive Directors bring a depth of experience and knowledge to their roles and are a
key component in the effective operation of the Board. The maximum total aggregate level of Directors’ fees payable by the
Group is $1,200,000 per annum as set by investors at the 30 October 2014 general meeting. This aggregate level has not changed
following the destapling and corporatisation of the Group and there is no proposal to increase the aggregate fee cap in FY20.
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Board fees payable to Non-Executive Directors are as follows:
Position
Board Chair
Other Non-Executive Director
- Australian-based
Audit and Risk Committee
Other Committee
Dreamworld Committee
Main Event Committee
- US-based
- Chair
- Member
- Chair
- Member
- Chair
- Member
- Chair
- Member
20
Ardent Leisure Group Limited | Annual Report 2019
Non-Executive
Director fees
$205,000
$120,000
$136,000
$20,000
$15,000
$12,500
$7,500
$12,500
$7,500
$12,500
$7,500
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
Directors’ Report
11.
Remuneration report (continued)
Details of the actual fees delivered to Non-Executive Directors of the Company for FY19 and FY18 are set out below:
Gary Weiss AM(1)
David Haslingden
Randy Garfield
Brad Richmond
Antonia Korsanos
Don Morris AO
Roger Davis
Salary
$
Superannuation
$
192,161
-
134,703
117,670
157,886
136,034
167,361
131,780
132,718
n/a
104,725
114,023
17,570
122,122
907,124
621,629
18,255
-
12,797
11,622
2,788
2,391
1,465
1,977
12,608
n/a
9,949
12,352
1,669
12,045
59,531
40,387
Total
$
210,416
-
147,500
129,292
160,674
138,425
168,826
133,757
145,326
n/a
114,674
126,375
19,239
134,167
966,655
662,016
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
FY18
(1) After joining the Group in September 2017, Dr Weiss did not receive any fees for being a Director, Chairman or member of any Committee for the first 12
months of his tenure.
FY18 amounts do not include fees paid to Directors who were not KMP in the current year.
Additional statutory disclosures
Directors’ interests in shares/securities
(2)
(g)
(i)
Changes to Directors’ interests in shares/securities during the period are set out below:
Gary Weiss AM
David Haslingden
Brad Richmond
Don Morris AO
Roger Davis
(ii)
Minimum share holdings
Opening
balance
53,942,531
160,000
48,450
13,950
200,658
54,365,589
On joining
the Group
-
-
-
-
-
-
Acquired
16,607,295
171,673
261,550
-
-
17,040,518
Disposed
-
-
-
-
-
-
Closing
On leaving
balance
the Group
70,549,826
-
331,673
-
310,000
-
-
(13,950)
(200,658)
-
(214,608) 71,191,499
Non-Executive Directors are expected to hold the minimum value of shareholdings within four years of appointment and
thereafter increase holdings over their tenure; specifically, the minimum values are equivalent to the Chairman base fee and
Non-Executive Director base fee.
(iii)
Other KMP interests in shares/securities
Changes to the interests of other KMP in shares/securities during the period are set out below:
Darin Harper
Craig Davidson
Acquired
under the
Group's
equity plans
69,279
25,367
94,646
Opening
balance
-
72,708
72,708
Disposed
-
-
-
On leaving
the Group
-
(98,075)
(98,075)
Closing
balance
69,279
-
69,279
Ardent Leisure Group Limited | Annual Report 2019
21
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Directors’ Report
11.
(iv)
Remuneration report (continued)
Valuation inputs
For performance rights outstanding at 25 June 2019, the tables below show the fair value of the performance rights on each
grant date as well as the factors used to value the performance rights at the grant date. Under AASB 2 Share Based Payment, this
valuation is used to value the performance rights granted to employees at 25 June 2019:
DSTI grant
Grant date
Vesting date – year 1
Vesting date – year 2
Average risk-free rate
Expected price volatility
Expected distribution yield
Security/share price at grant date
Valuation per performance right on issue
LTIP grant
Grant date
Vesting date – year 2
Vesting date – year 3
Vesting date – year 4
Average risk-free rate
Expected price volatility
Expected distribution yield
Security price at grant date
Valuation per performance right on issue
US employees
Australian employees
2017
29 September 2017
24 August 2018
31 August 2019
2.00% per annum
42.0% per annum
1.6% per annum
$1.82
$1.78
2018
24 June 2019
31 August 2019
31 August 2020
1.50% per annum
32.0% per annum
2.5% per annum
$1.03
$0.98
2015
15 December 2015
5 September 2017
24 August 2018
31 August 2019
2.10% per annum
38.3% per annum
5.8% per annum
$2.17
2016
2017
23 August 2016 29 September 2017
31 August 2019
24 August 2018
31 August 2020
31 August 2019
31 August 2021
31 August 2020
2.00% per annum
1.40% per annum
42.0% per annum
40.0% per annum
1.6% per annum
5.0% per annum
$2.50
$2.50
$1.06
$1.06
$1.51
$1.51
$0.65
$0.19
Grants of performance rights are made annually with the grant date being the date of the issue of the offer letters to employees.
Although the grant date may vary from year to year, the testing period (subject to any hurdles) remains constant with the vesting
date being 24 hours immediately following the announcement of the Group’s full year financial results.
(v)
Details of equity grant movements
The table below sets out the number of performance rights that were granted, lapsed and vested during the financial year and
that are yet to vest:
Year
granted Tranche
Financial years
in which
performance
rights may vest
Value of
performance
rights at
grant
Year Number
$
Value of
performance
rights at
lapse
Number
lapsed
Number
vested
Value of
performance
rights at
vesting
Maximum
value yet
to vest
Current Executive
Equity settled
Darin Harper
LTIP
2017
DSTI
2017
Total
T1
T2
T3
T1
T2
2020
2021
2022
2019
2020
35,677
35,677
35,678
69,279
69,279
245,590
Former Executives
Craig Davidson LTIP
2016
2014
2015
11,368
16,741
16,741
15,313
15,314
15,314
22,971
36,948
36,949
36,949
25,367
249,975
Ardent Leisure Group Limited | Annual Report 2019
2019
2019
2020
2019
2020
2021
2020
2020
2021
2022
2019
T3
T2
T3
T1
T2
T3
T4
T1
T2
T3
T2
DSTI
Total
2016
2017
22
20,925
26,458
30,308
124,065
121,896
323,652
14,973
18,738
16,776
23,141
21,178
15,798
49,374
-
9,163
15,701
57,319
242,161
-
-
-
-
-
-
11,368
16,741
-
15,313
-
-
22,971
-
-
-
-
66,393
$
-
-
-
-
-
-
21,088
31,055
-
28,406
-
-
45,827
-
-
-
-
126,376
-
-
-
69,279
-
69,279
-
-
-
-
-
-
-
-
-
-
25,367
25,367
$
$
-
-
-
128,513
-
128,513
20,925
26,458
30,308
-
121,896
199,587
-
-
-
-
-
-
-
-
-
-
47,056
47,056
-
-
16,776
-
21,178
15,798
-
-
9,163
15,701
-
78,616
Directors’ Report
11.
Remuneration report (continued)
Year
granted Tranche
Financial years
in which
performance
rights may vest
Value of
performance
rights at
grant
Number
lapsed
2014
2015
2016
2014
2015
2016
2016
T3
T2
T3
T1
T2
T3
T4
T3
T2
T1
T2
Year Number
33,804
2019
65,994
2019
65,994
2020
32,719
2019
32,719
2020
32,719
2021
49,080
2020
313,029
27,961
62,056
41,710
42,724
174,451
983,045
2019
2019
2019
2019
$
33,804
44,523
65,994
73,867
-
66,133
32,719
49,445
45,247
-
-
33,753
105,493
49,080
418,461 181,597
27,961
62,056
41,710
-
265,857 131,727
1,250,131 379,717
36,827
69,459
63,032
96,539
Value of
performance
rights at
lapse
$
62,706
122,419
-
60,694
-
-
104,540
350,359
51,868
115,114
77,372
-
244,354
721,089
Number
vested
-
-
-
-
-
-
-
-
-
-
-
42,724
42,724
137,370
Value of
performance
rights at
vesting
Maximum
value yet
to vest
$
-
-
-
-
-
-
-
-
-
-
-
79,253
79,253
254,822
$
-
-
66,133
-
45,247
33,753
-
145,133
-
-
-
-
-
423,336
Richard
Johnson
LTIP
Total
Charlie Keegan LTIP
DSTI
Total
Total
(vi)
LTIP performance rights
The number of performance rights on issue and granted to the Group’s executive KMP under the LTIP is set out below:
Opening
balance
Granted as
compensation
Exercised
Lapsed
Closing
balance
Vested and
exercisable
Chris Morris
Darin Harper
John Osborne
Craig Davidson
Richard Johnson
Charlie Keegan
Equity settled
(vii) DSTI rights
-
107,032
-
224,608
313,029
131,727
776,396
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(66,393)
(181,597)
(131,727)
(379,717)
-
107,032
-
158,215
131,432
-
396,679
-
-
-
-
-
-
-
The number of rights on issue and granted to the Group’s executive KMP under the DSTI is set out below:
Opening
balance
Granted as
compensation
Exercised
Forfeited
Closing
balance
Vested and
exercisable
Chris Morris
Darin Harper(1)
John Osborne
Craig Davidson
Charlie Keegan
Equity settled
-
138,558
-
25,367
42,724
206,649
-
-
-
-
-
-
-
(69,279)
-
(25,367)
(42,724)
(137,370)
-
-
-
-
-
-
-
69,279
-
-
-
69,279
-
-
-
-
-
-
(1) Opening balance of DSTI rights were granted to Darin Harper prior to him becoming KMP on 4 June 2018.
Unvested
-
107,032
-
158,215
131,432
-
396,679
Unvested
-
69,279
-
-
-
69,279
(viii) Loans and other transactions with KMP
There were no loans made to KMP during the financial year, as disclosed in Note 34(e) to the financial statements. Refer to Note
34(f) to the financial statements for details of other transactions with KMP during the financial year.
12. Non-audit services
The Group may decide to employ the auditor on
assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the
Group are important.
Details of the amounts paid to the auditor (Ernst & Young)
for audit and non-audit services provided during the year
are disclosed in Note 32 to the financial statements.
The Directors have considered the position and, in
accordance with the recommendation received from the
Audit and Risk Committee, are satisfied that the provision
of the non-audit services is compatible with the general
standard of independence for auditors imposed by the
Corporations Act 2001.
Ardent Leisure Group Limited | Annual Report 2019
23
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Directors’ Report
12.
Non-audit services (continued)
The Directors are satisfied that the provision of non-audit
services by the auditor, as set out in Note 32 to the financial
statements, did not compromise the auditor independence
requirements of the Corporations Act 2001 for the
following reasons:
All non-audit services have been reviewed by the
Audit and Risk Committee to ensure that they do not
impact the integrity and objectivity of the auditor; and
None of the services undermines the general principles
relating to auditor independence as set out in
Accounting Professional and Ethical Standards Board
APES 110 Code of Ethics for Professional Accountants.
13. Auditor’s independence declaration
A copy of the auditor’s independence declaration as
required under Section 307C of the Corporations Act 2001
is set out on page 26.
14.
Events occurring after reporting date
Since the end of the financial year, the Directors of the
Company are not aware of any matters or circumstances
not otherwise dealt with in this report or the financial
report that has significantly affected or may significantly
affect the operations of the Group, the results of those
operations or the state of affairs of the Group in financial
years subsequent to the year ended 25 June 2019.
15.
Likely developments and expected results of
operations
The financial statements have been prepared on the basis
of the current known market conditions. The extent to
which any potential deterioration in either the capital or
physical property markets may have on the future results of
the Group is unknown. Such results could include the
potential to influence property market valuations, the
ability of borrowers, including the Group, to raise or
refinance debt, and the cost of such debt and the ability to
raise equity.
At the date of this report, and to the best of the Directors’
knowledge and belief, there are no other anticipated
changes in the operations of the Group which would have
a material impact on the future results of the Group.
16.
Indemnification and insurance of officers and
auditor
Under the Company’s Constitution, the Company
indemnifies:
All past and present officers of the Company, and
persons concerned in or taking part in the management
of the Company, against all liabilities incurred by them in
their respective capacities in successfully defending
proceedings against them; and
24
Ardent Leisure Group Limited | Annual Report 2019
All past and present officers of the Company against
liabilities incurred by them, in their respective capacities
as an officer of the Company, to other persons (other
than the Company or its related parties), unless the
liability arises out of conduct involving a lack of good
faith.
During the reporting period, the Company had in place a
policy of insurance covering the Directors and officers
against liabilities arising as a result of work performed in
their capacity as Directors and officers of the Company.
Disclosure of the premiums paid for the insurance policy is
prohibited under the terms of the insurance policy.
17.
Environmental regulations
During the financial year, the Group’s major businesses
were subject to environmental legislation in respect of their
operating activities as set out below:
(a)
Theme Parks – Australia
The Dreamworld and WhiteWater World theme parks are
subject to various legislative requirements in respect of
environmental impacts of their operating activities. The
Environmental Protection Act 1994 (Qld) regulates all
activities where a contaminant may be released into the
environment and/or there is a potential for environmental
harm or nuisance. Dreamworld holds licences or approvals
for the operation of a helipad, motor vehicle workshop and
train-shed and the storage and use of
flammable/combustible goods. During the year,
Dreamworld and WhiteWater World complied with all
requirements of the Act.
Dreamworld’s noise conservation program ensures that
noise emissions emanating from park activities do not
contravene State regulations or adversely impact
surrounding neighbours. Local government regulations for
the staging of night time events and functions were
complied with at all times.
Dreamworld’s Life Sciences department is subject to the
Biosecurity Act 2015 (Cth) and maintains an exhibition
permit under the Exhibited Animals Act 2015 (Qld). All
licences and permits remain current and Dreamworld has
complied fully with the requirements of each.
There are two water licences for the
Dreamworld/WhiteWater World property. These relate to
water conservation and irrigation. There have been no
issues or events of non-compliance recorded by
management or the regulatory authorities regarding water
use.
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s Independence Declaration
As lead auditor for the audit of Ardent Leisure Group Limited for the financial year ended 25 June
2019, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Ardent Leisure Group Limited, and the entities it controlled during the
financial year.
Ernst & Young
John Robinson
Partner
22 August 2019
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Income Statement
for the year ended 25 June 2019
Income Statement
Income
Revenue from operating activities
Net gain from derivative financial instruments
Interest income
Other income
Total income
Expenses
Purchases of finished goods
Salary and employee benefits
Borrowing costs
Property expenses
Depreciation and amortisation
Loss on disposal of assets
Loss on sale and leaseback of Main Event centre
Advertising and promotions
Repairs and maintenance
Pre-opening expenses
Impairment of goodwill
Impairment of other intangible assets
Impairment of property, plant and equipment
Valuation loss - property, plant and equipment
Valuation loss - investment held at fair value
Dreamworld incident costs
Net loss from derivative financial instruments
Loss on disposal of damaged assets
Other expenses
Total expenses
Loss before tax expense/(benefit)
Income tax expense/(benefit)
Loss from continuing operations
(Loss)/profit from discontinued operations
Loss for the year
Attributable to:
Ordinary share/security holders
Note
3
5
4
6(b)
31(b)
2019
$’000
483,301
-
339
9,199
492,839
67,086
198,552
8,262
62,792
52,356
2,070
-
24,137
30,478
2,791
-
-
17,567
-
-
12,486
1,376
-
60,858
540,811
(47,972)
12,293
(60,265)
(612)
(60,877)
2018
$’000
422,393
881
191
13,501
436,966
60,253
176,824
10,339
49,465
43,033
507
706
20,004
25,661
5,900
3,583
1,188
39,287
75,031
390
10,435
-
9,224
53,472
585,302
(148,336)
(29,522)
(118,814)
28,124
(90,690)
(60,877)
(90,690)
The above Income Statement should be read in conjunction with the accompanying notes.
Total basic losses per share/security (cents)
Basic losses per share/security (cents) from continuing operations
Total diluted losses per share/security (cents)
Diluted losses per share/security (cents) from continuing operations
8
8
8
8
(12.74)
(12.61)
(12.74)
(12.61)
(19.32)
(25.31)
(19.33)
(25.31)
Ardent Leisure Group Limited | Annual Report 2019
27
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Note
2019
$’000
2018
$’000
(60,877)
(90,690)
19
19
19
19
-
17,501
-
-
17,501
(43,376)
835
13,520
68
(722)
13,701
(76,989)
(43,376)
(43,376)
(76,989)
(76,989)
(42,764)
(612)
(43,376)
(105,113)
28,124
(76,989)
Total comprehensive loss for the year, net of tax attributable to share/security
holders, arises from:
Continuing operations
Discontinued operations
31(b)
Total comprehensive loss for the year, net of tax
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Statement of Comprehensive Income
for the year ended 25 June 2019
Statement of Comprehensive Income
Loss for the year
Other comprehensive income/(loss) for the year
Items that may be reclassified to profit and loss:
Cash flow hedges
Foreign exchange translation difference
Income tax benefit relating to these items
Items that will not be reclassified to profit and loss:
Loss on revaluation of property, plant and equipment
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year, net of tax
Attributable to:
Ordinary share/security holders
Total comprehensive loss for the year, net of tax
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
28
Ardent Leisure Group Limited | Annual Report 2019
Balance Sheet
as at 25 June 2019
Balance Sheet
Current assets
Cash and cash equivalents
Receivables
Derivative financial instruments
Inventories
Construction in progress inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Investment held at fair value
Derivative financial instruments
Livestock
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Payables
Construction in progress deposits
Interest bearing liabilities
Current tax liabilities
Provisions
Other
Total current liabilities
Non-current liabilities
Payables
Derivative financial instruments
Interest bearing liabilities
Provisions
Non-current tax liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Other equity
Reserves
Accumulated losses
Total equity
Note
7(c)
10
22
11
12(a)
13
15
28
22
16
6(g)
14
12(b)
21
29(b)
14
22
21
29(b)
6(i)
17
18
19
20
2019
$’000
2018
$’000
92,332
12,524
13
7,782
578
8,427
121,656
478,641
2,811
177
220
78,973
22,845
583,667
705,323
69,195
-
1,796
6,415
1,512
4,294
83,212
37,603
505
167,633
5,962
10,000
15,306
237,009
320,221
385,102
16,548
13,102
748
8,180
772
9,625
48,975
455,668
2,811
-
236
70,275
20,766
549,756
598,731
70,295
-
-
318
1,695
3,264
75,572
31,422
28
27,849
2,651
-
17,091
79,041
154,613
444,118
777,124
(148)
(92,039)
(299,835)
385,102
666,731
(1,405)
(14,246)
(206,962)
444,118
The above Balance Sheet should be read in conjunction with the accompanying notes.
