Ardent Leisure Group Limited
Annual Financial Report
for the year ended 28 June 2022
The financial report was authorised for issue by the Directors of Ardent Leisure Group Limited (ABN 51 628 881 603)
on 24 August 2022. The Directors have the power to amend and reissue the financial report.
Message from the Chairman
Dear Shareholders,
I am pleased to present to you the Annual Report of Ardent Leisure Group Limited for the year ended 28 June
2022.
The FY22 year was another significant year in the Ardent Leisure journey, with the Group agreeing to sell
its main undertaking, the US-based chain of 51 Main Event family entertainment centres, to NASDAQ
listed Dave & Buster’s for US$835 million on a cash-free debt-free basis. The transaction (which completed
on 30 June 2022 shortly following year end) was overwhelming supported by Ardent shareholders and
reflected the significant value creation achieved by Ardent and the Main Event management team
particularly over the past four years. On behalf of my fellow Directors, I would again like to thank the Main
Event management team for their significant contribution over recent years to achieve this result.
Pleasingly for shareholders, the Main Event sale allowed Ardent to make a significant distribution to
shareholders of 95 cents per share in the form of a return of capital and special dividend which were both
paid on 13 July 2022. It has also allowed the Company to retain a substantial amount of capital to direct
towards the continued recovery of, and investment in, its Theme Parks & Attractions business.
Whilst the Theme Parks & Attractions business was heavily impacted by the prolonged border closures during
the first half of the year, the subsequent easing of restrictions and the tireless work of management to
successfully launch the Steel Taipan rollercoaster in December 2021 and optimise a number of special events
and activations resulted in increased demand in both local and interstate markets during the second half of
FY22 and has seen the business achieve some of its best trading results in recent years.
Both the Board and management have a positive outlook for the business which is well positioned to benefit
from further potential upside in the tourism sector, underpinned by the reopening of Australia’s economy
and its international borders, along with some exciting projects in the pipeline. We now have the financial
ability and capacity to ensure that the recovery and investment program and recent positive change in
trajectory seen in the Theme Parks & Attractions business are fully leveraged for further success.
The Company is now solely focused on maximising the performance of its Theme Parks & Attractions business
and, as an endorsement of this direction, has today announced that Theme Parks CEO Greg Yong will also
lead the Ardent Leisure Group in the role of Group CEO.
On behalf of the Board, I would like to express my deep gratitude to our team members as they continue to
demonstrate resilience and work hard through challenging times together . I would also like to thank our
shareholders and other stakeholders for their ongoing support of the Group.
Dr Gary Weiss AM
Chairman
Ardent Leisure Group Limited
Annual Financial Report
Balance Sheet
Directors’ Report
Income Statement
Basis of preparation
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Financial Statements
Statement of Comprehensive Income
Segment information
Revenue from operating activities
Other income
Finance costs
Other expenses
Taxation
Cash flow information
Losses per share
2
29
30
31
32
33
34
34
Overview
34
1.
37
Performance
37
2.
40
3.
40
4.
41
5.
41
6.
41
7.
46
8.
9.
48
10. Distributions and dividends paid and payable 48
48
Working capital
48
11.
Receivables
49
12.
Inventories
49
13. Other assets
49
14.
Payables
50
Long term assets
50
15.
52
16.
55
Debt and equity
55
17. Contributed equity
55
18.
55
19. Accumulated losses
56
20.
58
21.
Property, plant and equipment
Intangible assets
Interest bearing liabilities
Leases
Reserves
Fair value measurement
Events occurring after reporting date
Financial risk management
22. Derivative financial instruments
23. Capital and financial risk management
24.
Unrecognised items
25. Contingent liabilities
26. Capital commitments
27.
Other
28.
Business combinations
29.
Provisions
30. Net tangible assets
31. Discontinued operations
32. Deed of Cross Guarantee
33.
Remuneration of auditor
34.
Equity-based payments
35.
Related party disclosures
36.
Parent entity financial information
Directors’ declaration to shareholders
Independent auditor’s report to shareholders
Investor Analysis
Investor Relations and Corporate Directory
60
60
61
66
69
69
69
69
69
69
70
71
71
73
77
77
82
83
85
86
90
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Ardent Leisure Group Limited | Annual Report 2022
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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 28 June 2022 (FY22).
Ardent Leisure Group Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business are Suite 601, Level 6, 83 Mount Street, North Sydney, NSW 2060.
Directors
1.
The following persons have held office as Directors of the Company during the period and up to the date of this report unless
otherwise stated:
Gary Weiss AM;
David Haslingden;
Randy Garfield;
Brad Richmond; and
Erin Wallace (appointed 1 January 2022).
2.
Principal activities
The Group’s principal activity is to invest in and operate leisure and entertainment businesses. During the current and prior
years, these activities were carried out in Australia and the Unites States of America. Following the sale of the Main Event
business after the reporting date, the Group’s future focus will be on its remaining Australian Theme Parks & Attractions
business. Other than the sale of Main Event, there have been no other significant changes in the nature of the activities of the
Group.
3.
Dividends and capital distributions
On 30 June 2022, the Directors of the Group determined to pay an unfranked special dividend of $234.7 million (or 48.9301
cents per share) and a return of capital of $221.0 million (or 46.0699 cents per share) (together, the ‘Distribution’), reflecting a
significant portion of the net proceeds from the sale of Main Event. The total Distribution amounting to $455.7 million was
paid on 13 July 2022. A provision has not been recognised in the financial statements at 28 June 2022 as the Distribution had
not been declared at the reporting date.
4.
Operating and financial review
Overview
The Group’s strategy is to focus primarily on leisure and entertainment segments within its geographical areas of operation.
During the year, two businesses contributed to the overall result: Main Event and Theme Parks & Attractions.
Sale of Main Event business
On 6 April 2022, the Group announced that, together with RedBird Capital Partners (the Group’s co-investor in Main Event), it
had entered into a binding sale agreement and plan of merger with Dave & Buster’s Entertainment Inc for the sale of the
entire Main Event business for total gross cash consideration of US$835 million (excluding purchase price adjustments and
selling costs) plus up to US$14.8 million deferred and contingent consideration (the ‘Transaction’).
Completion of the Transaction occurred after the reporting date, on 30 June 2022. Prior to completion, the Group received a
pre-sale dividend of US$20.4 million (net of US$3.6 million US federal withholding tax) and, on completion, the Group
received cash proceeds of US$453.9 million for its share of the business. Additional post-completion proceeds of
approximately US$11.4 million (subject to finalisation of working capital adjustments) are expected to be received within 90-
120 days of completion.
The results of the Main Event business have been presented as a discontinued operation at 28 June 2022 and associated
assets and liabilities have been classified as held-for-sale. The sale will be accounted for, and the gain reflected, in the FY23
financial statements. It is not possible to disclose details of the gain arising from the sale in these financial statements as the
assessment of working capital adjustments and deferred contingent consideration is yet to be finalised.
2
Ardent Leisure Group Limited | Annual Report 2022
Directors’ Report
4.
Operating and financial review (continued)
Acquisition of The Summit family entertainment centres
On 3 March 2022, the Group announced that Main Event had completed the acquisition of three family entertainment centres
in Colorado operating as 'The Summit'. The three centres, located within the Denver and Colorado Springs markets, provided
Main Event with an immediate penetration into one of the business’ target trade areas, along with its existing centre located in
the Denver market.
The total purchase price (inclusive of working capital adjustments) was US$75.4 million. This was funded from existing available
liquidity within Main Event of US$25.2 million and the sale and leaseback of land and buildings relating to these centres, which
yielded proceeds of US$50.2 million.
Shareholder class action
As reported in prior periods, on 18 June 2020, the Company was served with a representative shareholder class action arising
from the 2016 Dreamworld tragedy. The claim alleges contraventions of the Corporations Act 2001 (Cth). The Company has
indicated since the action was commenced, and continues to maintain, that it considers the proceedings to be without merit
and is vigorously defending them, and therefore does not provide any estimate of potential liability (if any at all). The Company
maintains appropriate insurances to respond to litigation and the majority of associated costs.