Ardent Leisure Group Limited | Annual Report 2019
29
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Statement of Changes in Equity
for the year ended 25 June 2019
Statement of Changes in Equity
Contributed
Note
equity Other equity
Reserves
Accumulated
losses
$’000
$’000
$’000
$’000
Total
equity
$’000
Total equity at 1 July 2017
662,450
(1,662)
(26,861)
(102,205)
531,722
Loss for the year
Other comprehensive income for the year
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as owners:
Equity-based payments
Contributions of equity, net of issue costs
Equity-based payments - securities issued
Issuance of treasury shares
Distributions paid and payable
Total equity at 26 June 2018
Impact of change in accounting standard
Total restated equity at 27 June 2018
Loss for the year
Other comprehensive income for the year
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as owners:
Equity-based payments
Contributions of equity, net of issue costs
Issuance of treasury shares
Distributions paid and payable
Impact of corporate restructure
Total equity at 25 June 2019
19
17
17
18
20
20
19
17
18
20
17, 19
-
-
-
-
-
-
-
13,701
13,701
(90,690)
-
(90,690)
(90,690)
13,701
(76,989)
-
2,968
1,313
-
-
666,731
-
666,731
-
-
-
-
16,302
-
-
94,091
777,124
-
-
-
257
-
(1,405)
-
(1,405)
-
-
-
-
-
1,257
-
-
(148)
(1,086)
-
-
-
-
(14,246)
-
-
-
-
(14,067)
(206,962)
(1,086)
2,968
1,313
257
(14,067)
444,118
-
(14,246)
-
17,501
17,501
(1,203)
-
-
-
(94,091)
(1,401)
(208,363)
(60,877)
-
(60,877)
(1,401)
442,717
(60,877)
17,501
(43,376)
-
-
-
(30,595)
-
(1,203)
16,302
1,257
(30,595)
-
(92,039)
(299,835)
385,102
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
30
Ardent Leisure Group Limited | Annual Report 2019
Statement of Cash Flows
for the year ended 25 June 2019
Statement of Cash Flows
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Property expenses paid
Payments for construction in progress inventories
Interest received
Deposits received for construction in progress
US withholding tax paid
Insurance recoveries
Income tax paid
Net cash flows from operating activities
Cash flows from investing activities
Payments for property, plant and equipment and other intangible assets
Proceeds from sale of plant and equipment
Proceeds from sale of land and buildings
Proceeds from the sale of Bowling & Entertainment, net of cash disposed
Proceeds from the sale of Marinas, net of cash disposed
Insurance recoveries relating to damaged assets
Net cash flows (used in)/from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayments of borrowings
Borrowing costs
Costs of issue of shares/securities
Distributions paid to share/security holders
Net cash flows from/(used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
Note
2019
$’000
2018
$’000
7(a)
537,785
(448,047)
(59,729)
(11,345)
339
7,154
(305)
7,492
(847)
32,497
(76,095)
159
-
2,665
-
2,021
(71,250)
869,563
(721,161)
(18,700)
(30)
(14,263)
115,409
76,656
16,548
(872)
92,332
589,706
(463,235)
(75,241)
(11,352)
191
16,251
(344)
2,107
(1,001)
57,082
(122,321)
429
12,583
152,325
123,080
9,171
175,267
941,246
(1,146,209)
(10,376)
(19)
(11,080)
(226,438)
5,911
10,846
(209)
16,548
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
Ardent Leisure Group Limited | Annual Report 2019
31
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
Notes to the Financial Statements
Overview
1.
Basis of preparation
Ardent Leisure Group Limited is a limited company,
incorporated and domiciled in Australia, whose shares are
publicly traded on the Australian Securities Exchange.
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Ardent Leisure Group Limited is a for-profit entity for the
purposes of preparing financial statements.
The significant policies which have been adopted in the
preparation of these consolidated financial statements for
the year ended 25 June 2019 are set out in the
accompanying notes. These policies have been
consistently applied to the years presented, unless
otherwise stated.
These general purpose financial statements have been
prepared in accordance with the requirements of the
Australian Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board
(AASB), and the Corporations Act 2001.
(a)
Corporate restructure
On 3 October 2018, Ardent Leisure Group announced its
proposal (Proposal) to establish a new listed company,
Ardent Leisure Group Limited (Company), as the single
head entity of the Group, replacing the previous stapled
structure.
The Proposal was approved by Ardent Leisure Group
security holders on 20 November 2018 and by the
Supreme Court of New South Wales on 28 November
2018. Implementation of the Proposal occurred effective
24 December 2018, by way of company and trust schemes
of arrangement, resulting in previously stapled securities
being exchanged for ordinary shares issued by the newly
listed entity. On implementation of the Proposal, eligible
security holders were issued shares in the Company in the
same proportion as stapled securities previously held.
This financial report represents the consolidated financial
statements of the Company and its controlled entities
(collectively, the Group) for the year ended 25 June 2019.
The financial report is a continuation of the combined
financial statements of Ardent Leisure Group (Stapled
Group), which comprised Ardent Leisure Trust (Trust) and
its controlled entities and Ardent Leisure Limited (ALL) and
its controlled entities.
While this is the first financial report with Ardent Leisure
Group Limited as parent entity of the Group, the
consolidated financial report is accounted for as a
corporate reorganisation rather than a business
combination. Accounting for a corporate reorganisation
requires that the new group’s financial statements reflect
the financial position and performance of the new group
as if the restructure had always been in place. Therefore,
the corporate restructure is deemed to have been in place
for the entire period and the Group accounting policies are
consistent with the previous Stapled Group’s accounting
policies, except as disclosed in the notes to financial
statements.
32
Ardent Leisure Group Limited | Annual Report 2019
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
(b)
Historical cost convention
The financial statements have been prepared under the
historical cost convention, as modified by the revaluation of
investment properties, property, plant and equipment,
investments held at fair value and derivative financial
instruments held at fair value.
(c)
Compliance with IFRS as issued by the IASB
Compliance with Australian Accounting Standards ensures
that the financial statements comply with International
Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
Consequently, these financial statements have also been
prepared in accordance with and comply with IFRS as
issued by the IASB.
(d)
Principles of consolidation
Subsidiaries are all entities over which the Group has
control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power to direct the activities of
the entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are
deconsolidated from the date that control ceases.
Inter-entity transactions, balances and unrealised gains on
transactions between Group entities are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the
policies adopted by the Group.
(e)
Foreign currency translation
Functional and presentation currencies
Items included in the financial statements of each of the
Group’s entities are measured using the currency of the
primary economic environment in which the entity
operates (functional currency). The consolidated financial
statements are presented in Australian dollars, which is the
Group’s presentation currency.
Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions
and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign
currencies are recognised in the Income Statement, except
when deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges or they are attributable
to part of the net investment in a foreign operation.
Notes to the Financial Statements
for the year ended 25 June 2019
1.
(e)
Basis of preparation (continued)
Foreign currency translation (continued)
Foreign operations
Assets and liabilities of foreign controlled entities are
translated at exchange rates ruling at reporting date
while income and expenses are translated at average
exchange rates for the period. Exchange differences
arising on translation of the interests in foreign
controlled entities are taken directly to the foreign
currency translation reserve. On consolidation, exchange
differences on loans denominated in foreign currencies,
where the loan is considered part of the net investment
in that foreign operation, are taken directly to the foreign
currency translation reserve. At 25 June 2019, the spot rate
used was A$1.00 = NZ$1.0482 (2018: A$1.00 = NZ$1.0751)
and A$1.00 = US$0.6958 (2018: A$1.00 = US$0.7416). The
average spot rate during the year ended 25 June 2019 was
A$1.00 = NZ$1.0630 (2018: A$1.00 = NZ$1.0878) and
A$1.00 = US$0.7147 (2018: A$1.00 = US$0.7752).
(f)
Critical accounting estimates
The preparation of financial statements in conformity with
Australian Accounting Standards may require the use of
certain critical accounting estimates and management to
exercise its judgement in the process of applying the
Group’s accounting policies. Other than the estimation of
fair values described in Notes 15, 16, 22, 24, 28, 29 and 31
and assumptions related to deferred tax assets and
liabilities, impairment testing of goodwill, and Director
valuations for some property, plant and equipment, no key
assumptions concerning the future, or other estimation of
uncertainty at the reporting date, have a significant risk of
causing material adjustments to the financial statements in
the next annual reporting period.
(g)
Reclassification of comparative information
The Company has reclassified certain amounts related to
the prior period financial position to conform to current
period presentation. These reclassifications have not
changed the results of operations of prior periods.
(h)
New accounting standards, amendments and
interpretations not yet adopted by the Group
Certain new standards, amendments and interpretations to
existing standards have been published that are
mandatory for the Group for accounting periods beginning
on or after 26 June 2019 but which the Group has not yet
adopted. The Group’s assessment of the impact of those
new standards, amendments and interpretations which
may have an impact is set out below:
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
AASB 16 Leases (effective from 1 January 2019)
The Australian Accounting Standards Board has issued a
new Standard for leases which applies to accounting
periods commencing on or after 1 January 2019. Given the
number of properties the Group leases under operating
leases, it is expected that the impact of this Standard will
be significant. Specifically, new assets will be recognised in
respect of the right to use the leased asset as well as new
liabilities, being the liability to pay rentals. The
consolidated Income Statement of Comprehensive
Income will also be affected. Further detail is included in
Note 26.
Early adoption of standards
The Group has not elected to apply any pronouncements
before their operative date.
(i)
New and amended standards adopted by the
Group
The new or amended accounting standards and
interpretations which became effective for the reporting
period commencing on 27 June 2018 are set out below:
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
AASB 9 Financial Instruments and relevant amending
standards;
AASB 15 Revenue from Contracts with Customers and
relevant amending standards;
AASB 2016-5 Amendments to Australian Accounting
Standards – Classification and Measurement of Share-
based Payment Transactions;
AASB Interpretation 22 Foreign Currency Transactions
and Advance Consideration; and
AASB Interpretation 23 Uncertainty Over Income Tax
Treatments.
s
e
t
o
N
Except as disclosed in Note 3, the adoption of new and
amended standards and interpretations has not resulted
in a material change to the financial performance or
position of the Group.
(j)
Rounding
The Group has relied on the relief provided by ASIC
Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 issued by the Australian Securities
and Investments Commission relating to the “rounding
off” of amounts in the financial report. Amounts in the
financial report have been rounded to the nearest
thousand dollars in accordance with that Instrument,
unless otherwise indicated.
Ardent Leisure Group Limited | Annual Report 2019
33
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
Performance
2.
Segment information
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and
returns that are different to those of other business segments.
Segment income, expenditure, assets and liabilities are those that are directly attributable to a segment and the relevant
portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and
consist primarily of cash, receivables (net of any related provisions) and investments. Any assets used jointly by segments are
allocated based on reasonable estimates of usage.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors.
The main income statement items used by management to assess each of the divisions are divisional revenue, divisional
EBITDA and divisional EBIT.
Business segments
The Group is organised on a global basis into the following divisions by product and service type:
(i) Main Event
This segment operates solely in the United States of America and comprises 42 Main Event sites in Texas, Arizona, Georgia,
Illinois, Kentucky, Missouri, New Mexico, Ohio, Oklahoma, Kansas, Florida, Indiana, Pennsylvania, Tennessee, Maryland,
Delaware and Colorado.
(ii)
Theme Parks
This segment comprises Dreamworld and WhiteWater World in Coomera, Queensland and the SkyPoint observation deck and
climb in Surfers Paradise, Queensland.
(iii) Bowling & Entertainment
This segment was sold in the prior year on 30 April 2018.
(iv) Marinas
This segment was sold in the prior year on 14 August 2017.
(v) Health Clubs
This segment was sold in FY17 on 25 October 2016.
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
34
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
2.
Segment information (continued)
27 June 2018 to 25 June 2019
Segment revenue
Segment EBITDA
Depreciation and amortisation
Segment EBIT
Borrowing costs
Interest income
Net loss before tax
Income tax expense
Net loss after tax
Main Event
$’000
Theme Parks
$’000
Corporate
$’000
416,164
47,278
(42,293)
4,985
67,133
(19,834)
(9,226)
(29,060)
4
(15,137)
(837)
(15,974)
The segment EBITDA above includes the following specific items:
Impairment of property, plant and equipment
Pre-opening expenses
Dreamworld incident costs, net of insurance recoveries
Provision for onerous lease contract
Restructuring and other non-recurring items
Selling costs associated with discontinued operations
Net gain/(loss) on disposal of assets
The income tax expense above includes the following specific items:
Tax impact of specific items listed above
Impact of destapling and corporatisation of the Group
Australian tax losses for which deferred tax asset derecognised
Estimated tax payable in respect of prior periods
(17,567)
(2,791)
-
(3,072)
(5,180)
-
1,695
(26,915)
5,652
-
-
-
5,652
-
-
(5,407)
-
(3,048)
-
(1,410)
(9,865)
3,203
-
-
-
3,203
Total assets
Acquisitions of property, plant and equipment and intangible assets
472,104
48,031
146,857
29,033
-
-
-
-
(4,767)
-
(334)
(5,101)
1,530
3,865
(12,376)
(15,919)
(22,900)
86,362
9
35
Ardent Leisure Group Limited | Annual Report 2019
Continuing
operations
$’000
Bowling &
Entertainment
$’000
Marinas Health Clubs
$’000
$’000
Discontinued
operations
$’000
483,301
12,307
(52,356)
(40,049)
(8,262)
339
(47,972)
(12,293)
(60,265)
(17,567)
(2,791)
(5,407)
(3,072)
(12,995)
-
(49)
(41,881)
10,385
3,865
(12,376)
(15,919)
(14,045)
705,323
77,073
-
(528)
-
(528)
-
-
-
-
-
(528)
-
(528)
-
-
-
-
-
-
-
-
(7)
-
(7)
-
-
-
-
-
(7)
-
(7)
-
-
-
-
-
-
-
-
(77)
-
(77)
-
-
-
-
-
(77)
-
(77)
-
-
-
-
-
-
-
-
(612)
-
(612)
-
-
(612)
-
(612)
-
-
-
-
-
(612)
-
(612)
-
-
-
-
-
-
-
Total
$’000
483,301
11,695
(52,356)
(40,661)
(8,262)
339
(48,584)
(12,293)
(60,877)
(17,567)
(2,791)
(5,407)
(3,072)
(12,995)
(612)
(49)
(42,493)
10,385
3,865
(12,376)
(15,919)
(14,045)
705,323
77,073
Notes to the Financial Statements
for the year ended 25 June 2019
2.
Segment information (continued)
1 July 2017 to 26 June 2018
Segment revenue
Segment EBITDA
Depreciation and amortisation
Segment EBIT
Borrowing costs
Interest income
Net (loss)/profit before tax
Income tax benefit/(expense)
Net (loss)/profit after tax
Main Event
$’000
Theme Parks
$’000
Corporate
$’000
355,571
14,159
(33,210)
(19,051)
66,822
(93,795)
(8,679)
(102,474)
-
(15,519)
(1,144)
(16,663)
Continuing
operations
$’000
Bowling &
Entertainment
$’000
Marinas Health Clubs
$’000
$’000
Discontinued
operations
$’000
422,393
(95,155)
(43,033)
(138,188)
(10,339)
191
(148,336)
29,522
(118,814)
122,408
36,153
(12,875)
23,278
2,653
5,175
-
5,175
-
(133)
-
(133)
125,061
41,195
(12,875)
28,320
(65)
-
28,255
(131)
28,124
Total
$’000
547,454
(53,960)
(55,908)
(109,868)
(10,404)
191
(120,081)
29,391
(90,690)
The segment EBITDA above includes the following specific items:
Valuation loss - property, plant and equipment and investment
held at fair value
Impairment of intangible assets including goodwill
Impairment of property, plant and equipment
Pre-opening expenses
Dreamworld incident costs, net of insurance recoveries
Restructuring and other non-recurring items
Gain on sale of discontinued operations
Selling costs associated with discontinued operation classified as
held for sale
Loss on disposal of assets and sale and leaseback of Main Event centre
-
-
(38,287)
(5,900)
-
(7,405)
-
(75,031)
(3,583)
(1,000)
-
(6,158)
-
-
(390)
(1,188)
-
-
-
(1,849)
-
(75,421)
(4,771)
(39,287)
(5,900)
(6,158)
(9,254)
-
-
(654)
(52,246)
-
(493)
(86,265)
-
(66)
(3,493)
-
(1,213)
(142,004)
The income tax benefit/(expense) above includes the following specific items:
Restatement of deferred tax balances to reflect US tax reforms
Tax impact of specific items listed above
12,230
14,629
26,859
-
1,865
1,865
Total assets
Acquisitions of property, plant and equipment and intangible assets
462,120
83,990
124,722
12,776
-
1,048
1,048
34,248
1,128
12,230
17,542
29,772
621,090
97,894
-
-
-
(571)
-
-
20,319
-
(892)
18,856
-
410
410
38
19,922
-
-
-
-
-
-
4,668
-
(29)
4,639
-
89
89
-
-
-
-
-
-
-
-
-
-
-
-
(571)
-
-
24,987
(75,421)
(4,771)
(39,287)
(6,471)
(6,158)
(9,254)
24,987
(133)
-
(133)
(133)
(921)
23,362
(133)
(2,134)
(118,642)
-
-
-
-
-
-
499
499
38
19,922
12,230
18,041
30,271
621,128
117,816
36
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
3.
Revenue from operating activities
Revenue by type
Revenue from services
Revenue from sale of goods
Other revenue
Revenue from operating
activities
Revenue by geographical market
Australia
United States
2019
$’000
2018
$’000
303,957
179,340
4
268,068
154,325
-
483,301 422,393
2018
2019
$’000
$’000
66,822
67,137
355,571
416,164
483,301 422,393
(a)
Accounting policy
Revenue is measured at the fair value of the consideration
received or receivable. Revenue is recognised for the major
business activities as follows:
Rendering of services
Prior to adoption of AASB 15, revenue from rendering of
services including theme park and SkyPoint entry and
bowling games was recognised when the outcome could
be reliably measured and the service had taken place.
Revenue relating to theme park annual passes was
recognised as the passes were used.
Under AASB 15, revenue from rendering of services is
recognised when performance obligations to the
customers have been satisfied.
In the case of Theme Parks, the performance obligation is
satisfied by the provision of entry to Dreamworld,
WhiteWater World and SkyPoint during the validity period
of the entry pass/ticket.
Revenue relating to theme park annual/season passes is
recognised on a straight-line basis over the period that the
pass allows access to the parks.
In the case of Main Event, the performance obligation is
satisfied by provision of a bowling, amusement or other
game/activity which has been paid for by a customer.
Sale of goods
Prior to adoption of AASB 15, revenue from sale of goods
including merchandise and food and beverage items was
recognised when the risks and rewards of ownership had
passed to the buyer.
Under AASB 15, revenue from sale of goods including
merchandise and food and beverage items is recognised
when control of the goods has passed to the buyer,
generally on delivery of the goods at the time of sale.
(b)
Performance obligations
The transaction price allocated to the remaining
performance obligations (unsatisfied or partially
unsatisfied) as at 25 June 2019 is as follows:
Within one year
More than one year
2019
$’000
21,744
78
21,822
Set out below is the amount of revenue recognised from:
Amounts included in deferred revenue
at the beginning of the year
Performance obligations recognised in
previous years
2019
$’000
10,783
-
(c)
Implementation of AASB 15 Revenue from Contracts
with Customers
AASB 15 Revenue from Contracts with Customers
establishes a new revenue recognition model, changes the
basis for deciding whether revenue is to be recognised
over time or at a point in time, provides new and more
detailed guidance on specific topics, and expands and
improves disclosures about revenue.
The most significant impact of the new Standard for the
Group is a change in the revenue recognition profile of
Theme Parks’ annual/season passes. Under the previous
standards, revenue was recognised on these passes based
on usage and visitation whereas the new Standard
requires such income to be recognised on a straight-line
basis over the period that the pass allows access to the
parks.
The Group adopted AASB 15 using the modified
retrospective approach from 27 June 2018. As a result of
adopting the Standard, the Company recorded a $1.4
million increase to accumulated losses with a
corresponding increase in deferred revenue.
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Ardent Leisure Group Limited | Annual Report 2019
37
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
Borrowing costs associated with the acquisition or
construction of a qualifying asset are capitalised as part of
the cost of that asset. Borrowing costs not associated with
qualifying assets, are expensed in the Income Statement.
The capitalisation rate used to determine the amount of
borrowing costs to be capitalised is the weighted average
interest rate applicable to the Group’s outstanding
borrowings during the year. The average capitalisation rate
used was 4.08% per annum (2018: 4.91% per annum) for
Australian dollar debt and nil per annum (2018: 4.82% per
annum) for US dollar debt.
6.
(a)
Taxation
Impact of corporate restructure
Taxation of Trust Income
Under the previous stapled structure, the Trust was a
managed investment trust which derived its earnings from
passive income, predominantly rent and interest. Under
these arrangements, the trustee of the Trust was not liable
for payment of income tax provided that its net income, as
determined under the Trust Constitution, was fully
distributed to its unit holders. As the Trust was treated as a
‘flow through’ entity for taxation purposes, with its net
taxable income being taxed in the hands of its unit holders,
it did not recognise any taxation balances in its financial
statements.
Following implementation of the corporate restructure, the
Trust became a member of a tax consolidated group and,
as such its net income is now included in the taxable
income of that tax consolidated group. The Group has
recognised current and deferred tax balances in its Balance
Sheet and an associated tax benefit in its Income
Statement of $13.0 million in respect of the Trust’s impact
on the taxable income of the tax consolidated group.
Tax base adjustments
For Australian tax purposes, following implementation of
the corporate restructure, the Group has a tax consolidated
group comprising Ardent Leisure Group Limited, ALL, the
Trust and their wholly-owned Australian subsidiaries. The
application of the tax consolidation provisions required the
tax bases of the Trust assets to be reset when the Trust
joined the tax consolidated group, resulting in a decrease
in deferred tax assets of $9.8 million.
The tax cost base of the ALL assets has not been reset as a
result of the capital gains tax rollover that is automatically
applied when the ALL shares were exchanged for Company
shares.
3.
(c)
Revenue from operating activities (continued)
Implementation of AASB 15 Revenue from Contracts
with Customers (continued)
In accordance with AASB 15 disclosure requirements, the
impact of the adoption of the new Standard on revenue
reported for the year ended 25 June 2019 is to increase
revenue from services by $2.4 million with corresponding
impacts to accumulated losses and deferred revenue as
follows:
Before
adoption
of AASB 15
$’000
Impact of
AASB 15
$’000
As
reported
under
AASB 15
$’000
Revenue from
operating activities
Payables
Accumulated losses
480,872
70,221
(279,616)
2,429
(1,028)
(1,401)
483,301
69,193
(281,017)
4. Other expenses
Audit fees
Consulting fees
Consumables
Electricity
Insurance
Legal fees
Merchant fees
Printing, stationery and postage
Taxation fees
Telecommunications
Travel costs
Other administrative costs
Destapling costs
Other
5.
Borrowing costs
Borrowing costs paid or payable
Less: capitalised borrowing costs
2019
$’000
2018
$’000
688
4,777
2,737
12,345
5,600
1,831
7,817
2,463
546
3,517
3,882
3,979
3,878
6,798
60,858
708
6,834
2,093
11,177
5,771
1,064
6,431
1,877
626
3,373
3,564
4,204
30
5,720
53,472
2019
$’000
8,595
(333)
2018
$’000
10,747
(408)
Borrowing costs expensed
8,262
10,339
(a)
Accounting policy
Borrowing costs are recognised as expenses using the
effective interest rate method, except where they are
included in the costs of qualifying assets.
Borrowing costs include interest on short term and long
term borrowings, amortisation of ancillary costs incurred in
connection with the arrangement of borrowings and
finance lease charges.
38
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
6.
(b)
Taxation (continued)
Income tax expense/(benefit)
Current tax
Deferred tax
Over provided in prior year
Income tax expense/(benefit) is attributable to:
Loss from continuing operations
Profit from discontinued operations
Deferred income tax benefit included in
income tax expense/(benefit) comprises:
Increase in deferred tax assets
Decrease in deferred tax liabilities
Note
6(g)
6(i)
(c)
Numerical reconciliation of income tax expense/(benefit) to prima facie tax benefit
Loss from continuing operations before income tax benefit
(Loss)/profit from discontinued operations before income tax benefit
Less: Loss from trusts(1)
Prima facie loss
Tax at the Australian tax rate of 30% (2018: 30%)
Tax effects of amounts which are not deductible/(taxable) in calculating
taxable income:
Impairment of goodwill
Entertainment
Non-deductible depreciation and amortisation
Non-deductible interest due to thin capitalisation
Sundry items
Employee equity-based payments
Business acquisition costs
Australian tax losses for which deferred tax asset derecognised
Gain on disposal of businesses
Restructuring costs
Impact of destapling and corporatisation
Deferred tax benefit arising from US tax reforms
Foreign exchange conversion differences
US State taxes
Withholding tax
Research and development and other credits
Difference in overseas tax rates
Estimated tax payable in respect of prior periods
Over provided in prior year
Income tax expense/(benefit)
2019
$’000
17,122
(5,137)
308
12,293
12,293
-
12,293
(1,079)
(4,058)
(5,137)
2019
$’000
(47,972)
(612)
(48,584)
-
(48,584)
(14,575)
-
85
386
-
(802)
(54)
-
12,376
-
303
(3,355)
-
33
197
401
(18)
1,089
15,919
308
12,293
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
2018
$’000
t
r
o
p
e
R
1,145
(31,228)
692
(29,391)
(29,522)
131
(29,391)
(11,001)
(20,227)
(31,228)
2018
$’000
(148,336)
28,255
(120,081)
69,223
(50,858)
(15,257)
1,075
236
2,008
719
959
(155)
(382)
-
(7,424)
-
-
(12,230)
265
(348)
375
(514)
590
-
692
(29,391)
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
(1) Profits relating to the trusts were largely distributed to unit holders via distributions and were subject to tax upon receipt of this distribution income
by the unit holders.
Ardent Leisure Group Limited | Annual Report 2019
39
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
Taxation (continued)
Income tax benefit relating to items of other comprehensive income
6.
(d)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
Unrealised loss on derivative financial instruments recognised in the cash flow
hedge reserve
Note
19
2019
$’000
-
-
2018
$’000
(68)
(68)
(e) Unrecognised temporary differences
There were no unrecognised temporary differences as at 25 June 2019 (2018: $Nil).
(f)
Tax consolidation legislation
The Company and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation and are
in the process of entering into tax sharing and tax funding agreements, effective for the year ended 25 June 2019, with the
entities in the tax consolidated group. The tax sharing agreement will, in the opinion of the Directors, limit the joint and several
liability of the wholly-owned entities in the case of a default by the head entity, Ardent Leisure Group Limited.
Under the tax funding agreement, the wholly-owned entities will fully compensate the Company for any current tax payable
assumed and are compensated by the Company for any current tax receivable and deferred tax assets relating to unused tax
losses or unused tax credits that are transferred to the Company under the tax consolidation legislation. The funding amounts
are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are payable upon demand by the head entity. The head
entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding
amounts are netted off in non-current inter-entity payables.
(g) Deferred tax assets
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
The balance comprises temporary differences attributable to:
Allowance for expected credit losses - trade receivables
Employee benefits
Provisions and accruals
Property, plant and equipment
Inventory diminution
Deferred revenue
Lease incentives
Tax losses
Other
Deferred tax assets
Set-off of deferred tax balances pursuant to set-off provisions
Australia
United States
Net deferred tax assets
Movements
Balance at the beginning of the year
Foreign exchange differences
Credited to the Income Statement (refer to Note 6(b))
Disposal of businesses
Balance at the end of the year
Deferred tax assets to be recovered within 12 months
Deferred tax assets to be recovered after more than 12 months
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
40
Ardent Leisure Group Limited | Annual Report 2019
2019
$’000
7
2,535
2,763
3,228
180
2,517
7,252
28,044
296
46,822
526
(24,503)
22,845
44,329
1,414
1,079
-
46,822
5,460
41,362
46,822
2018
$’000
14
4,014
2,045
-
93
963
7,130
30,048
22
44,329
(1,356)
(22,207)
20,766
34,275
802
11,001
(1,749)
44,329
6,635
37,694
44,329
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
6.
Taxation (continued)
(h)
Tax losses
Unused capital tax losses for which no deferred tax asset has been recognised
Total losses
Potential tax benefit at 30%
The unused capital tax losses were realised on sale of the Health Clubs business in October 2016.
(i)
Deferred tax liabilities
2019
$’000
-
-
-
2018
$’000
9,261
9,261
2,778
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
The balance comprises temporary differences attributable to:
Prepayments
Accrued revenue and other
Property, plant and equipment
Other
Deferred tax liabilities
Set-off deferred tax balances pursuant to set-off provisions
Australia
United States
Net deferred tax liabilities
Movements
Balance at the beginning of the year
Foreign exchange differences
Credited to the Income Statement (refer to Note 6(b))
Disposal of businesses
Balance at the end of the year
Deferred tax liabilities to be settled within 12 months
Deferred tax liabilities to be settled after more than 12 months
(j)
Review of prior period taxation arrangements
2019
$’000
2018
$’000
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
457
399
38,383
44
39,283
526
(24,503)
15,306
40,654
2,687
(4,058)
-
39,283
1,271
38,012
39,283
458
2,093
38,103
-
40,654
(1,356)
(22,207)
17,091
59,522
2,175
(20,227)
(816)
40,654
2,550
38,104
40,654
The Group has been in discussions with the Australian Taxation Office (ATO) regarding the tax treatment of intragroup leases
by the previous stapled group in prior financial years. Although these discussions are ongoing, it is likely that the outcome will
result in tax payments. Based on the Group’s best estimates, a liability has been recognised at 25 June 2019 for $15.9 million
inclusive of interest, of which $10.0 million has been classified as a non-current liability.
In addition, the Group has recorded an expense for $12.4 million in the year in respect of Australian tax losses for which deferred
tax assets have now been derecognised. The recoverability of these losses against future taxable income is not considered
probable under AASB 112 Income Taxes.
Ardent Leisure Group Limited | Annual Report 2019
41
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
Taxation (continued)
Accounting policy
6.
(k)
Tax
The income tax expense or benefit for the period is the tax
payable on the current period's taxable income based on
the applicable income tax rate for each jurisdiction
adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax
losses.
The current income tax charge is calculated on the basis of
the tax laws enacted or substantively enacted at the end of
the reporting period in the countries where the
Company's subsidiaries and associates operate and
generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate
on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in
the consolidated financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial
recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset
or liability in a transaction other than a business
combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the end of
the reporting period and are expected to apply when the
related deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred tax assets are recognised for deductible
temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for
temporary differences between the carrying amount and
tax bases of investments in foreign operations where the
Company is able to control the timing of the reversal of the
temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
42
Ardent Leisure Group Limited | Annual Report 2019
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability
simultaneously.
Ardent Leisure Group Limited and its wholly-owned
Australian controlled entities have implemented the tax
consolidation legislation. As a consequence, these entities
are taxed as a single entity and the deferred tax assets and
liabilities of these entities are set off in the consolidated
financial statements.
Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity respectively.
Entities within the Group may be entitled to claim special
tax deductions for investments in qualifying assets
(investment allowances). The Group accounts for such
investment allowances as tax credits. This means that the
allowance reduces income tax payable and current tax
expense. A deferred tax asset is recognised for unclaimed
tax credits that are carried forward as deferred tax assets.
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case, it is
recognised as part of the cost of acquisition of the asset or
as part of the expense.
Receivables and payables are stated inclusive of the
amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the taxation authority
is included with other receivables or payables in the
Balance Sheet.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or
financing activities which are recoverable from or payable
to the taxation authority, are presented as operating cash
flow.
Notes to the Financial Statements
for the year ended 25 June 2019
Cash flow information
(a)
Reconciliation of loss for the year to net cash flows from operating activities
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
Loss for the year
Non-cash items
Depreciation of property, plant and equipment
Amortisation
Impairment of goodwill
Impairment of other intangible assets
Impairment of property, plant and equipment
Equity-based payments
Write-off of doubtful debts
Inventory provision increase/(decrease)
Provision for onerous lease contract
Loss on sale of property, plant and equipment
Valuation losses on property, plant and equipment
Write-off of New Zealand tax losses
Valuation loss on investment held at fair value
Classified as financing activities
Borrowing costs
Classified as investing activities
Unrealised net loss/(gain) on derivative financial instruments
Gain on the sale of Bowling & Entertainment before selling costs
Gain on the sale of Marinas before selling costs
Loss on sale and leaseback of Main Event centres
Insurance recovery for damaged Main Event centres
Changes in asset and liabilities:
Decrease/(increase) in assets:
Receivables
Inventories
Deferred tax assets
Construction in progress inventories
Other assets
Increase/(decrease) in liabilities:
Payables and other liabilities
Provisions
Construction in progress deposits
Current tax liabilities
Non-current tax liabilities
Deferred tax liabilities
Net cash flows from operating activities
(b)
Non-cash investing and financing activities
2019
$’000
2018
$’000
t
r
o
p
e
R
(60,877)
(90,690)
48,567
3,789
-
-
17,567
166
649
19
3,072
2,418
-
-
-
52,546
3,363
3,583
1,188
39,287
228
424
(2)
-
1,427
75,031
332
390
8,262
10,404
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
1,376
-
-
-
(2,021)
(72)
(389)
(2,079)
1,805
(1,469)
246
(300)
(1,358)
6,008
10,000
(2,882)
32,497
(881)
(25,268)
(6,434)
706
-
(10,931)
1,019
(10,929)
33,216
(2,413)
29,823
219
(28,317)
(528)
-
(19,711)
57,082
s
e
t
o
N
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
The following item is not reflected in the Statements of Cash Flows:
Distributions by the Group satisfied during the year by the issue of
shares/securities under the DRP
Note
2019
$’000
2018
$’000
29(a)
16,332
2,987
Ardent Leisure Group Limited | Annual Report 2019
43
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
7.
Cash flow information (continued)
(c)
Cash and cash equivalents
Cash and cash equivalents at 25 June 2019 comprise the following:
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
Cash at banks and on hand
Short term deposits
2019
$’000
23,719
68,613
92,332
2018
$’000
16,548
-
16,548
Cash at banks earn interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying periods
of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the
respective short term deposit rates.
For Statement of Cash Flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
(d) Accounting policy
Interest income
Interest income is recognised on a time proportion basis using the effective interest rate method. When a receivable is
impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted
at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.
(e)
Financial liability changes from financing cash flow
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
Interest bearing liabilities
Opening interest bearing liabilities balance
Changes from financing cash flows
Effect of changes in foreign currency rates
Other
Closing interest bearing liabilities balance
s
e
t
o
N
Derivative financial instruments
Opening derivatives asset
Changes in fair value
Closing derivatives liability/(asset)
Total financial liabilities
2019
$’000
2018
$’000
27,849
137,345
3,295
940
169,429
(720)
1,035
315
169,744
232,627
(205,220)
(448)
890
27,849
(244)
(476)
(720)
27,129
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
s
e
c
i
d
n
e
p
p
A
44
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
Losses per share/security
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
Basic losses per share/security (cents) from continuing operations
Basic (losses)/earnings per share/security (cents) from discontinued operations
Total basic losses per share/security (cents)
Diluted losses per share/security (cents) from continuing operations
Diluted (losses)/earnings per share/security (cents) from discontinued operations
Total diluted losses per share/security (cents)
2019
2018
(12.61)
(0.13)
(12.74)
(12.61)
(0.13)
(12.74)
(25.31)
5.99
(19.32)
(25.31)
5.98
(19.33)
Losses used in the calculation of basic and diluted earnings per share/security ($'000)
(60,877)
(90,690)
Weighted average number of shares/securities on issue used in the calculation of basic
losses per share/security ('000)
Weighted average number of shares/securities held by ALL employees under employee
share plans (refer to Note 33) ('000)
Weighted average number of shares/securities on issue used in the calculation of diluted
earnings per share/security ('000)
477,999
469,496
334
692
477,999
469,496
Basic earnings per share/security are determined by dividing profit by the weighted average number of ordinary
shares/securities on issue during the period.
Diluted earnings per share/security are determined by dividing the profit by the weighted average number of ordinary
shares/securities and dilutive potential ordinary shares/securities on issue during the period.
Distributions and dividends paid and payable
Distributions/dividends
No interim or final distribution or dividend has been paid or declared for the year ended 25 June 2019. The following
distributions were paid and payable by Ardent Leisure Trust to stapled security holders in the prior year:
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
2018 distributions for the half year ended:
26 December 2017
26 June 2018(1)
Distribution
cents per
stapled
security
2.00
6.50
8.50
Total
amount
$’000
9,397
30,637
40,034
Distribution
tax
deferred
%
Distribution
CGT concession
amount
%
Distribution
taxable
%
s
e
t
o
N
-
46.68
52.32
(1) The distribution of 6.50 cents per security for the half year ended 26 June 2018 was not declared prior to 26 June 2018.
(a)
Franking credits
The tax consolidated group has franking credits of $1,501,307 (2018: $1,501,307).
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
Working capital
Receivables
Trade receivables
Allowance for expected credit losses
Other receivables
2019
$’000
6,840
(23)
5,707
12,524
2018
$’000
12,080
(48)
1,070
13,102
The Group has recognised an expense of $649,365 in respect of expected credit losses (ECLs) during the year ended 25 June
2019 (2018: $424,425). The expense has been included in other expenses in the Income Statement.
Refer to Note 23(e) for information on the Group’s management of, and exposure to, credit risk.
Ardent Leisure Group Limited | Annual Report 2019
45
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
10. Receivables (continued)
(a)
Accounting policy
Trade receivables are initially recognised at fair value and
subsequently measured at amortised cost using the
effective interest rate method less allowances for ECLs.
They are presented as current assets unless collection is
not expected for more than 12 months after the reporting
date.
The collectability of debts is reviewed on an ongoing basis.
Debts are written off when there is no reasonable
expectation of recovering the contractual cash flows.
The Group applies a provision matrix in calculating ECLs
for trade receivables. The provision rates are based on days
past due for groupings of customers that have similar loss
patterns and are based on the Group’s historically
observed default rates and adjusted with forward-looking
information at each reporting date where applicable.
Assessment of the relationship between historical
observed default rates, forecast economic conditions and
ECLs requires judgement. The amount of ECLs is sensitive
to changes in circumstances and of forecast economic
conditions. The Group’s historical credit loss experience
and forecast of economic conditions may not be
representative of actual default rates in the future.
The amount of any provision for ECLs is recognised in the
Income Statement within other expenses. When a trade
receivable for which a provision has been recognised
becomes uncollectible in a subsequent period, it is written
off against the provision. Subsequent recoveries of
amounts previously written off are credited against other
expenses in the Income Statement.
The Group has applied AASB 9 prospectively, with an initial
application date of 27 June 2018. The Group has not
restated the comparative information, which continues to
be reported under AASB 139. There were no transition
adjustments arising from the adoption of AASB 9.
Classification and measurement
The classification and measurement requirements of AASB
9 did not have a significant impact to the Group. The Group
continued measuring at fair value all financial assets
previously held at fair value under AASB 139. The following
are the changes in the classification of the Group’s financial
assets:
Trade receivables classified as Loans and receivables as at
26 June 2018 which are held to collect contractual
cash flows and give rise to cash flows representing
solely payments of principal and interest, have been
classified and measured as Debt instruments at
amortised cost under AASB 9 from 27 June 2018.
Inventories
Goods held for resale
Provision for diminution
2019
$’000
7,915
(133)
7,782
2018
$’000
8,294
(114)
8,180
There was no expense relating to the write-downs of
inventories during the year ended 25 June 2019 (2018:
$Nil).
(b)
Implementation of AASB 9 Financial Instruments
(a)
Accounting policy
AASB 9 Financial Instruments replaces AASB 139 Financial
Instruments: Recognition and Measurement for annual
periods beginning on or after 1 January 2018, bringing
together aspects of the accounting for financial
instruments: classification and measurement; impairment;
and hedge accounting.
Inventories are valued at the lower of cost and net
realisable value. Cost of goods held for resale is determined
by weighted average cost. Cost of catering stores (which by
nature are perishable) and other inventories is determined
by purchase price.