A small number of civil claims relating to the 2016 Dreamworld tragedy have yet to be finalised. They are in the process of being
dealt with by the Company’s liability insurer. The statutory time period for bringing any further civil claims has passed.
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Ardent Leisure Group Limited | Annual Report 2022
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Directors’ Report
4.
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 30 June 2021
to 28 June 2022 (364 days), was as follows:
30 June 2021 to 28 June 2022
Segment revenue
Operating EBITDA
Costs associated with the sale of Main Event
Segment EBITDA
Depreciation and amortisation
Amortisation of lease assets
Segment EBIT
Borrowing costs
Lease liability interest expense
Interest income
Loss before tax
Income tax benefit/(expense)
Net loss after tax
The segment EBITDA above has been
impacted by the following specific items:
Reversal of impairment of property, plant and
equipment and lease-right-of-use assets
Early termination of leases
Pre-opening expenses
Dreamworld incident insurance recoveries, net of
costs
Summit business acquisition costs
Main Event LTI plan valuation expense
RedBird option valuation expense
Main Event sale costs
Unrealised derivative losses on hedging of Main
Event sale proceeds
Restructuring and other non-recurring items
Lease payments no longer recognised in EBITDA
under AASB 16 Leases
Net loss on disposal of assets
The net loss after tax above has also been
impacted by the following specific items:
Lease asset amortisation and lease interest
expense recognised under AASB 16 Leases
Tax losses for which deferred tax asset not
recognised
Tax deductible temporary differences for which
deferred tax asset not recognised
Tax impact of specific items listed above
Theme Parks
& Attractions
$’000
49,459
(14,447)
-
(14,447)
(8,091)
(94)
(22,632)
Corporate
$’000
-
(8,088)
(32,895)
(40,983)
(74)
(76)
(41,133)
Continuing
operations
$’000
Discontinued
operations
Main Event
$’000
49,459
(22,535)
(32,895)
(55,430)
(8,165)
(170)
(63,765)
(1,781)
(18)
31
(65,533)
4,062
(61,471)
-
-
-
516
-
-
-
-
-
-
-
-
-
-
-
-
Total
$’000
637,559
176,670
(131,149)
45,521
(50,375)
(20,486)
(25,340)
(34,593)
(39,634)
87
(99,480)
2,049
(97,431)
8,184
925
(6,300)
516
(185)
(83,392)
(7,547)
(7,315)
(32,895)
(299)
588,100
199,205
(98,254)
100,951
(42,210)
(20,316)
38,425
(32,812)
(39,616)
56
(33,947)
(2,013)
(35,960)
8,184
925
(6,300)
-
(185)
(83,392)
(7,547)
(7,315)
-
(299)
(32,895)
-
(32,895)
-
78
-
(32,817)
188
(94)
(32,285)
50,202
(64)
(45,791)
50,390
(158)
(78,076)
-
-
-
516
-
-
-
-
-
-
110
(94)
532
(108)
(80)
(188)
(59,932)
(60,120)
(7,968)
(3,512)
(11,480)
(4,037)
(15,517)
316
(127)
(7,887)
(204)
9,869
6,073
112
9,742
(1,814)
-
20,668
(43,301)
112
30,410
(45,115)
4
Ardent Leisure Group Limited | Annual Report 2022
Directors’ Report
4.