46
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
Construction in progress
Construction in progress inventories relate to centres that are under construction by Main Event under agreements that Main
Event has entered into with third parties. Once the Group has satisfied the requirements of the agreements and acceptance of
the centre by the third parties has occurred, the risks and rewards pass to the third parties. The costs funded by the third
parties during the course of construction are recorded as a current liability, construction in progress deposits, and upon
acceptance of the centre by the third parties this liability and related construction in progress inventories are settled. Any net
realisable value adjustment is recorded in the Income Statement as a gain/loss on sale of the construction in progress
inventories.
At 25 June 2019, the Group had agreements for construction of three Main Event Centres. These agreements set out agreed
construction timetables, estimated costs and other key terms, including the right of the third party to exercise a put option
and recover deposits advanced to the Group should construction not be completed within agreed timeframes. At 25 June
2019, construction on two of these centres was complete, with the remaining centre expected to be completed within 12
months and agreed timeframes.
(a)
Construction in progress inventories
A reconciliation of the carrying amount of the construction in progress inventories at the beginning and end of the current
period is set out below:
Carrying amount at the beginning of the year
Additions
Disposals
Foreign exchange movements
Carrying amount at the end of the year
(b)
Construction in progress deposits
2019
$’000
772
11,345
(13,149)
1,610
578
2018
$’000
56,756
8,989
(65,633)
660
772
A reconciliation of the carrying amount of the construction in progress deposits liability at the beginning and end of the
current period is set out below:
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
Carrying amount at the beginning of the year
Deposits received
Settlements of deposits received
Foreign exchange movements
Carrying amount at the end of the year
(c)
Accounting policy
2019
$’000
-
7,154
(8,512)
1,358
-
2018
$’000
50,050
13,889
(64,563)
624
-
s
e
t
o
N
Construction in progress inventories are valued at the lower of cost and net realisable value. Cost of construction in progress
comprises the purchase price and other costs, including labour costs which are allocated in accordance with the terms of the
agreements.
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
Other assets
Prepayments
Accrued revenue
2019
$’000
5,654
2,773
8,427
2018
$’000
6,707
2,918
9,625
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Ardent Leisure Group Limited | Annual Report 2019
47
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
Payables
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
Current
Interest payable
GST payable
Trade creditors
Property expenses payable
Employee benefits
Deferred revenue
Straight-line rent liabilities
Lease incentive liabilities
Property tax payable
Capital expenditure including construction in progress inventories payable
Other payables
Total current payables
Non-current
Lease incentive liabilities
Straight-line rent liabilities
Total non-current payables
Total payables
(a)
Accounting policy
Payables
2019
$’000
1,954
97
9,297
427
17,577
11,273
97
3,984
5,332
5,165
13,992
69,195
2018
$’000
147
14
10,229
446
16,662
10,783
931
3,377
5,311
4,639
17,756
70,295
33,782
3,821
37,603
106,798
28,575
2,847
31,422
101,717
Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the
Group. The amounts are unsecured and are usually paid within 30 to 60 days of recognition. Trade payables are presented as
current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest rate method.
Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be
settled within 12 months of the reporting date are recognised in other payables in respect of employees' services up to the
reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-
accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
Long term assets
s
e
t
o
N
Property, plant and equipment
Segment
Note
(1) (2) (3)
Theme Parks
Main Event
Other
Total
Cost less
accumulated
depreciation &
impairments
2019
$’000
Cumulative
revaluation
(decrements)/
increments
2019
$’000
Consolidated
book
value
2019
$’000
Cost less
accumulated
depreciation &
impairments
2018
$’000
Cumulative
revaluation
(decrements)/
increments
2018
$’000
243,448
346,752
1,115
591,315
(112,674)
-
-
(112,674)
130,774
346,752
1,115
478,641
226,318
339,918
2,106
568,342
(112,674)
-
-
(112,674)
Consolidated
book value
2018
$’000
113,644
339,918
2,106
455,668
s
e
c
i
d
n
e
p
p
A
(1) The book value of Dreamworld and WhiteWater World land and buildings, major rides and attractions and other plant and equipment (including
construction work in progress of $28.8 million (2018: $6.7 million), intangible assets of $2.9 million (2018: $0.8 million) and livestock of $0.2 million
(2018: $0.2 million) is $96.1 million (2018: $78.5 million). At 25 June 2019, the Directors have assessed the fair value of land and buildings and major
rides and attractions to be $50.6 million. Refer to additional Theme Parks valuation information below. All other plant and equipment are carried at
depreciated historic cost of $45.5 million. The last independent valuation of this property was undertaken at 25 December 2018 by Jones Lang
LaSalle.
(2) The excess land adjacent to Dreamworld has been valued by the Directors at $5.2 million (2018: $3.6 million). The last independent valuation of this
property was undertaken at 25 December 2018 by Jones Lang LaSalle.
(3) The Directors have assessed the fair value of SkyPoint at 25 June 2019 to be $32.6 million (2018: $32.3 million). The last independent valuation of
this property was undertaken at 25 December 2018 by Jones Lang LaSalle.
48
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
15.
Property, plant and equipment (continued)
Refer to Note 24(b) for information on the valuation techniques used to derive the fair value of the Theme Parks.
A reconciliation of the carrying amount of property, plant and equipment at the beginning and end of the current and previous
years is set out below:
t
r
o
p
e
R
Land and
buildings
$’000
Major rides
and
attractions
$’000
Plant and
equipment
$’000
Furniture,
fittings and
equipment
$’000
Motor
vehicles
$’000
183,244
12,228
-
-
(363)
(7,583)
10,815
(7,197)
191,144
65,612
27,476
-
-
(1,234)
(866)
-
-
90,988
202,343
28,608
767
(712)
(564)
(39,037)
11,148
(10,370)
192,183
4,128
932
-
-
(42)
(1,010)
-
-
4,008
341
32
-
-
-
(55)
-
-
318
Land and
buildings
$’000
Major rides
and
attractions
$’000
Plant and
equipment
$’000
Furniture,
fittings and
equipment
$’000
Motor
vehicles
$’000
283,107
64,734
64,108
3,074
279,664
41,278
(51,908)
(2,851)
(10,059)
7,338
(75,753)
(31,364)
183,244
-
(551)
(1,019)
-
-
-
65,612
(69,447)
(7,489)
(39,342)
5,602
-
(7,923)
202,343
9,210
2,911
(5,816)
(132)
(2,044)
(1)
-
-
4,128
351
55
-
(10)
(55)
-
-
-
341
Total
$’000
455,668
69,276
767
(712)
(2,203)
(48,551)
21,963
(17,567)
478,641
Total
$’000
636,440
112,052
(127,171)
(11,033)
(52,519)
12,939
(75,753)
(39,287)
455,668
2019
Carrying amount at the beginning of the
year
Additions
Transfer from inventories
Transfer to intangible assets
Disposals
Depreciation
Foreign exchange movements
Impairment
Carrying amount at the end of the year
2018
Carrying amount at the beginning of the
year
Additions
Disposal relating to the sale of Bowling &
Entertainment
Disposals
Depreciation
Foreign exchange movements
Revaluation decrements
Impairment
Carrying amount at the end of the year
(a)
Theme Parks valuation
The tragic incident which occurred on the Thunder River Rapids ride at Dreamworld in October 2016 and subsequent Coronial
Inquest continues to negatively impact attendance and revenues in the current period, with recovery being slower than
expected. In the prior two years, the Group has recognised revaluation decrements to the property, plant and equipment of
Dreamworld and WhiteWater World of $167.7 million and a further impairment provision of $1.0 million.
At 25 June 2019, the valuation of Dreamworld and WhiteWater World has been determined in accordance with AASB 13 Fair
Value Measurement, which defines fair value as the price that would be received to sell an asset in an orderly transaction
between market participants. This Standard requires that the valuation take account of the benefits attainable under the
highest and best use, provided that any alternate uses are physically possible, legally permissible and financially feasible.
Under the Standard, uses that are legally permissible take into account any legal restrictions on the use of the asset that
market participants would take into account when pricing the asset (e.g. the zoning restrictions applicable to a property). This
resulted in the fair value of land, buildings and major rides and attractions being assessed at $50.6 million. Together with
other assets carried at historic cost of $45.5 million, the book value of Dreamworld and WhiteWater World is $96.1 million at
25 June 2019.
Ardent Leisure Group Limited | Annual Report 2019
49
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
15. Property, plant and equipment (continued)
(a)
Theme Parks valuation (continued)
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
At 25 December 2018, the Group obtained independent valuation advice from Jones Lang LaSalle (JLL) to assist in determining
a Directors’ valuation of the property. The valuer considered the work undertaken in the prior year (as set out in the annual
financial report for the year ended 26 June 2018) and reviewed management’s updated forecasts in light of the park’s
performance and market conditions at that time. In determining a Directors’ valuation at 25 June 2019, the Directors have had
regard to the work of JLL in December 2018 as well as updated forecasts for the park in light of market conditions and
management initiatives currently in place to improve its performance.
The significant unobservable inputs associated with the valuation of the Dreamworld and WhiteWater World valuation are as
follows:
Capitalisation rate
Discount rate
Terminal yield
10 year average annual EBITDA ($’000)
10 year average annual capital expenditure ($’000)
June
2019
11.50%
14.00% - 14.50%
11.50% - 12.00%
26,503
15,409
June
2018
11.50%
14.00% - 14.50%
11.50% - 12.00%
18,528
8,340
In addition, the valuation has assumed a gradual recovery of attendances to FY16 (pre-incident) levels over the next five years,
with FY20 attendances estimated to be approximately 64% of FY16 (pre-incident) levels.
The Directors note the material valuation uncertainty which exists both in terms of market disruption (e.g. liquidity) and
availability of inputs (e.g. cash flows, discount rates and capitalisation rates) which could impact the valuation of these assets.
The sensitivity of the fair values of the land and buildings and major rides and attractions in relation to the significant
unobservable inputs is set out in the table below:
Fair value measurement sensitivity to 0.5% increase in rate/yield
Fair value measurement sensitivity to 0.5% decrease in rate/yield
Capitalisation
rate (%)
- $2.6
million
Discount rate
(%)
- $2.9
million
+ $2.8
million
+ $3.1
million
s
e
t
o
N
Fair value measurement sensitivity to 10.0% increase in assumed
attendance levels
Fair value measurement sensitivity to 10.0% decrease in
assumed attendance levels
n/a
n/a
n/a
n/a
Terminal
yield (%)
- $1.7
million
+ $1.9
million
n/a
n/a
Attendance
levels
n/a
n/a
+ $22.6
million
- $17.7
million
When calculating the income capitalisation approach, EBITDA has a strong inter-relationship with the adopted capitalisation
rate given the methodology involves assessing the total income receivable from the property and capitalising this in
perpetuity to derive a capital value. In theory, an increase in the income and an increase (softening) in the adopted
capitalisation rate could potentially offset the impact to the fair value. The same can be said for a decrease in the income and a
decrease (tightening) in the adopted capitalisation rate. A directionally opposite change in the income and the adopted
capitalisation rate could potentially magnify the impact to the fair value.
There are no other significant inter-relationships between unobservable inputs that materially affect the fair value.
(b)
Accounting policy
Revaluation model
s
e
c
i
d
n
e
p
p
A
The revaluation model of accounting is used for Theme Parks land, buildings and major rides and attractions. All other classes
of property, plant and equipment (PPE) are carried at historic cost. Initially, PPE is measured at cost. For assets carried under
the revaluation model, PPE is carried at a revalued amount, being its fair value at the date of revaluation less any subsequent
accumulated depreciation and subsequent accumulated impairment losses. Revaluations are made with sufficient regularity
to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the
reporting date.
50
Ardent Leisure Group Limited | Annual Report 2019
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
Notes to the Financial Statements
for the year ended 25 June 2019
15.
Property, plant and equipment (continued)
(b)
Accounting policy (continued)
Revaluation model (continued)
Increases in the carrying amounts arising on revaluation of
PPE are credited, net of tax, to other reserves in equity. To
the extent that the increase reverses a decrease previously
recognised in profit or loss, the increase is first recognised
in profit or loss. Decreases that reverse previous increases
of the same asset are first charged against the asset
revaluation reserve directly in equity to the extent of the
remaining reserve attributable to the asset; all other
decreases are charged to the Income Statement. Each year,
the difference between depreciation based on the revalued
carrying amount of the asset is charged to the Income
Statement and depreciation based on the asset’s original
cost, net of tax, is transferred from the asset revaluation
reserve to retained profits.
At each reporting date, the fair values of PPE are assessed
by reference to independent valuation reports or through
appropriate valuation techniques adopted by
management. Fair value is determined assuming a long
term property investment. Specific circumstances of the
owner are not taken into account.
The use of independent valuers is on a progressive basis
over a three-year period, or earlier, where the management
believes there may be a material change in the carrying
value of the property.
Where an independent valuation is not obtained, factors
taken into account where appropriate, by the Directors in
determining fair value may include:
For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of
the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for
possible reversal of the impairment at each reporting date.
In assessing impairment of assets, the Group has
determined that it has the following CGUs:
SkyPoint, including the SkyPoint climb;
Dreamworld/WhiteWater World combined theme park;
Dreamworld excess land; and
Each individual Main Event US entertainment centre.
During the prior year, the Group performed an impairment
assessment of property, plant and equipment in
accordance with AASB 136 Impairment of assets. This
analysis determined that the carrying value of assets in five
Main Event centres exceeded their recoverable amount by
US$28.4 million (A$38.3 million) and an impairment loss
was recognised for this amount. In the current year, a
similar impairment assessment has resulted in an
additional impairment loss of $12.2 million (A$17.6 million)
relating to four of the five previously impaired centres.
The recoverable amount of assets has been determined
based on value-in-use calculations, which include the
following key assumptions:
Pre-tax discount rate
Long term EBITDA growth rate
2019
$’000
11.3%
1.0%
2018
$’000
10.3%
1%
Assuming a willing buyer and a willing seller, without
Depreciation
duress and an appropriate time to market the property
to maximise price;
Information obtained from valuers, sales and leasing
agents, market research reports, vendors and potential
purchasers;
Capitalisation rates used to value the asset, market
rental levels and lease expiries;
Changes in interest rates;
Asset replacement values;
Discounted cash flow (DCF) models;
Available sales evidence; and
Comparisons to valuation professionals performing
valuation assignments across the market.
Impairment of property, plant and equipment
Property, plant and equipment is reviewed for impairment
whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s
fair value less costs to sell, and its value in use.
Land and construction work in progress are not
depreciated. Depreciation on other assets is calculated
using the straight-line method to allocate their cost or
revalued amounts, net of their residual values, over their
estimated useful lives as follows:
s
e
t
o
N
Buildings
Leasehold improvements
Major rides & attractions
Plant and equipment
Furniture, fittings &
equipment
Motor vehicles
2019
40 years
Lease term
20 - 40 years
4 - 25 years
2018
40 years
Lease term
20 - 40 years
4 - 25 years
3 - 13 years
8 years
3 - 13 years
8 years
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at each reporting date. An
asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount. Gains and
losses on disposals are determined by comparing
proceeds with carrying amount. These are included in the
Income Statement. When revalued assets are sold, it is
Group policy to transfer the amounts included in reserves
in respect of those assets to retained profits.
Ardent Leisure Group Limited | Annual Report 2019
51
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
2019
$’000
29,928
(10,905)
19,023
72,830
(12,880)
59,950
78,973
2019
$’000
13,834
7,797
712
(370)
-
(3,789)
839
19,023
56,441
-
-
3,509
59,950
78,973
2018
$’000
20,950
(7,116)
13,834
69,321
(12,880)
56,441
70,275
2018
$’000
13,616
5,764
-
(1,391)
(1,188)
(3,363)
396
13,834
82,971
(24,787)
(3,583)
1,840
56,441
70,275
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
Intangible assets
t
r
o
p
e
R
Software at cost
Accumulated amortisation and impairment
'
s
r
o
t
c
e
r
i
D
Goodwill at cost
Accumulated impairment
Total intangible assets
s
t
n
e
m
e
t
a
t
S
Software
Opening net book amount
Additions
Transfer from property, plant and equipment
Disposals
Impairment
Amortisation
Foreign exchange movements
Closing net book amount
Goodwill
Opening net book amount
Disposals
Impairment
Foreign exchange movements
Closing net book amount
Total intangible assets
(a)
Goodwill
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Goodwill represents goodwill acquired by the Group as part of various acquisitions. Goodwill is monitored by management at
the operating segment level. Management reviews the business performance based on geography and type of business as
disclosed in Note 2.
A segment level summary of the goodwill allocation is presented below:
United States
Main Event
2019
$’000
59,950
59,950
2018
$’000
56,441
56,441
52
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
16.
Intangible assets (continued)
(c)
(i)
Goodwill (continued)
Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to business segment and country of
operation.
Key assumptions used for value in use calculations
The table below shows the key assumptions used in the value in use calculations to test for impairment in the business
segments to which a significant amount of goodwill was allocated:
Budget/forecast
EBITDA period growth rate
Long term EBITDA
growth rate(1)
2019
2018
% per annum % per annum % per annum % per annum % per annum % per annum
2019
2019
2018
2018
Post-tax discount rate(2)
Main Event
2.00
2.00
2.00
2.00
7.50
7.50
(1) Average growth rate used to extrapolate cash flows beyond the budget/forecast period.
(2) In performing the value in use calculation, the Group has applied a post-tax discount rate to discount the forecast future attributable post-tax cash
flows. The pre-tax discount rate is 7.91% (2018: 7.68%) for Main Event centres.
The period over which management has projected the
CGU cash flows is five years. The weighted average
growth rates used are consistent with forecasts included in
industry reports. The discount rates used are post tax and
reflect specific risks relating to the country in which the
CGU operates.
The recoverable amount of a CGU is determined based on
value in use calculations. These calculations use cash flow
projections based on the FY20-FY24 financial year
budgets/forecasts. Cash flows beyond the budget period
are extrapolated using the growth rates stated above. The
growth rate does not exceed the long term average
growth rate for the business in which the CGU operates.
Sensitivity to changes in assumptions
Management recognises that the calculation of
recoverable amount can vary based on the assumptions
used to project or discount cash flows and those changes
to key assumptions can result in recoverable amounts
falling below carrying amounts. In relation to the CGUs
above, the recoverable amounts of Main Event centres are
in excess of their carrying amounts.
The Directors consider that the growth rates are
reasonable, and do not consider a change in any of the key
assumptions would cause the CGUs’ carrying amount to
exceed their recoverable amount to be reasonably
possible.
(b)
Accounting policy
Software
Software is amortised on a straight-line basis over the
period during which the benefits are expected to be
received, which is between 5 – 8 years (2018: 5 – 8 years).
Goodwill
Goodwill on acquisitions of subsidiaries is included in
intangible assets. Goodwill on acquisitions of associates
is included in investments in associates. Goodwill is not
amortised but it is tested for impairment annually, or
more frequently if events or changes in circumstances
indicate that it might be impaired, and is carried at cost
less accumulated impairment losses. Gains and losses on
the disposal of an entity include the carrying amount of
goodwill relating to the entity sold.
Goodwill is allocated to CGUs for the purposes of
impairment testing. The allocation is made to those CGUs
or groups of CGUs that are expected to benefit from the
business combination in which the goodwill arose,
identified according to operating segments (refer to Note
2).
s
e
t
o
N
Impairment of assets
Goodwill and intangible assets that have an indefinite
useful life are not subject to amortisation and are tested
annually for impairment or more frequently if events or
changes in circumstances indicate that they might be
impaired. Other assets are reviewed for impairment
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell, and its
value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or
groups of assets (cash-generating units). Non-financial
assets other than goodwill that suffered impairment are
reviewed for possible reversal of the impairment at each
reporting date.
Ardent Leisure Group Limited | Annual Report 2019
53
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
Debt and equity
Contributed equity
No. of
shares/securities
Details
469,153,284
1,510,100
681,149
-
471,344,533
8,361,483
-
-
Securities on issue
DRP issue
Equity-based payments - securities issued
Issue costs paid
Securities on issue
DRP issue
Impact of corporate restructure
Issue costs paid
Date of
income
entitlement
Note
30 Jun 2017
1 Jul 2017
1 Jul 2017
26 Jun 2018
1 Jul 2018
24 Dec 2018
(a)
(b)
(d)
(a)
(c)
(d)
2019
$’000
2018
$’000
662,450
2,987
1,313
(19)
666,731
666,731
16,332
94,091
(30)
479,706,016
Shares/securities on issue
25 Jun 2019
777,124
666,731
(a)
Dividend/Distribution Reinvestment Plan (DRP) issues
The Group has established a DRP under which security holders/shareholders may elect to have all or part of their
dividend/distribution entitlements satisfied by the issue of new shares/securities rather than being paid in cash. The discount
available on shares/securities issued under the DRP is 2.0% on the market price.
(b)
Equity-based payments
The Group has Deferred Short Term Incentive Plan (DSTI) and Long Term Incentive Plan (LTIP) remuneration arrangements
under which performance rights are issued to certain management and other personnel within the Group as part of their
remuneration arrangements. These performance rights are subject to vesting conditions as set out in Note 33.
Upon vesting, the Group issues shares to these personnel.
(c)
Impact of corporate restructure
Refer to Note 19.
(d)
Equity
Incremental costs directly attributable to the issue of new shares/securities are recognised directly in equity as a reduction in
the proceeds of shares/securities to which the costs relate. Incremental costs directly attributable to the issue of new
shares/securities for the acquisition of a business are not included in the cost of the acquisition as part of the purchase
consideration.
Other equity
Treasury shares/securities
Closing balance
Opening balance
Acquisition of treasury shares/securities
Issuance of treasury shares/securities
Closing balance
(a)
Accounting policy
2019
$’000
148
148
2019
1,405
25
(1,282)
148
$'000
2018
$’000
1,405
1,405
2018
1,662
-
(257)
1,405
No. of shares/securities
2019
2018
649,958
20,341
(528,132)
142,167
799,334
-
(149,376)
649,958
Treasury shares/securities are equity investments in Ardent Leisure Group Limited that are held by the Ardent Leisure
Employee Share Trust for the purpose of issuing shares under the Group’s DSTI and LTIP. Shares/securities issued to
employees are recognised on a first-in-first-out basis.
54
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
18.
Other equity (continued)
(a)
Accounting policy (continued)
Own equity instruments that are reacquired (treasury shares/securities) are recognised at cost and deducted from equity. No
gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments.
Any difference between the carrying amount and the consideration, if reissued to employees under the Group’s LTIP and
DSTI, is recognised in the equity-based payments reserve. Performance rights vesting during the reporting period may be
satisfied with treasury shares.
Reserves
Asset revaluation reserve
Opening balance
Revaluation - Theme Parks
Closing balance
Cash flow hedge reserve
Opening balance
Movement in effective cash flow hedges
Tax on movement on cash flow hedges
Closing balance
Foreign currency translation reserve
Opening balance
Translation of foreign operations
Closing balance
Equity-based payment reserve
Opening balance
Option expense
Closing balance
Corporate restructure reserve
Opening balance
Impact of corporate restructure
Closing balance
Total reserves
2019
$’000
15,499
-
15,499
-
-
-
-
(22,856)
17,501
(5,355)
(6,889)
(1,203)
(8,092)
-
(94,091)
(94,091)
(92,039)
2018
$’000
16,221
(722)
15,499
(903)
835
68
-
(36,376)
13,520
(22,856)
(5,803)
(1,086)
(6,889)
-
-
-
(14,246)
The asset revaluation reserve is used to record increments and decrements on the revaluation of property, plant and
equipment, as set out in Note 15(b).
The cash flow hedge reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are
recognised directly in equity as described in Note 22(c).
Exchange differences arising on the translation of foreign controlled entities are taken to the foreign currency translation
reserve. In addition, on consolidation, exchange differences on loans denominated in foreign currencies are taken directly
to the foreign currency translation reserve where the loan is considered part of the net investment in that foreign
operation.
The equity-based payment reserve is used to recognise the fair value of performance rights issued to employees but not yet
exercised under the Group’s DSTI and LTIP.
Under the corporate restructure, Ardent Leisure Group Limited shares were issued to security holders in return for their stapled
securities. Ardent Leisure Group Limited share capital was measured at fair value on the date of the transaction, being the
market capitalisation of the Stapled Ardent Leisure Group on the date of implementation ($777.1 million). The difference
between the contributed equity of Ardent Leisure Group Limited and the pre-restructure contributed equity of the Stapled
Ardent Leisure Group at the date of the transaction was recognised as a corporate restructure reserve.
Ardent Leisure Group Limited | Annual Report 2019
55
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
Accumulated losses
Opening balance
Loss for the year
Available for distribution
Impact of change in accounting standard
Distributions paid and payable
Closing balance
Interest bearing liabilities
Current
Bank loan - term debt
Total current
Non-current
Bank loan - term debt
Less: unamortised loan costs
Total non-current
Total interest bearing liabilities
2019
$’000
2018
$’000
1,796
1,796
-
-
177,853
(10,220)
167,633
169,429
27,849
-
27,849
27,849
In April 2019, the Group concluded the refinancing of its
debt facilities with the completion of a US$200.0 million
term loan facility, comprising a US$125.0 million drawn
term loan and a US$75.0 million delayed draw term loan,
as well as a US$25.0 million revolving credit facility
(collectively, the Facility) by its wholly-owned US
subsidiary, Main Event Entertainment, Inc. (Main Event).
The facility is secured and guaranteed by Main Event and is
non-recourse to the other assets of the Group.
The proceeds of the drawn term loan were used to repay
the Group’s previous Australian bank debt facility, and the
balance of the proceeds will be available to support
investment in Theme Parks and Main Event as well as
general corporate purposes.
The terms of the facility also impose a net leverage
covenant on Main Event, being the ratio of net debt to
EBITDA adjusted for unrealised and certain non-cash and
other one-off items (adjusted EBITDA).
(a)
Total secured liabilities and assets pledged as
security
The carrying amounts of Main Event assets (2018: Group
assets) pledged as security for borrowings are as follows:
Current assets
Non-current assets
Total assets
2019
$’000
44,146
362,302
406,448
2018
$’000
71,372
472,549
543,921
56
Ardent Leisure Group Limited | Annual Report 2019
Note
3(c)
9
2019
$’000
(206,962)
(60,877)
(267,839)
(1,401)
(30,595)
(299,835)
2018
$’000
(102,205)
(90,690)
(192,895)
-
(14,067)
(206,962)
(b)
Credit facilities
As at 25 June 2019, Main Event had unrestricted access to
the following credit facilities:
Group A$ syndicated facilities
Amount used
Amount unused
Group US$ syndicated facilities
Amount used
Amount unused
Main Event US$ term debt(1)
Amount used
Amount unused
Main Event US$ revolving credit
facility(2)
Amount used
Amount unused
2019
$’000
-
-
-
-
-
-
2018
$’000
66,667
(5,600)
61,067
102,769
(22,249)
80,520
287,439
(179,649)
107,790
35,930
-
35,930
-
-
-
-
-
-
Total facilities
Total amount used
Total amount unused
169,436
323,369
(179,649)
(27,849)
143,720 141,587
(1) Main Event US$125.0 million term debt and US$75.0 million
delayed draw term debt facilities will mature on 4 April 2025. Any
part of the delayed draw term debt facility remaining undrawn at
4 April 2021 will expire at that date.
(2) Main Event US$25.0 million revolving credit facility will mature on
4 April 2024.
All of the facilities have a variable interest rate. As detailed
in Note 22, the interest rates on the loans are partially fixed
using interest rate swaps and caps. The weighted average
interest rates payable on the loans at 25 June 2019,
including the impact of the interest rate swaps and caps, is
nil per annum for AUD denominated debt (2018: 4.64% per
annum) and 8.77% per annum for USD denominated debt
(2018: 2.07% per annum).
Notes to the Financial Statements
for the year ended 25 June 2019
21.
Interest bearing liabilities (continued)
(c)
Accounting policy
Interest bearing liabilities
Borrowings are initially recognised at fair value, net of
transaction costs incurred and are subsequently measured
at amortised cost. Any difference between the proceeds
(net of transaction costs) and the redemption amount is
recognised in the Income Statement over the period of the
borrowing using the effective interest rate method. Fees
paid on the establishment of loan facilities, which are not
an incremental cost relating to the actual drawdown of the
facility, are recognised as prepayments and amortised on a
straight-line basis over the term of the facility.
Finance leases are recognised as interest bearing liabilities
to the extent that the Group retains substantially all the
risks and rewards of ownership.
Interest bearing liabilities are classified as current liabilities
unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the
end of the reporting period.
(d)
Implementation of AASB 9 Financial Instruments
As set out in Note 10(b), the Group has applied AASB 9 from
27 June 2018 on a prospective basis.
There were no changes in classification and measurement
for the Group’s interest bearing liabilities on adoption of
AASB 9.
Financial risk management
Derivative financial instruments
Current assets
Forward foreign exchange contracts
Interest rate swaps
Non-current assets
Interest rate caps
Non-current liabilities
Interest rate swaps
2019
$’000
2018
$’000
13
-
13
177
177
505
505
-
748
748
-
-
28
28
(a)
Forward foreign exchange contracts
The Group has entered into forward foreign exchange
contracts to buy US dollars and sell Australian dollars. These
contracts total A$0.4 million (2018: A$0.4 million).
The forward contracts do not qualify for hedge accounting
and accordingly, changes in fair value of these contracts are
recorded in the Income Statement. Notwithstanding the
accounting outcome, the Company considers that these
derivative contracts are appropriate and effective in
offsetting the economic foreign exchange exposures of the
Group.
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
(b)
Interest rate swaps and interest rate caps
The Group has interest rate swap agreements totalling
A$Nil (2018: A$8.0 million) and US$70.0 million (A$100.6
million) (2018: US$48.0 million (A$64.7 million)) that entitle
it to receive interest, at monthly/quarterly intervals, at a
floating rate on a notional principal and oblige it to pay
interest at a fixed rate. The interest rate swap agreements
allow the Group to effectively swap a floating rate of
interest on the notional principal amount into a fixed rate.
The Group also has an interest rate cap agreement in place
effective from 3 December 2020 under which it can limit
its interest expense on a notional principal amount of
US$70.0 million. This notional principal amount reduces to
US$55.0 million in April 2021, US$40.0 million in April 2022
and US$20.0 million in April 2023 with the agreement
terminating in April 2024.
The Group has elected not to apply hedge accounting for
its interest rate swap and cap agreements. Accordingly,
changes in fair value of these swaps and caps are recorded
in the Income Statement. Notwithstanding the accounting
outcome, the Company considers that these derivative
contracts are appropriate and effective in offsetting
adverse economic interest rate exposures of the Group.
The table below shows the notional value and maturity
profile of the interest rate swaps and caps:
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
Less than 1 year
1 - 2 years
2 - 3 years
3 - 4 years
4 - 5 years
2019
$’000
2018
$’000
-
122,162
21,558
28,744
28,744
70,000
141,503
-
-
-
201,208 211,503
s
e
t
o
N
(c)
Accounting policy
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The
method of recognising the resulting gain or loss depends
on whether the derivative is designated as a hedging
instrument if hedging criteria are met, and if so, the nature
of the item being hedged. The Group may designate
certain derivatives as either hedges of exposures to
variability in cash flows associated with future interest
payments on variable rate debt (cash flow hedges) or
hedges of net investments in foreign operations (net
investment hedges).
Ardent Leisure Group Limited | Annual Report 2019
57
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
22. Derivative financial instruments (continued)
(c)
Accounting policy (continued)
The Group documents at the inception of the hedging
transaction the relationship between the hedging
instruments and hedged items, as well as its risk
management objective and strategy for undertaking
various hedge transactions. The Group also documents its
assessment, both at hedge inception and on an ongoing
basis, of whether the derivatives that are used in hedging
transactions have been and will continue to be highly
effective in offsetting changes in fair values or cash flows
of hedged items.
Movements in the cash flow hedge reserve in equity are
shown in Note 19. The full fair value of a hedging
derivative is classified as a non-current asset or liability
when the remaining maturity is more than 12 months.
They are classified as current assets or liabilities when the
remaining maturity of the hedged item is less than 12
months. Trading derivatives are classified as current assets
or liabilities.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge
accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are
recognised immediately in the Income Statement.
Cash flow hedges
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income and
accumulated in reserves in equity. The gain or loss relating
to the ineffective portion is recognised immediately in the
Income Statement. Amounts accumulated in equity are
recycled in the Income Statement in the period when the
hedged item impacts the Income Statement.
When a hedging instrument expires or is sold or
terminated, or when a hedge no longer meets the criteria
for hedge accounting, any cumulative gain or loss existing
in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in
the Income Statement. When a forecast transaction is no
longer expected to occur, the cumulative gain or loss that
was reported in equity is immediately transferred to the
Income Statement.
Capital and financial risk management
(a)
Capital risk management
s
e
c
i
d
n
e
p
p
A
The Group’s objectives when managing capital is to
optimise shareholder value through the mix of available
capital sources while complying with statutory
requirements, maintaining gearing, interest cover and
debt serviceability ratios within approved limits and
continuing to operate as a going concern.
58
Ardent Leisure Group Limited | Annual Report 2019
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
The Group assesses its capital management approach as a
key part of the Group’s overall strategy and it is
continuously reviewed by management and the Board.
The Group is able to alter its capital mix by issuing new
shares, activating the DRP, electing to have the DRP
underwritten, adjusting the amount of dividends paid,
activating a share buy-back program or selling assets to
reduce borrowings.
The Group has a target gearing ratio of 30% to 35% of net
debt to net debt plus equity. At 25 June 2019, gearing was
17.78% (2018: 3.18%) and the Group has complied with the
financial covenants of its borrowing facilities in the current
and previous financial years.
Protection of the Group’s equity in foreign denominated
assets was achieved through borrowing in the local
functional currency to provide a natural hedge
supplemented by the use of foreign exchange forward
contracts to provide additional hedge protection. The
Group has a target equity hedge of 50% to 100% of the
asset value by foreign currency.
The Group also protects its equity in assets by taking out
insurance with creditworthy insurers.
(b)
Financial risk management
The Group’s principal financial instruments comprise cash,
receivables, payables, interest bearing liabilities and
derivative financial instruments.
The Group’s activities expose it to a variety of financial risks:
market risk (including foreign exchange risk and interest
rate risk), liquidity risk and credit risk. The Group manages
its exposure to these financial risks in accordance with the
Group’s Financial Risk Management (FRM) policy as
approved by the Board.
The FRM policy sets out the Group’s approach to managing
financial risks, the policies and controls utilised to minimise
the potential impact of these risks on its performance and
the roles and responsibilities of those involved in the
management of these financial risks.
The Group uses various measures to manage exposures to
these types of risks. The main methods include foreign
exchange and interest rate sensitivity analysis, ageing
analysis and counterparty credit assessment and the use of
cash flow forecasts.
The Group uses derivative financial instruments such as
forward foreign exchange contracts, interest rate swaps
and interest rate caps to manage its financial risk as
permitted under the FRM policy. Such instruments are used
exclusively for hedging purposes i.e. not for trading or
speculative purposes.
Notes to the Financial Statements
for the year ended 25 June 2019
23.
Capital and financial risk management (continued)
(c)
(i)
Market risk
Foreign exchange risk
Foreign exchange risk is the risk that changes in foreign exchange rates will change the Australian dollar value of the Group’s
net assets or its Australian dollar earnings.
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a
currency that is not the Group’s functional currency.
The Group is exposed to foreign exchange risk through investing in overseas businesses and deriving operating income from
those businesses. The Group manages this exposure on a consolidated basis.
Foreign investment
The Group aims to minimise the impact of fluctuations in foreign currency exchange rates on its net investments overseas by
funding such investments by borrowing in the local overseas currency or by taking out forward foreign exchange contracts.
The Group’s policy is to hedge 50% to 100% of overseas investments in this way.
s
t
n
e
m
e
t
a
t
S
The table below sets out the Group’s overseas investments, by currency, and how, through the use of forward foreign
exchange contracts, this exposure is reduced. All figures in the table below are shown in Australian dollars with foreign
currency balances translated at the year-end spot rate:
Australian dollars
New Zealand dollars
US dollars
2019
$’000
2018
$’000
2019
$’000
Assets
Cash and cash equivalents
Receivables, inventories and other current assets
Derivative financial instruments
Construction in progress inventories
Investment held at fair value
Property, plant and equipment
Intangible assets
Other non-current assets
Total assets
Liabilities
Current payables and other current liabilities
Construction in progress deposits
Derivative financial instruments
Interest bearing liabilities
Non-current payables and other non-current
liabilities
Total liabilities
63,720
8,705
13
-
2,811
131,889
6,100
23,065
236,303
23,994
-
-
1
1,636
13,890
-
-
2,811
117,461
1,933
21,002
158,733
28,299
-
28
5,600
10,709
34,704
784
34,711
Net assets
201,599
124,022
Notional value of derivatives
-
-
Net exposure to foreign exchange
movements
201,599
124,022
9
-
-
-
-
-
-
-
9
-
-
-
-
-
-
9
-
9
2018
$’000
1,658
9
-
-
-
-
-
-
1,667
27
-
-
-
-
27
2019
$’000
2018
$’000
28,603
20,028
177
578
-
346,752
72,873
-
469,011
57,422
-
505
169,428
13,254
17,008
748
772
-
338,207
68,342
-
438,331
78,668
-
-
22,249
58,162
285,517
18,958
119,875
1,640
183,494
318,456
-
359
364
1,640
183,853
318,820
Ardent Leisure Group Limited | Annual Report 2019
59
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
23. Capital and financial risk management (continued)
(c) Market risk (continued)
(ii)
Foreign exchange rate sensitivity
The table below demonstrates the sensitivity of the above net exposures to reasonably possible changes in foreign exchange
rates, with all other variables held constant. A negative amount in the table reflects a potential net reduction in the profit, or
equity, while a positive amount reflects a potential net increase.
AUD:USD - increase 10%
AUD:USD - decrease 10%
AUD:NZD - increase 10%
AUD:NZD - decrease 10%
Foreign income
Profit movement
2019
$’000
(33)
40
-
-
2018
$’000
(33)
40
-
-
Total equity
movement
2019
$’000
2018
$’000
(16,732)
20,450
(1)
2
(28,984)
35,424
(148)
183
Through investing in overseas assets, the Group earns foreign denominated income. Net operating income derived is
naturally offset by local currency denominated expenses including interest and tax.
From time to time, the Group uses forward foreign exchange contracts to convert this net foreign denominated currency
exposure back to Australian dollars at pre-determined rates out into the future. At reporting date, the Group has no hedging
in place over its foreign income.
(iii)
Interest rate risk
Interest rate risk is the risk that changes in market interest rates will impact the earnings of the Group.
The Group is exposed to interest rate risk predominantly through borrowings. The Group manages this exposure on a
consolidated basis. The Group applies benchmark hedging bands across its differing interest rate exposures and utilises
interest rate swaps and caps, to manage its exposure between these bands. Compliance with the policy is reviewed regularly
by management and is reported to the Board at each meeting.