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 2020
to 29 June 2021 (364 days), was as follows:
1 July 2020 to 29 June 2021
Segment revenue
Segment EBITDA
Depreciation and amortisation
Amortisation of lease assets
Segment EBIT
Borrowing costs
Lease liability interest expense
Interest income
Loss before tax
Income tax (expense)/benefit
Net loss after tax
The segment EBITDA above has been
impacted by the following specific items:
Net impairment of property, plant and
equipment and lease right-of-use assets
Early termination of leases
Pre-opening expenses
Dreamworld incident costs, net of insurance
recoveries
Restructuring and other non-recurring items
Main Event LTI plan valuation expense
RedBird option valuation expense
Lease payments no longer recognised in EBITDA
under AASB 16 Leases
Net loss on disposal of assets
The net loss after tax above has also been
impacted by the following specific items:
Lease asset amortisation and lease interest
expense recognised under AASB 16 Leases
Tax losses for which deferred tax asset not
recognised
Tax deductible temporary differences for which
deferred tax asset not recognised
Tax impact of specific items listed above
Theme Parks
& Attractions
$’000
36,012
(11,097)
(7,710)
(64)
(18,871)
Corporate
$’000
-
(5,927)
(306)
(110)
(6,343)
Continuing
operations
$’000
36,012
(17,024)
(8,016)
(174)
(25,214)
(1,707)
(4)
37
(26,888)
(8)
(26,896)
Discontinued
operations
Main Event
$’000
354,655
84,302
(52,720)
(24,837)
6,745
(33,056)
(34,346)
-
(60,657)
620
(60,037)
-
-
-
(850)
-
-
-
85
(11)
(776)
-
-
-
-
50
-
-
156
(30)
176
-
-
-
(850)
50
-
-
241
(41)
(600)
(4,089)
(1,308)
(578)
-
(4,168)
(2,314)
(682)
47,710
(272)
34,299
Total
$’000
390,667
67,278
(60,736)
(25,011)
(18,469)
(34,763)
(34,350)
37
(87,545)
612
(86,933)
(4,089)
(1,308)
(578)
(850)
(4,118)
(2,314)
(682)
47,951
(313)
33,699
(65)
(113)
(178)
(59,183)
(59,361)
(5,654)
(1,955)
(7,609)
(10,086)
(17,695)
649
252
(4,818)
(49)
(19)
(2,136)
600
233
(6,954)
-
5,226
(64,043)
600
5,459
(70,997)
The Group reported a net loss after tax of $97.4 million for
the year ended 28 June 2022, compared to a net loss of
$86.9 million in the prior year. The increased loss is largely
due to the current year being impacted by several one-off
significant expenses, including a number of material costs
associated with the sale of the Main Event business. These
were largely timing related, being recognised in the current
year ahead of the sale which completed after the reporting
date. Notwithstanding these large one-off costs, there were
strong trading performances in both businesses despite
the ongoing impacts of the pandemic.
Total segment revenue for the Group of $637.6 million
(excluding other income from government grants/
subsidies and insurance recoveries) increased by $246.9
million in the year. This was above FY19 pre-COVID
revenues of $483.3 million, driven primarily by continued
strong recovery momentum in Main Event as well as
improved visitation in the Australian Theme Parks &
Attractions business.
Ardent Leisure Group Limited | Annual Report 2022
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Directors’ Report
4.
Operating and financial review (continued)
Group results (continued)
As noted in the table above, the Group’s results were
impacted by a number of significant items. Excluding these
significant items, the Group reported EBITDA of $123.6
million, up $90.0 million on the prior year.