The Group has exposures to interest rate risk on its net monetary liabilities, mitigated by the use of interest rate swaps and
caps, as shown in the table below:
Floating rates
Cash and cash equivalents
Interest bearing liabilities
Interest rate swaps and interest rate caps
Net interest rate exposure
Refer to Note 22 for further details on the interest rate swaps.
Australian interest
2019
$’000
2018
$’000
US interest
2019
$’000
2018
$’000
63,729
-
63,729
-
63,729
3,294
(5,600)
(2,306)
8,000
5,694
28,603
(179,649)
(151,046)
100,604
(50,442)
13,254
(22,249)
(8,995)
64,725
55,730
60
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
23.
Capital and financial risk management (continued)
(c)
Market risk (continued)
(iv)
Interest rate sensitivity
The table below demonstrates the sensitivity to reasonably possible changes in interest rates, with all other variables
held constant. A negative amount in the table reflects a potential net reduction in the profit or equity, while a positive
amount reflects a potential net increase.
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
1% increase in AUD rate
1% decrease in AUD rate
1% increase in USD rate
1% decrease in USD rate
Profit movement
Total equity
movement
2019
$’000
863
(863)
916
(916)
2018
$’000
283
(283)
1,156
(1,156)
2019
$’000
863
(863)
916
(916)
2018
$’000
283
(283)
1,156
(1,156)
s
t
n
e
m
e
t
a
t
S
At reporting date, the Group has fixed 56.0% (2018: 261.1%) of its floating interest exposure.
(d)
Liquidity risk
Liquidity risk arises if the Group has insufficient liquid assets to meet its short-term obligations. Liquidity risk is managed by
maintaining sufficient cash balances and adequate committed credit facilities. Prudent liquidity management implies
maintaining sufficient cash and marketable shares, the availability of funding through an adequate amount of committed
credit facilities and the ability to close out market positions. The instruments entered into by the Group were selected to
ensure sufficient funds would be available to meet the ongoing cash requirements of the Group.
The following tables provide the contractual maturity of the Group’s fixed and floating rate financial liabilities and derivatives
as at 25 June 2019. The amounts presented represent the future contractual undiscounted principal and interest cash flows
and therefore do not equate to the values shown in the Balance Sheet. Repayments which are subject to notice are treated as
if notice were given immediately.
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
2019
Payables
Term debt
Revolving credit facilities
Current and deferred tax liabilities
Interest rate swaps and caps
Forward foreign exchange
contracts
Total undiscounted financial
liabilities
2018
Payables
Term debt
Interest rate swaps
Forward foreign exchange
contracts
Total undiscounted financial
liabilities
Book
value
$’000
Less than
1 year
$’000
1 to 2
years
$’000
2 to 3
years
$’000
3 to 4
years
$’000
4 to 5
years
$’000
Over 5
years
$’000
Total
$’000
106,798
179,649
69,195
18,345
3,429
17,871
3,482
17,708
3,717
17,546
3,757
23,218
17,383 182,659
106,798
271,512
15,919
328
5,919
(284)
2,997
(120)
2,697
-
2,622
-
2,547
-
-
359
-
-
-
-
-
-
-
16,782
(404)
359
s
e
t
o
N
302,694
93,534
24,177
23,887
23,885
23,687 205,877 395,047
Book
value
$’000
Less than
1 year
$’000
101,717
27,849
(720)
70,295
1,143
(570)
1 to 2
years
$’000
3,182
27,995
19
2 to 3
years
$’000
3,217
-
18
3 to 4
years
$’000
3,267
-
-
4 to 5
years
$’000
3,488
-
-
Over 5
years
$’000
18,268
-
-
Total
$’000
101,717
29,138
(533)
-
270
-
-
-
-
-
270
128,846
71,138
31,196
3,235
3,267
3,488
18,268 130,592
Ardent Leisure Group Limited | Annual Report 2019
61
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
23. Capital and financial risk management (continued)
(e)
Credit risk
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument and will cause the
Group to make a financial loss. The Group has exposure to credit risk on all of its financial assets included in the Group’s Balance
Sheet.
The Group manages credit risk on receivables by performing credit reviews of prospective debtors, obtaining collateral where
appropriate and performing detailed reviews on any debtor arrears. The Group has policies to review the aggregate exposures
of receivables across its portfolio. The Group has no significant concentrations of credit risk on its trade receivables. The Group
holds collateral in the form of security deposits or bank guarantees, over some receivables.
For derivative financial instruments, there is only a credit risk where the contracting entity is liable to pay the Group in the event
of a close out. Similarly, for cash and cash equivalents, there is a credit risk where the contracting entity holds the Group's cash
balances and investments. The Group has policies that limit the amount of credit exposure to any financial institution. Derivative
counterparties and cash investment transactions are limited to investment grade counterparties in accordance with the Group’s
FRM policy. As such, the Group’s exposure to credit losses on derivative financial instruments and cash and cash equivalents is
considered insignificant. The Group monitors the public credit rating of its counterparties.
Credit risk adjustments relating to receivables have been applied in line with the policy set out in Note 10. No fair value
adjustment has been made to derivative financial assets or cash investments, with the impact of credit risk being assessed as
minimal. The Group’s maximum exposure to credit risk is noted in the table below.
Details of the concentration of credit exposure of the Group’s assets are as follows:
Cash and cash equivalents
Receivables - Australia
Receivables - US
Derivative financial instruments
2019
$’000
92,332
7,382
5,142
190
105,046
2018
$’000
16,548
2,939
9,093
748
29,328
All cash, derivative financial instruments and interest bearing receivables are neither past due nor impaired.
The table below shows the ageing analysis of those receivables which are past due or impaired:
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
2019
Receivables - Australia
Receivables - US
2018
Receivables - Australia
Receivables - US
Past due but not impaired
Impaired
Total
Less than 30
days
$’000
31 to 60
days
$’000
61 to 90
days
$’000
More than 90
days
$’000
$’000
$’000
205
22
227
185
239
424
199
508
707
9
428
437
27
9
36
7
28
35
310
117
427
48
5
53
23
-
23
48
-
48
764
656
1,420
297
700
997
Based on a review of receivables by management, a provision of $23,389 (2018: $48,000) has been made against receivables
with a gross balance of $23,389 (2018: $48,000).
The Group holds collateral against the impaired receivables in the form of bank guarantees and security deposits; however,
these are not material.
There are no significant financial assets that have had renegotiated terms that would otherwise have been past due or
impaired.
62
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
Fair value measurement
(a)
Fair value hierarchy
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis:
Derivative financial instruments;
Investment held at fair value; and
Theme Parks land, buildings and major rides and attractions.
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
(a)
(b)
(c)
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or
indirectly (level 2); and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities:
s
t
n
e
m
e
t
a
t
S
2019
Assets measured at fair value:
Investment held at fair value
Property, plant and equipment(1)
Derivative financial instruments
Liabilities measured at fair value:
Derivative financial instruments
Liabilities for which fair values are disclosed:
Interest bearing liabilities (refer to Note 24(c))
2018
Assets measured at fair value:
Investment held at fair value
Property, plant and equipment(1)
Derivative financial instruments
Liabilities measured at fair value:
Derivative financial instruments
Liabilities for which fair values are disclosed:
Interest bearing liabilities (refer to Note 24(c))
(1) Land and buildings and major rides and attractions of the Theme Parks.
Level 1
$’000
Level 2
$’000
Level 3
$’000
-
-
-
-
-
-
-
554
505
179,649
Level 1
$’000
Level 2
$’000
-
-
-
-
-
-
-
748
28
27,849
2,811
130,774
-
-
-
Level 3
$’000
2,811
113,644
-
-
-
Total
$’000
2,811
130,774
554
505
179,649
Total
$’000
2,811
113,644
748
28
27,849
There has been no transfer between level 1, level 2 and level 3 during the year. The investment held at fair value was impaired
by $0.4 million during the prior year, reducing the fair value from $3.2 million to $2.8 million at 26 June 2018. For changes in
level 3 items for the years ended 25 June 2019 and 26 June 2018, refer to Notes 15 and 28.
The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the year.
The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 25 June 2019.
Ardent Leisure Group Limited | Annual Report 2019
63
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
24.
Fair value measurement (continued)
(b)
Valuation techniques used to derive level 2 and level 3 fair values
The fair value of financial instruments that are not traded in an active market (e.g. over–the–counter derivatives) is determined
using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and
rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable,
the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the
instrument is included in level 3.
Specific valuation techniques used to value financial instruments include:
The use of quoted market prices or dealer quotes for similar instruments;
The fair value of interest rate swaps and caps is calculated as the present value of the estimated future cash flows based on
observable yield curves; and
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance date.
All of the resulting fair value estimates are included in level 2 except for unlisted equity shares/securities, where the fair values
have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.
The fair value of Theme Parks land, buildings and major rides and attractions is determined in line with the policy set out in
Note 15, with all resulting fair value estimates included in level 3. The current use is considered to be the highest and best use
for all investment properties in the Group.
(i)
Fair value measurements using significant unobservable inputs
For changes in level 3 items for the periods ended 25 June 2019 and 26 June 2018, refer to Notes 15 and 28.
(ii) Valuation inputs and relationships to fair value
The significant unobservable inputs associated with the valuation of the Group’s property, plant and equipment are discussed
in Notes 15 and 28.
(c)
Fair values of other financial instruments
The Group also has a number of financial instruments which are not measured at fair value in the Balance Sheet. For the
majority of these instruments, the fair values are not materially different to their carrying amounts, since the interest
receivable/payable is either close to the current market rates or the instruments are short term in nature. Differences were
identified for the following instruments at 25 June 2019:
Interest bearing liabilities
Carrying
amount
2019
$’000
179,649
Fair value
2019
$’000
180,734
Discount
rate
2019
%
8.94
Carrying
amount
2018
$’000
27,849
Fair value
2018
$’000
27,851
Discount
rate
2018
%
4.13
In determining the fair value of the interest bearing liabilities, the Group’s principal payable of $179.6 million (2018: $27.8
million) has been discounted at a rate of 8.94% (2018: 4.13%) to best reflect the price that market participants would use when
transferring the non-current borrowings, assuming that market participants act in their economic best interest. They are
classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including the Group’s own
credit risk.
64
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
24.
(d)
Fair value measurement (continued)
Accounting policy
Fair value estimation
The Group measures financial instruments, such as
derivatives and investments held at fair value and non-
financial assets such as land, buildings and major rides and
attractions investment properties at fair value at each
balance date.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The
fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes
place either:
In the principal market for the asset or liability; or
In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be
accessible by the Group.
The fair value of an asset or liability is measured using the
assumptions that market participants would use when
pricing the asset or liability, assuming that market
participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into
account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the
asset in its highest and best use.
The Group uses valuation techniques that are appropriate
in the circumstances and for which sufficient data is
available to measure fair value, maximising the use of
relevant observable inputs and minimising the use of
unobservable inputs.
The fair value of financial instruments traded in active
markets is based on quoted market prices at the reporting
date. The quoted market price used for financial assets
held by the Group is the current bid price; the appropriate
quoted market price for financial liabilities is the current ask
price.
The fair value of financial instruments that are not traded in
an active market is determined using valuation techniques.
The Group uses a variety of methods and makes
assumptions that are based on market conditions existing
at each reporting date. Quoted market prices or dealer
quotes for similar instruments are used for long term debt
instruments held. Other techniques, such as estimated
discounted cash flows, are used to determine fair value for
the remaining financial instruments. The fair value of
interest rate swaps and caps is calculated as the present
value of the estimated future cash flows. The fair value of
forward exchange contracts is determined using forward
exchange market rates at the reporting date.
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
The nominal value less estimated credit adjustments of
trade receivables and payables approximate their fair
values. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future
contractual cash flows at the current market interest rate
that is available to the Group for similar financial
instruments.
Unrecognised items
Contingent liabilities
On 25 October 2016, an incident occurred on the Thunder
River Rapids ride at Dreamworld resulting in four fatalities
at the Theme Park. The incident has been investigated by
the Queensland Police Service and Workplace Health and
Safety Queensland (WHSQ). A Coronial Inquest took place
over several hearings throughout 2018 and has now
concluded. The coroner’s findings and recommendations
are expected to be handed down later in 2019.
Ardent Leisure Limited, as operator of Dreamworld,
expects to be subjected to prosecution action by WHSQ,
however formal proceedings have not been instigated
against Ardent Leisure Limited as at the date of release of
these financial statements. Until such time as proceedings
are commenced, it is too premature to provide any
meaningful or reliable estimate of the quantum or timing
of potential pecuniary penalties. A number of civil claims
by families and other affected persons have been made
against Ardent Leisure Limited and are being dealt with by
the company’s liability insurer. Ardent Leisure Limited
maintains appropriate insurances to respond to all such
litigation and regulatory action and associated costs.
Unless otherwise disclosed in the financial statements, the
Group has no other material contingent liabilities.
s
e
t
o
N
Capital and lease commitments
(a)
Capital commitments
Capital expenditure contracted for at the reporting date
but not recognised as liabilities is as follows:
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
Property, plant and equipment
Payable:
Within one year
(b)
Lease commitments
Non-cancellable operating leases
2019
$’000
2018
$’000
995
995
6,539
6,539
2019
$’000
2018
$’000
624,649
508,337
624,649 508,337
Ardent Leisure Group Limited | Annual Report 2019
65
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
26. Capital and lease commitments (continued)
(b)
Lease commitments (continued)
(i)
Operating leases
The majority of non-cancellable operating leases in the
Group relate to property leases.
Commitments for minimum lease payments in relation to
non-cancellable operating leases are payable as follows:
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
Within one year
Later than one year but not later
than five years
Later than five years
s
t
n
e
m
e
t
a
t
S
2019
$’000
49,660
2018
$’000
43,600
180,391
200,628
374,361
284,346
624,649 508,337
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
(c)
Accounting policy
Where the Group has substantially all the risks and rewards
of ownership, leases of property, plant and equipment are
classified as finance leases. Finance leases are capitalised
at inception at the lower of the fair value of the leased
property and the present value of the minimum lease
payments. The corresponding rental obligations, net of
finance charges, are included in interest bearing liabilities.
Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to the Income
Statement over the lease period so as to produce a
constant periodic rate of interest on the remaining balance
of the liability for each period. The PPE acquired under
finance leases are depreciated over the shorter of the
asset’s useful life and the lease term.
Leases in which a significant portion of the risks and
rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under
operating leases (net of any incentives received from the
lessor) are charged to the Income Statement on a straight-
line basis over the period of the lease. Lease income from
operating leases where the Group is a lessor is recognised
in income on a straight-line basis over the lease term.
(d) Adoption of AASB 16 Leases
A new accounting standard, AASB 16 Leases, is effective for
annual periods beginning on or after 1 January 2019 and
has not been applied in preparing these consolidated
financial statements. The Group is in its final stages of
assessing the impact of AASB 16 on its consolidated
financial statements. This new Standard will be adopted
from 26 June 2019, being the beginning of the next
financial year.
The estimated pre-tax impact on the Balance Sheet as at
26 June 2019 is as follows:
New right-of-use (ROU) assets: Approximately $320 million
Approximately $360 million
New lease liabilities:
66
Ardent Leisure Group Limited | Annual Report 2019
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
Upon adoption, ROU assets and lease liabilities will be
established for existing leases. The nature of expenses
related to these leases will change because AASB 16
replaces the straight-line operating lease expense
with an amortisation charge for ROU assets and an
interest expense on lease liabilities. This is expected to
significantly increase reported EBITDA in future
reporting periods;
ROU assets must be assessed for impairment at
each reporting date. Upon transition to the new
Standard, ROU assets associated with previously
impaired centres will be assessed for impairment.
Any resulting impairment adjustment will be
booked to retained earnings on transition to the
new Standard;
The Group will adopt AASB 16 using the modified
retrospective approach upon transition. The new
Standard will be applied to the next financial period
only and the net effect of the new ROU assets and
liabilities, adjusted for deferred tax will be
recognised in retained earnings on transition. The
impact predominantly relates to the Group’s
property leases for its Main Event centres; and
The Group will apply the practical expedient that
allows for the carry forward of the Group’s previous
assessment under AASB 17 and IFRIC 4 of which
existing contracts are, or contain, leases. The Group
will also apply the practical expedients that allow it
to reassess the term of its leases using the benefit of
hindsight at transition and combine lease and non-
lease components.
Events occurring after reporting date
Since the end of the financial year, the Directors of the
Company are not aware of any other matters or
circumstances not otherwise dealt with in financial report
or the Directors’ report that have significantly affected or
may significantly affect the operations of the Group, the
results of those operations or the state of affairs of the
Group in financial years subsequent to the year ended 25
June 2019.
Other
Investment held at fair value
Investment in Online Media
Holdings Limited
Opening balance
Impairment
Closing balance
2019
$’000
2018
$’000
2,811
2,811
2,811
2,811
2019
$’000
2,811
-
2,811
2018
$’000
3,201
(390)
2,811
Notes to the Financial Statements
for the year ended 25 June 2019
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
28.
Investment held at fair value (continued)
(a)
Accounting policy
(b)
Implementation of AASB 9 Financial Instruments
The investment held at fair value comprises an investment
in unlisted equity shares. Upon initial recognition, the
Group can elect to classify irrevocably its equity
investments as equity instruments designated at fair value
through other comprehensive income (OCI) when they
meet the definition of equity under AASB 132 Financial
Instruments Presentation and are not held for trading. The
classification is determined on an instrument by instrument
basis.
After initial measurement, financial assets at fair value
through OCI are subsequently measured at fair value with
unrealised gains or losses recognised in OCI.
Gains and losses on these financial assets are never
recycled to profit or loss. Dividends are recognised as other
income in the Income Statement when the right of
payment has been established except when the Group
benefits from such proceeds as a recovery of part of the
cost of the financial asset, in which case, such gains are
recorded in OCI. Equity instruments designated at fair value
through OCI are not subject to impairment assessment.
The Group elected to classify irrevocably its non-listed
equity investments under this category.
Provisions
(a)
Distributions to shareholders/security holders
Opening balance
Distributions declared
Distributions paid
Distributions reinvested
Closing balance
As set out in Note 10(b), the Group has applied AASB 9
Financial Instruments from 27 June 2018 on a prospective
basis. The Group has not restated the comparative
information, which continues to be reported under AASB
139. There were no transition adjustments arising from the
adoption of AASB 9.
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
Classification and measurement
The classification and measurement requirements of AASB
9 did not have a significant impact to the Group. The
Group continued measuring at fair value all financial assets
previously held at fair value under AASB 139. The
following are the changes in the classification of the
Group’s financial assets:
s
t
n
e
m
e
t
a
t
S
Equity investments in non-listed companies classified
as Available-for-sale financial assets as at 26 June 2018
are classified and measured as Equity instruments
designated at fair value through OCI from 27 June
2018. The Group has elected to classify irrevocably its
non-listed equity investments under this category at
the date of initial application as it intends to hold
these investments for the foreseeable future.
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
Note
9
17
2019
$’000
-
30,637
(14,305)
(16,332)
-
2018
$’000
-
14,088
(11,101)
(2,987)
-
s
e
t
o
N
Provision is made for the amount of any dividend/distribution declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the financial year but not distributed at the reporting date.
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Ardent Leisure Group Limited | Annual Report 2019
67
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
29. Provisions (continued)
(b)
Other provisions
t
r
o
p
e
R
Current
Employee benefits
Sundry(1)
Total current
Non-current
Employee benefits
Property onerous lease contracts
Property make good obligations
Total non-current
Total provisions
Movements in sundry provisions
Carrying amount at the beginning of the year
Additional provisions recognised
Amounts utilised
Amounts disposed
Carrying amount at the end of the year
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
2019
$’000
1,339
173
1,512
710
3,072
2,180
5,962
7,474
168
219
(214)
-
173
2018
$’000
1,527
168
1,695
731
-
1,920
2,651
4,346
342
408
(429)
(153)
168
(1) Sundry provisions include insurance excess/deductible amounts for public liability insurance, fringe benefits tax provisions and other royalty
provisions.
The current provision for employee benefits includes accrued long service leave which covers all unconditional entitlements
where employees have completed the required period of service and also those where employees are entitled to pro-rata
payments in certain circumstances. This is presented as current, since the Group does not have an unconditional right to defer
settlement for any of these obligations.
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
(c)
Accounting policy
Provisions are recognised when the Group has a present
legal or constructive obligation as a result of past events, it
is probable that an outflow of resources will be required to
settle the obligation, and the amount can be reliably
estimated.
Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a
whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the
same class of obligations may be small.
Provisions are measured at the present value of
management’s best estimate of the expenditure required
to settle the present obligation at the reporting date. The
discount rate used to determine the present value reflects
current market assessments of the time value of money
and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as
interest expense.
Long service leave
The liability for long service leave is recognised in the
provision for employee benefits and measured as the
present value of expected future payments to be made in
respect of services provided by employees up to the
reporting date using the projected unit credit method.
68
Ardent Leisure Group Limited | Annual Report 2019
Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of
service. Where amounts are not expected to be settled
within 12 months, expected future payments are
discounted to their net present value using market yields at
the reporting date on high quality corporate bonds.
The obligations are presented as current liabilities in the
Balance Sheet if the Group does not have an unconditional
right to defer settlement for at least 12 months after the
reporting date, regardless of when the actual settlement is
expected to occur.
Profit sharing and bonus plans
The Group recognises a provision where contractually
obliged or where there is a past practice that has created a
constructive obligation.
Termination benefits
Termination benefits are payable when employment is
terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for
these benefits. The Group recognises termination benefits
when it is demonstrably committed to either terminating
the employment of current employees according to a
detailed formal plan without possibility of withdrawal or to
providing termination benefits as a result of an offer made
to encourage voluntary redundancy. Benefits falling due
more than 12 months after the end of the reporting period
are discounted to present value.
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
Net tangible assets
Net tangible assets are calculated as follows:
Total assets
Less: intangible assets
Less: total liabilities
Net tangible assets
Total number of shares/securities on issue
Net tangible asset backing per share/security
Discontinued operations
(a)
Overview
2019
$’000
705,323
(78,973)
(320,221)
306,129
2018
$’000
598,731
(70,275)
(154,613)
373,843
479,706,016
$0.64
471,344,533
$0.79
In the prior year, the Group disposed of its entire interest in the Bowling & Entertainment business for a sale price of $160.0
million. Completion occurred effective 30 April 2018, resulting in a gain in the period of $20.3 million net of selling costs. The
Bowling & Entertainment business, previously a reportable segment, comprised 43 bowling centres and seven amusement
arcades located in Australia and one bowling centre located in New Zealand.
In the prior year, the Group also disposed of its entire interest in the Marinas business for a sale price of $126.0 million.
Completion occurred effective 14 August 2017, resulting in a gain in the period of $4.7 million net of selling costs. The Marinas
business, previously a reportable segment, comprised seven marinas across New South Wales and Victoria.
(b)
Financial performance
The financial performance for the year ended 25 June 2019 was as follows:
Revenue
Expenses
Profit before income tax
Income tax expense
Profit after income tax of discontinued operations
Costs incurred relating to the sale of the Bowling & Entertainment business
Costs incurred relating to the sale of the Marinas business
Costs incurred relating to the sale of the Health Clubs business
Gain on sale of the Bowling & Entertainment business after tax
Gain on sale of the Marinas business after tax
(Loss)/profit from discontinued operations
Note
2
2
2
31(d)
31(e)
2019
$’000
-
-
-
-
-
(528)
(7)
(77)
-
-
(612)
In the above table, prior year comparatives relate to the Bowling & Entertainment and Marinas businesses.
Cash flow information
(c)
The cash flows for the year ended 25 June 2019 were as follows:
Net cash inflow from operating activities
Net cash (outflow)/inflow from investing activities
Net cash inflow from financing activities
Net (decrease)/increase in cash and cash equivalents
2019
$’000
-
(612)
-
(612)
2018
$’000
125,061
(121,660)
3,401
(131)
3,270
-
-
(133)
20,319
4,668
28,124
2018
$’000
16,877
260,819
12,406
290,102
In the above table, prior year comparatives relate to the Bowling & Entertainment and Marinas businesses.
The net cash inflow from investing activities for the Group for the year ended 26 June 2018 included an inflow net of selling
costs of $159.5 million from the disposal of the Bowling & Entertainment business and an inflow net of selling costs of $121.3
million from the disposal of the Marinas business.
Ardent Leisure Group Limited | Annual Report 2019
69
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
31. Discontinued operations (continued)
(d)
Details of the sale of the Bowling & Entertainment business
(Loss)/gain on sale
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
Consideration received
Base consideration
Cash adjustment for working capital adjustments
Total disposal consideration
Selling costs
Carrying amount of net assets sold
(Loss)/gain on sale before income tax
Income tax expense on (loss)/gain
(Loss)/gain on sale after income tax
Carrying value of assets on sale
The carrying amount of assets and liabilities as at the 30 April 2018 date of sale were:
Cash and cash equivalents
Receivables
Inventories
Property, plant and equipment
Intangible assets
Deferred tax assets
Other assets
Total assets
s
e
t
o
N
Payables
Provisions
Deferred tax liabilities
Total liabilities
Net assets
(e)
Details of the sale of the Marinas business
(Loss)/gain on sale
Consideration received
Base consideration
Cash adjustment for working capital adjustments
Total disposal consideration
Selling costs
Carrying amount of net assets sold
(Loss)/gain on sale before income tax
Income tax expense on (loss)/gain
(Loss)/gain on sale after income tax
s
e
c
i
d
n
e
p
p
A
70
Ardent Leisure Group Limited | Annual Report 2019
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
2019
$’000
-
-
-
(528)
-
(528)
-
(528)
2018
$’000
160,000
4,433
164,433
(4,949)
(139,165)
20,319
-
20,319
30 April 2018
$’000
9,267
3,328
4,098
127,171
26,178
1,744
617
172,403
(25,457)
(6,965)
(816)
(33,238)
139,165
2019
$’000
2018
$’000
-
-
-
(7)
-
(7)
-
(7)
126,000
(2,917)
123,083
(1,766)
(116,649)
4,668
-
4,668
Notes to the Financial Statements
for the year ended 25 June 2019
31.
Discontinued operations (continued)
(e)
Details of the sale of the Marinas business (continued)
Carrying value of assets on sale
The carrying amount of assets and liabilities as at the 14 August 2017 date of sale were:
Cash and cash equivalents
Receivables
Inventories
Property, plant and equipment and investment properties
Other
Total assets
Payables
Provisions
Total liabilities
Net assets
(f)
Accounting policy
Non-current assets (or disposal groups) are classified as
held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through
continuing use and a sale is considered highly probable.
They are measured at the lower of their carrying amount
and fair value less costs to sell, except for assets such as
deferred tax assets, assets arising from employee benefits,
financial assets and investment property that are carried at
fair value and contractual rights under insurance contracts,
which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or
subsequent write-down of the asset (or disposal group) to
fair value less costs to sell. A gain is recognised for any
subsequent increases in fair value less costs to sell of an
asset (or disposal group), but not in excess of any
cumulative impairment loss previously recognised.
A gain or loss not previously recognised by the date of the
sale of the non-current asset (or disposal group) is
recognised at the date of derecognition.
14 August 2017
$’000
3
1,132
143
118,613
693
120,584
(3,864)
(71)
(3,935)
116,649
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
Non-current assets (including those that are part of a
disposal group) are not depreciated or amortised while
they are classified as held for sale. Interest and other
expenses attributable to the liabilities of a disposal group
classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the
assets of a disposal group classified as held for sale are
presented separately from the other assets in the Balance
Sheet. The liabilities of a disposal group classified as held
for sale are presented separately from other liabilities in
the Balance Sheet.
A discontinued operation is a component of the entity
that has been disposed of or is classified as held for sale
and that represents a separate major line of business or
geographical area of operations, is part of a single co-
ordinated plan to dispose of such a line of business or
area of operations, or is a subsidiary acquired exclusively
with a view to resale. The results of discontinued
operations are presented separately in the Income
Statement.
s
e
t
o
N
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Ardent Leisure Group Limited | Annual Report 2019
71
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
Remuneration of auditor
The auditor of the Group in the current year, Ernst & Young (EY), earned the following remuneration:
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
Audit and other assurance services - EY Australia
Audit and other assurance services - related practices of EY Australia
Taxation services - EY Australia
Taxation services - related practices of EY Australia
Other services - EY Australia
Total
Work completed by previous auditor PricewaterhouseCoopers (PwC) related to prior
year
Audit and other assurance services - related practices of PwC Australia
Taxation services - PwC Australia
Taxation services - related practices of PwC Australia
Other services - PwC Australia
Total
Total auditor remuneration
June
2019
$
456,800
231,536
235,155
227,157
189,635
1,340,283
-
-
-
-
-
1,340,283
June
2018
$
448,200
259,939
169,427
135,180
64,044
1,076,790
260
114,477
238,880
76,760
430,377
1,507,167
Equity-based payments
(a)
Deferred Short Term Incentive Plan (DSTI)
Who can participate?
What types of securities are issued?
DSTI
All employees are eligible for participation at the discretion of the Board;
however, Non-Executive Directors do not participate in the DSTI.
Performance rights that can be converted into fully paid shares once
vested. The performance rights differ from options in that they do not
carry an exercise price. Performance rights do not represent physical
securities and do not carry any voting or distribution entitlements.
s
e
t
o
N
What restrictions are there on the securities?
Performance rights are non-transferable.
When can the securities vest?
What are the vesting conditions?
The plan contemplates that the performance rights will vest equally one
year and two years following the grant date.
Plan performance rights will normally vest only if the participant remains
employed by the Group (and is not under notice terminating the contract
of employment from either party) as at the relevant vesting date.
(i)
Equity settled payments
Since the DSTI was approved in July 2010, incentives have
been provided to certain executives under the DSTI.
Under the terms of the DSTI, participants may be granted
performance rights of which one half will vest one year
after grant date and one half will vest two years after grant
date.
s
e
c
i
d
n
e
p
p
A
A total of 436,379 performance rights vested during the
year and a corresponding number of shares/securities
were issued to employees under the terms of the DSTI
(2018: 556,006).
72
Ardent Leisure Group Limited | Annual Report 2019
The characteristics of the DSTI indicate that, at the Group
level, it is an equity settled payment under AASB 2 Share-
based Payment as the holders are entitled to receive shares
as long as they meet the DSTI’s service criteria.
Fair value
The fair value of equity settled performance rights granted
under the DSTI is recognised in the Group financial
statements as an employee benefit expense with a
corresponding increase in equity. The fair value of each
grant of performance rights is determined at grant date
using a binomial tree valuation model and then is
recognised over the vesting period during which
employees become unconditionally entitled to the
underlying shares.
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
Notes to the Financial Statements
for the year ended 25 June 2019
33.
Equity-based payments (continued)
(a)
(i)
Deferred Short Term Incentive Plan (DSTI) (continued)
Equity settled payments (continued)
At each reporting date, the estimate of the number of performance rights that are expected to vest is revised. The employee
benefit expense recognised each financial period takes into account the most recent estimate.
(ii)
Valuation inputs
For the performance rights outstanding at 25 June 2019, the table below shows the fair value of the performance rights on
each grant date as well as the factors used to value the performance rights at the grant date. Under AASB 2, this valuation is
used to value the equity settled performance rights granted to employees at 25 June 2019:
Grant
Grant date
Vesting date – year 1
Vesting date – year 2
Average risk-free rate
Expected price volatility
Expected distribution yield
Share/security price at grant date
Valuation per performance right on issue
2017
29 September 2017
24 August 2018
31 August 2019
2.00% per annum
42.0% per annum
1.6% per annum
$1.82
$1.78
2018
24 June 2019
31 August 2019
31 August 2020
1.50% per annum
32.0% per annum
2.5% per annum
$1.03
$0.98
Grants of performance rights are made annually with the grant date being the date of the issue of the offer letters to employees.
Although the grant date may vary from year to year, the testing period (subject to any hurdles) remains constant with the
vesting date being 24 hours immediately following the announcement of the Group’s full year financial results.
(iii)
Tenure hurdle
The vesting of the performance rights is subject to a tenure hurdle and participants must remain employed by the Group (and
not be under notice terminating the contract of employment from either party) as at the relevant vesting date.
The number of rights outstanding and the grant dates of the rights are shown in the table below:
Grant date
Expiry date
Grant date
Valuation
per right -
ALG
Balance at
the
beginning
of the year
Exercise
price
Granted
Exercised
Failed to
vest
Cancelled
23 Aug 2016 24 Aug 2018 $Nil
29 Sep 2017 31 Aug 2019 $Nil
24 Jun 2019 31 Aug 2020 $Nil
231.8 cents
177.5 cents
98.3 cents
109,679
426,144
-
-
-
54,331
(109,679)
(283,977)
-
-
-
-
535,823
54,331
(393,656)
-
-
-
-
-
Balance at
the end of
the year
-
142,167
54,331
196,498
s
e
t
o
N
The rights have an average maturity of six months.
(b)
Long Term Incentive Plan (LTIP)
Who can participate?
All executives are eligible for participation at the discretion of the Board.
What types of securities are issued?
The LTIP is typically granted in the form of performance rights that can be converted
into fully paid shares when and if vested. Performance rights do not carry any voting or
distribution entitlements.
What restrictions are there on the
securities?
Performance rights are non-transferable. Executives may not hedge any portion of their
unvested awards.
Ardent Leisure Group Limited | Annual Report 2019
73
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
33.
Equity-based payments (continued)
(b)
Long Term Incentive Plan (LTIP) (continued)
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
Is there a performance gateway?
t
r
o
p
e
R
For any rights to vest under the LTIP, an initial gateway performance hurdle must be
met or exceeded. The gateway hurdle is a minimum return on equity target equal to or
greater than 2.5x the 10 year bond yield rate for Australian Government bonds.
When can the performance rights
vest?
The plan contemplates that the performance rights will vest equally two, three and four
years following the grant date, subject to making vesting conditions.
What are the vesting conditions for
Australian employees?
Assuming the performance gateway is achieved, whether the performance rights that
can vest do in fact vest is determined as follows:
50% is subject to a relative total shareholder return (TSR) performance hurdle; and
50% is subject to a compound earnings per share (EPS) performance hurdle.
What are the vesting conditions for
US employees?
Assuming the performance gateway is achieved, whether the performance rights that
can vest do in fact vest is determined as follows:
What is relative TSR and how is it
measured?
1/3rd is subject to a relative TSR performance hurdle;
1/3rd is subject to a compound EPS performance hurdle; and
1/3rd vests automatically provided the executive has remained in continuous
employment since the date of grant.
Relative TSR is the total return an investor would receive over a set period of time,
assuming that all distributions were reinvested in the Group’s securities, measured
against the return of an external benchmark. The relative TSR definition takes account
of both capital growth and distributions.
Relative TSR is measured against the S&P/ASX 200 Industrials Index over the
performance period. Relative TSR performance is measured by an independent third
party. The vesting schedule for the portion of the grant subject to the relative TSR
performance condition is as follows:
The vesting scale is as follows:
Relative TSR performance
Below 50th percentile
50th percentile
Between 50th percentile and 75th percentile
75th percentile or higher
Proportion of performance rights vesting
0%
50%
Straight-line vesting
between 50% and 100%
100%
What is EPS and how is EPS
measured?
The EPS hurdle refers to the compound annual growth of earnings (CAGR) per security
over the vesting period.
The vesting schedule for the portion of the grant subject to EPS performance is as
follows:
FY16 and FY17 grants
Below 5%
5%
Between 5% and 10%
10% or higher
FY18 grant
Below 8%
8%
Between 8% and 13%
13% or higher
Proportion of performance rights vesting
0%
50%
Straight-line vesting
between 50% and 100%
100%
0%
50%
Straight-line vesting
between 50% and 100%
100%
74
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
33.
(b)
(i)
Equity-based payments (continued)
Long Term Incentive Plan (LTIP) (continued)
Equity settled payments
Since 1 July 2009, long term incentives have been provided to certain executives under the LTIP. Under the terms of the LTIP
and the initial grant, employees may be granted performance rights which vest in accordance with the terms set out in the
table above. The percentage of performance rights which may vest is subject to the TSR performance of the Group relative to
its peer group, which is the S&P/ASX Small Industrials Index.
During the year, the relative TSR and EPS performance of the Group was tested in accordance with the LTIP for tranches issued
in 2013, 2014 and 2015 with the following results:
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
Tranche
T3-2013
T2-2014
T1-2015
TSR
Percentile
Vesting
percentage
(13.86%)
2.14%
2.08%
30.25
40.91
32.00
-
-
-
Group CAGR
EPS
n/a1
(133.84%)
n/a1
Vesting
percentage
-
-
-
s
t
n
e
m
e
t
a
t
S
(1) Mathematically, CAGR cannot be computed when there is a positive EPS in the first year, a negative EPS in the last year and an even number of years over
which it is being measured. However, as EPS has declined over the measurement period, it has by definition failed to meet the minimum vesting hurdle.
A total of 78,422 performance rights vested on 24 August 2018 and a corresponding number of shares/securities were issued
to employees under the terms of the LTIP (2018: 125,142).
The characteristics of the LTIP indicate that, at the Group level, it is an equity settled payment under AASB 2 Share-based
Payment as the holders are entitled to the shares/securities as long as they meet the LTIP’s service and performance criteria.
Fair value
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
The fair value of the equity settled performance rights granted under the LTIP is recognised in the Group financial statements
as an employee benefit expense with a corresponding increase in equity. The fair value of the performance rights is
determined at grant date using a Monte Carlo simulation valuation model and then is recognised over the vesting period
during which employees become unconditionally entitled to the underlying shares/securities.
At each reporting date, the estimate of the number of performance rights that are expected to vest is revised. The employee
benefit expense recognised each financial period takes into account the most recent estimate.
(ii)
Valuation inputs
For performance rights outstanding at 25 June 2019, the table below shows the fair value of the performance rights on each
grant date as well as the factors used to value the performance rights at the grant date. Under AASB 2, this valuation is used
to value the equity settled performance rights granted to employees at 25 June 2019:
s
e
t
o
N
Grant
Grant date
Vesting date – year 2
Vesting date – year 3
Vesting date – year 4
Average risk-free rate
Expected price volatility
Expected distribution yield
Stapled security price at grant date
Valuation per performance right
on issue
US employees
Australian employees
2015
15 December 2015
5 September 2017
24 August 2018
31 August 2019
2.10% per annum
38.3% per annum
5.8% per annum
$2.17
2016
23 August 2016
24 August 2018
31 August 2019
31 August 2020
1.40% per annum
40.0% per annum
5.0% per annum
$2.50
2017
29 September 2017
31 August 2019
31 August 2020
31 August 2021
2.00% per annum
42.0% per annum
1.6% per annum
$2.50
$1.06
$1.06
$1.51
$1.51
$0.65
$0.19
Grants of performance rights are made annually with the grant date being the date of the issue of the offer letters to employees.
Although the grant date may vary from year to year, the testing period (subject to any hurdles) remains constant with the
vesting date being 24 hours immediately following the announcement of the Group’s full year financial results.
Ardent Leisure Group Limited | Annual Report 2019
75
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
33.
Equity-based payments (continued)
(b)
Long Term Incentive Plan (LTIP) (continued)
(iii) Performance hurdles
In order for any or all of the performance rights to vest under the LTIP, the Group's Gateway, TSR and/or the EPS performance
hurdles as set out above must be met. The number of rights outstanding and the grant dates of the rights are shown in the table
below:
Grant date
Expiry date
Exercise
price
Grant date
valuation
per right
Balance at the
beginning of
the year
Granted
Exercised
vest Cancelled
Failed to
Balance at
the end of
the year
19 Aug 2014 31 Aug 2018 $Nil
15 Dec 2015 31 Aug 2019 $Nil
23 Aug 2016 31 Aug 2020 $Nil
29 Sep 2017 31 Aug 2021 $Nil
131.7 cents
106.1 cents
151.9 cents
47.5 cents
s
t
n
e
m
e
t
a
t
S
114,463
364,875
332,344
1,524,181
2,335,863
-
-
-
-
-
-
-
182,438
-
173,530
-
(74,822)
(177,178) 1,272,181
(74,822) (383,663) (249,229) 1,628,149
(114,463)
(182,437)
(86,763)
-
-
-
(72,051)
The rights have an average maturity of 10 months.
The expense recorded in the Group financial statements in the year in relation to the DSTI and LTIP performance rights was
$7,255 (2018: $227,775).
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
76
Ardent Leisure Group Limited | Annual Report 2019
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
Notes to the Financial Statements
for the year ended 25 June 2019
Related party disclosures
(a)
Directors
The following persons have held office as Directors of the Company and, prior to the corporate restructure, were Directors of
Ardent Leisure Management Limited (Manager) (as responsible entity for the Trust) and Ardent Leisure Limited during the
period and up to the date of this report unless otherwise stated:
Gary Weiss AM;
David Haslingden;
Randy Garfield;
Brad Richmond;
Antonia Korsanos (appointed 1 July 2018);
Don Morris AO (resigned 31 May 2019); and
Roger Davis (resigned 17 August 2018).
(b)
Parent entity
The immediate and ultimate parent entity of the Group is Ardent Leisure Group Limited.
(c)
Key controlled entities
These financial statements incorporate the assets, liabilities and results of the following wholly-owned key subsidiaries in
accordance with the accounting policy disclosure as described in Note 1:
Entity
Activity
Controlled entities of Ardent Leisure Group Limited:
Ardent Leisure Trust
Theme parks
Ardent Leisure Limited
Main Event Holdings, Inc
Theme parks, Corporate
Family entertainment centres
Country of
establishment
Class of equity
securities
Australia
Australia
USA
Ordinary
Ordinary
Ordinary
(d)
(i)
Transactions with related parties
Key management personnel
Short term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
2019
$
3,175,826
80,063
88,067
59,612
3,403,568
2018
$
3,362,937
96,716
1,676,008
(391,492)
4,744,169
s
e
t
o
N
Remuneration of key management personnel (KMP) is shown in the Directors’ report from pages 12 to 23.
(e)
Loans to KMP
There were no loans to KMP during the financial year or prior corresponding period.
(f)
Other transactions with KMP
Any agreements entered have been on normal commercial bases and fees and transactions have been based on normal
commercial terms and conditions.
No Director has entered into a material contract with the Group and there were no material contracts involving Directors’
interests existing at year end not previously disclosed.
Ardent Leisure Group Limited | Annual Report 2019
77
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Notes to the Financial Statements
for the year ended 25 June 2019
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
34. Related party disclosures (continued)
(g)
Transactions with related parties
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
r
e
h
t
O
All transactions with related parties were made on normal commercial terms and conditions and at market rates, except that
there are no fixed terms for the repayment of loans between the parties. Outstanding balances are unsecured and are repayable
in cash. The terms and conditions of the tax funding agreement are set out in Note 6(f). The transactions incurred in the year
with controlled entities were as follows:
Purchases of goods
Purchase of services from related parties
Reimbursable expenses to related parties
Parent entity financial information
2019
$
2018
$
-
(145,277)
(39,941)
(77,088)
Subsequent to the destapling and corporatisation of the Group, effective 24 December 2018, the parent entity of the Group is
Ardent Leisure Group Limited.
(a)
Summary financial information
2019
$’000
1,729
778,853
-
-
777,124
1,729
778,853
1,729
1,729
Ardent Leisure Group Limited expects to be subjected to
prosecution action by WHSQ, however formal proceedings
have not been instigated against the Company as at the
date of release of these financial statements. A number of
civil claims by families and other affected persons have
been made against the Company and are being dealt with
by the Company’s liability insurer.
Until such time as proceedings are commenced, it is too
premature to provide any meaningful or reliable estimate
of the quantum of potential pecuniary penalties. Ardent
Leisure Limited maintains appropriate insurances to
respond to litigation and regulatory action and a
proportion of associated costs.
Unless otherwise disclosed in the financial statements,
Ardent Leisure Group Limited has no other material
contingent liabilities.
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Equity
Contributed equity
Retained earnings
Total equity
Profit for the period
Total comprehensive profit for the period
(b)
Guarantees
There are no material guarantees entered into by Ardent
Leisure Group Limited in relation to the debts of its
subsidiaries.
(c)
Contingent liabilities
On 25 October 2016, an incident occurred on the Thunder
River Rapids ride at Dreamworld resulting in four fatalities
at the Theme Park. The incident was investigated
throughout 2017 by the Queensland Police Service and
Workplace Health and Safety Queensland (WHSQ). A
Coronial Inquest took place over several hearings
throughout 2018 and has now concluded. The coroner’s
findings and recommendations are expected to be
handed down later in 2019.
78
Ardent Leisure Group Limited | Annual Report 2019
Notes to the Financial Statements
for the year ended 25 June 2019
35.
(d)
Parent entity financial information (continued)
Contractual commitments for the acquisition of
property, plant and equipment
Capital expenditure contracted for at the reporting date
but not recognised as liabilities is as follows:
Property, plant and equipment
Payable:
Within one year
2019
$’000
2018
$’000
-
-
-
-
(e)
Accounting policy
The financial information for the parent entity of the Group
(Ardent Leisure Group Limited and, in the prior year, Ardent
Leisure Trust) has been prepared on the same basis as the
consolidated financial statements, except as set out below:
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the
financial statements of the parent entity. Dividends
received from subsidiaries are recognised as income in the
parent entity’s income statement.
Tax consolidation legislation
Ardent Leisure Group Limited and its wholly-owned
Australian controlled entities have implemented the tax
consolidation legislation. The head entity, Ardent Leisure
Group Limited, and the controlled entities in the tax
consolidated group account for their own current and
deferred tax amounts. These tax amounts are measured as
if each entity in the tax consolidated group continues to be
a standalone taxpayer in its own right.
In addition to its own current and deferred tax amounts,
Ardent Leisure Group Limited also recognises the current
tax liabilities (or assets) and the deferred tax assets arising
from unused tax losses and unused tax credits assumed
from controlled entities in the tax consolidated group.
The entities are also in the process of entering into a tax
funding agreement, effective for the year ended 25 June
2019, under which the wholly-owned entities fully
compensate Ardent Leisure Group Limited for any current
tax payable assumed and are compensated by Ardent
Leisure Group Limited for any current tax receivable and
deferred tax assets relating to unused tax losses or unused
tax credits that are transferred to Ardent Leisure Group
Limited under the tax consolidation legislation. The
funding amounts are determined by reference to the
amounts recognised in the wholly-owned entities'
financial statements.
The amounts receivable/payable under the tax funding
agreement are due upon receipt of the funding advice
from the head entity, which is issued as soon as
practicable after the end of each financial year. The head
entity may also require payment of interim funding
amounts to assist with its obligations to pay tax
instalments.
Assets or liabilities arising under tax funding agreements
with the tax consolidated entities are recognised as
current amounts receivable from or payable to other
entities in the group. Any difference between the
amounts assumed and amounts receivable or payable
under the tax funding agreement are recognised as a
contribution to (or distribution from) wholly-owned tax
consolidated entities.
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
e
c
n
a
m
r
o
f
r
e
P
l
a
t
i
p
a
c
g
n
k
r
o
W
i
s
t
e
s
s
a
m
r
e
t
g
n
o
L
y
t
i
u
q
e
d
n
a
t
b
e
D
t
n
e
m
e
g
a
n
a
M
k
s
i
R
l
a
i
c
n
a
n
F
i
s
m
e
t
i
d
e
s
i
n
g
o
c
e
r
n
U
s
e
c
i
d
n
e
p
p
A
r
e
h
t
O
Ardent Leisure Group Limited | Annual Report 2019
79
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent Auditor's Report to the members of Ardent Leisure Group
Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Ardent Leisure Group Limited (the Company) and its controlled entities (collectively the
Group), which comprises the consolidated balance sheet as at 25 June 2019, the consolidated income statement, statement of
comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes to the financial
statements, including a summary of significant accounting policies, and the director’s declaration.
In our opinion, the accompanying financial report is in accordance with the Corporations Act 2001, including:
a)
giving a true and fair view of the consolidated financial position of the Group as at 25 June 2019 and of their financial
performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report.
We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report
of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our
audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to
our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2
1. Valuation of Theme Parks
Why significant
How our audit addressed the key audit matter
Theme Park assets are carried in the Group’s balance sheet
at 25 June 2019 at $130,774,000.
Our audit procedures included the following:
- We considered the competence, capability and
The Directors engaged an external valuation expert at 25
December 2018 to assist in the valuation of Theme Park
assets and for the 25 June 2019 financial statements, the
Group performed the valuation internally. The valuations
are based upon a number of assumptions which are
judgmental in nature, including cash flow forecasts,
discount rates and growth rates.
We considered this to be a key audit matter given the asset
value and the significant unobservable inputs associated
with the valuation as described in Note 15.
objectivity of the external and internal valuation experts
and evaluated the scope and methodology they used in
their valuations.
- We involved our real estate valuation specialists to assist
us in evaluating the appropriateness of the methodology
and the reasonableness of certain key assumptions used
in the Group’s external and internal valuations.
- We tested the mathematical accuracy of cash flow
models and agreed relevant data used by the external
and internal valuation expert to Board approved budgets
for the 2020 financial year.
- We also considered the historical accuracy of both the
Group and the external valuation expert in forecasting
future cash flows and growth rates.
- We assessed the adequacy of the Group’s disclosures in
respect of asset carrying values, key assumptions and
sensitivity analysis in Note 15 to the financial
statements.
2.Dreamworld Contingencies
Why significant
How our audit addressed the key audit matter
On 25 October 2016, an accident occurred on the Thunder River
Rapids ride at the Dreamworld theme park which resulted in four
fatalities.
Our audit procedures included the following:
- We considered the status of each key legal and
regulatory matter.
Following this incident, Ardent Leisure Limited (now a controlled
entity of Ardent Leisure Group Limited) and certain other
controlled entities are party to legal proceedings, including civil,
regulatory investigation by Workplace Health and Safety
Queensland (WHSQ) and an ongoing coronial inquest
investigation.
The coronial inquest proceedings are ongoing and timing of
completion of this investigation and subsequent issuance of any
report is not yet certain. Until such time that the Group has a
present or clear constructive obligation that can be estimated
reliably, no provisions have been recognised.
We considered this to be a key audit matter due to the
significance of these ongoing matters and the inherent risk that
legal exposures are not identified, recorded and/or disclosed in
the financial report. The recognition of provisions and the basis
of measurement and the disclosure of contingent liabilities
required significant judgement.
Note 14 Payables and Note 25 Contingent Liabilities contains
disclosures and accounting policies related to provisions and
(contingent) liabilities related to this incident.
- We considered the responses we received to our
requests of the Group’s external lawyers related to
these matters and inspected relevant regulatory,
litigation, and insurance documents.
- We considered whether any financial obligations exist,
and assessed the extent to which provisions and related
note disclosures may be required based on the facts and
circumstances available.
- We considered events and information that arose
subsequent to balance date relating to these matters.
- We considered whether the disclosures of the
application of judgement in estimating provisions and
disclosing contingent liabilities adequately reflected the
uncertainties associated with the legal and regulatory
matters.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
3
3. Valuation of Property Plant and Equipment at Main Event
Why significant
How our audit addressed the key audit matter
The Group has $346,752,000 of property, plant and
equipment held at cost as at 25 June 2019 related
to Main Event.
The Group performed an impairment test at 25 June
2019 related to the recoverability of property, plant
and equipment at each Main Event location. This
resulted in an impairment loss of $12,224,000
being recognised.
Our audit procedures included the following:
- We considered the reasonableness of the cash flows used in the model as
follows:
- We assessed the historical accuracy of cash flow forecasting.
- We compared the cash flows used in the model to Board
approved budgets and forecasts, including projections of future
growth and capital expenditure.
- We tested the mathematical accuracy of the discounted cash
flow model.
This was considered a key audit matter due to the
significance of property, plant and equipment and
the judgmental nature of the assumptions
underlying the discounted cash flows used in
determining the recoverable amount.
Note 15 of the financial report discusses the
accounting policy related to these assets.
- We considered the assumptions in respect of the discount rate used in the
model, as follows:
- We agreed key inputs to externally-derived data where
appropriate.
- We conducted our own assessments with respect to other key
inputs, such as projected growth and certain market and site-
specific factors that contribute to cash flow forecasting risk.
Our valuation specialists assisted in assessing the overall
discount rate used in the model with reference to internally
developed benchmarks which are based on market data and
industry research.
-
4. Valuation of Goodwill at Main Event
Why significant
How our audit addressed the key audit matter
The Group has $59,950,000 million of goodwill
related to the Main Event cash generating unit
(CGU).
Our audit procedures included the following:
- We assessed the identification of CGUs with reference to the requirements
of Australian accounting standards.
The Group performed an impairment test as at 25
June 2019 which concluded that no impairment
was required.
This was considered a key audit matter due to the
relative size of the goodwill balance and the
judgmental nature of the assumptions underlying
the discounted cash flows used in determining the
recoverable amount.
Note 16 of the financial report discusses the
accounting policy related to these assets and
discloses the sensitivity of these valuations to
changes in key assumptions.
- We considered the reasonableness of the cash flows used in the model as
follows:
- We assessed the historical accuracy of cash flow forecasting,
- We compared the cash flows used in the model to approved budgets
and forecasts, including projections of future growth and capital
expenditure.
- We tested the mathematical accuracy of the discounted cash flow
model.
- We considered the assumptions in respect of the discount rate used in the
model, as follows:
- We agreed key inputs to externally-derived data where appropriate.
- We conducted our own assessments with respect to other key inputs,
such as projected growth and certain market and CGU-specific factors
that contribute to cash flow forecasting risk.
Our valuation specialists assisted in assessing the overall discount rate
used in the model with reference to internally developed benchmarks
which are based on market data and industry research.
-
- We performed scenario-specific sensitivity tests including changes to the
discount rate, forecast cash flows and projected capital expenditure.
- We evaluated whether the disclosures concerning sensitivities to changes in
key assumptions reflected the risks inherent in the valuation of goodwill as
well as our knowledge of the business.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
4
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information included in the Company’s
2019 Annual Report, but does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance
conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance
with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Company’s and Group’s ability to continue as a
going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Company or Group or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial
report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s or the Group’s
internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Company’s or Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company or the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the
financial report represents the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance
of the Group audit. We remain solely responsible for our audit opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
5
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the
financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 23 of the directors' report for the year ended 25 June 2019.
In our opinion, the Remuneration Report of Ardent Leisure Group Limited for the year ended 25 June 2019, complies with section
300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with
section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our
audit conducted in accordance with Australian Auditing Standards.
Ernst & Young
John Robinson
Partner
Sydney
22 August 2019
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
Investor Analysis
Investor Relations
Investor Analysis
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
KAYAAL PTY LTD
PORTFOLIO SERVICES PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
UBS NOMINEES PTY LTD
CS THIRD NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
RAGUSA PTY LTD
INVESTEC AUSTRALIA LIMITED
RAGUSA PTY LTD
AUST EXECUTOR TRUSTEES LTD
CITICORP NOMINEES PTY LIMITED
NEWECONOMY COM AU NOMINEES PTY LIMITED
BALNAVES FOUNDATION PTY LTD
PORTFOLIO SERVICES PTY LTD
RAGUSA PTY LTD
Top investors as at 22 August 2019
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
Balance of register
Grand total
No. of shares
98,905,198
81,385,387
41,778,825
22,672,159
21,277,233
19,666,758
19,526,233
12,882,398
11,696,788
10,529,312
10,207,055
5,089,794
3,116,458
3,060,409
2,160,252
1,905,046
1,808,366
1,795,243
1,291,598
1,259,780
372,014,292
107,691,724
479,706,016
Range report as at 22 August 2019
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
No. of shares
400,563,680
57,963,432
11,617,711
8,637,335
923,858
479,706,016
% No. of holders
135
2,152
1,527
3,093
2,305
9,212
83.50
12.08
2.42
1.80
0.2
100.00
The total number of investors with an unmarketable parcel of 160,782 shares as at 22 August 2019 was 1,289.
%
20.62
16.97
8.71
4.73
4.44
4.1
4.07
2.69
2.44
2.19
2.13
1.06
0.65
0.64
0.45
0.4
0.38
0.37
0.27
0.26
77.55
22.45
100.00
%
1.47
23.36
16.58
33.57
25.02
100.00
Voting rights
In accordance with the Company’s Constitution, each member present at a meeting, whether in person, by proxy, by power of
attorney or by a duly authorised representative in the case of a corporate member, shall have one vote on a show of hands and
one vote for each fully paid ordinary share on a poll.
On-market buy-back
There is no current on-market-buy-back.
Substantial shareholder notices received as at 22 August 2019
%
The Ariadne Substantial Holder Group*
14.71%
Viburnum Funds Pty Ltd
14.48%
FIL Ltd
6.33%
Sun Hung Kia Global Opportunities
6.20%
13.59%
Sumitomo Mitsui Trust Holdings Inc
* The Ariadne Substantial Holder Group includes the following companies and partnerships – Portfolio Services Pty Limited, Ariadne Holdings Pty
Limited, Ariadne Australia Limited, Bivaru Pty Limited and Kayaal Pty Ltd.
No. of shares
70,549,826
69,458,451
30,389,058
29,751,780
65,207,895
86
Ardent Leisure Group Limited | Annual Report 2019
Investor Relations and Corporate
Directory
Corporate Governance Statement
Company
Investor Relations and Corporate Directory
In accordance with the ASX Listing Rules, the Group’s
Corporate Governance Statement is published and located
in the Corporate Governance page of the Group’s website
(http://www.ardentleisure.com.au/Company/Corporate-
Governance.aspx). A copy has also been provided to the
ASX.
Contact details
Security registry
To access information on your holding or to
update/change your details, contact:
Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
Telephone
1300 720 560 (within Australia)
+61 1300 720 560 (outside Australia)
Facsimile
+61 2 9287 0303
Website
www.linkmarketservices.com.au
Email
registrars@linkmarketservices.com.au
All other enquiries relating to your Ardent Leisure Group
Limited investment can be directed to:
Ardent Leisure Group Limited
ABN 51 628 881 603
Registered office
Level 8, 60 Miller Street
North Sydney NSW 2060
Directors
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
Antonia Korsanos (appointed 1 July 2018)
Don Morris AO (resigned 31 May 2019)
Roger Davis (resigned 17 August 2018)
Group Chief Financial Officer
Darin Harper
Company Secretary
Bronwyn Weir
ASX code
ALG
Auditor of the Group
Ernst & Young
200 George Street
Sydney NSW 2000
Ardent Leisure Group Limited
PO Box 1927
North Sydney NSW 2059
Telephone
+61 2 9168 4600
Facsimile
+61 2 9168 4601
Email
investor.relations@ardentleisure.com
Website
www.ardentleisure.com
Ardent Leisure Group Limited | Annual Report 2019
87
s
t
n
e
t
n
o
C
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
s
t
n
e
m
e
t
a
t
S
l
i
a
i
c
n
a
n
F
d
e
t
a
d
i
l
o
s
n
o
C
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A