The year-on-year performance of the Group was driven
primarily by the following factors:
•
•
Increased revenue and Operating EBITDA in Main Event
due to strong constant centre performance (exceeding
pre-COVID levels), incremental revenue from four new
centres that were opened in FY22 and three Summit
centres acquired in March 2022 and recovery of
Corporate/ Events business. The improved performance
was also impacted by the lapping of a second wave of the
pandemic and winter storms in the prior year, which
resulted in the closure of several centres in FY21;
Improved trading performance in Theme Parks &
Attractions due to increased attendances, driven by
higher pass sales and successful events activations,
particularly in the second half of the year, combined
with the business cycling the temporary closure of its
sites in the prior year due to COVID-19;
• A $3.8 million reduction in restructuring and other non-
recurring items due to the prior year being impacted by
additional RedBird transaction costs, write-off of US site
exploration costs as well as COVID-19 related costs;
• A $0.9 million credit in the current year relating to the
early termination of Main Event leases (FY21: $1.3
million expense);
• $0.5 million net insurance recoveries in relation to the
Dreamworld incident and subsequent shareholder class
action, compared to a $0.9 million expense in the prior
year;
• An $8.2 million reversal of impairment on property,
plant and equipment and lease right-of-use assets
relating to two Main Event centres resulting from an
impairment assessment of Main Event’s assets which
was carried out immediately prior to these assets being
classified as held-for-sale. This is compared to a $4.1
million impairment of lease right-of-use assets relating
to a Main Event centre reported in the prior year;
• A reduction of $10.4 million in depreciation and
amortisation and $4.5 million in amortisation of lease
right-of-use assets as these expenses ceased being
recorded in accordance with accounting standards
when Main Event assets were classified as assets held
for sale in early April 2022 and;
6
Ardent Leisure Group Limited | Annual Report 2022
• A $1.4 million increase in tax benefit due to:
- Higher tax benefit arising in the current year due to
the larger reported pre-tax losses in FY22; and
- A $1.7 million reduction in tax expense associated
with Australian and US tax losses and deductible
temporary differences for which deferred tax assets
have not been recognised. The recoverability of
these losses and temporary differences against
future taxable income is not currently considered
probable under AASB 112 Income Taxes
These factors were partially offset by:
• A $32.9 million unrealised loss on derivatives relating to
the deal-contingent foreign exchange forward contracts
put in place to hedge the Main Event sale proceeds, due
to a devaluation of the Australian dollar against the US
dollar (FY21: Nil);
• An expense of $83.4 million for revaluation of the Main
Event LTI plan liability (FY21: $2.3 million) and $7.5
million for revaluation of the Redbird option liability
(FY21: $0.7 million), reflecting the significant
incremental equity value of Main Event which was
expected to be, and was, realised on the sale of the
business subsequent to the reporting date;
• $7.3 million costs associated with the sale of Main
Event, which include consulting and other services
provided by legal, tax and independent experts;
• $0.2 million costs associated with the acquisition of
three Colorado-based Summit centres by Main Event in
March 2022;
• A $5.7 million uplift in pre-opening expenses, with four
new Main Event centres opened during the current
year compared to one new centre in the prior year;
• An $8.7 million reduction in net benefit from
government support funding received by the
Australian businesses due to the Australian Federal
Government’s JobKeeper wage subsidy programme
ending in March 2021; and
• An increase of $5.3 million in lease interest mainly due to
new and acquired centres in Main Event.
Directors’ Report
4.
Operating and financial review (continued)
Theme Parks & Attractions
The performance of Theme Parks & Attractions is summarised as follows:
Total revenue
EBRITDA(2)
Property costs
EBITDA
Depreciation and amortisation
EBIT
Attendance
Per capita spend ($)
2022
$’000
49,459
(13,751)
(696)
(14,447)
(8,185)
(22,632)
880,833
56.15
2021
$’000
36,012
(10,438)
(659)
(11,097)
(7,774)
(18,871)
743,860
48.41
Change
%
37.3
(31.7)
(5.6)
(30.2)
(5.3)
(19.9)
18.4
16.0
(1) Earnings before property costs (predominantly land taxes and council rates), interest, tax, depreciation and amortisation
The Theme Parks business, consisting of Dreamworld,
WhiteWater World and SkyPoint, reported trading revenue
of $49.5 million for the year, up 37.3% on the prior year. This
was mainly due to higher pass sales and attendances in the
current period, combined with the cycling of the temporary
closure of SkyPoint and Dreamworld/ WhiteWater World in
the prior year due to COVID-19 (sites reopened on 10 July
2020 and 16 September 2020, respectively).
Continuing international and domestic border restrictions, as
well as snap lockdowns, adversely impacted visitation during
the first half of the year. Following the reopening of
Queensland borders in early December 2021, interstate
travel became possible but continued to be disrupted by the
fast-spreading Omicron variant and Queensland
government travel and COVID-19 testing restrictions which
led to some consumer hesitancy to travel.
Since these restrictions eased, the business has shown
positive signs of recovery, with stronger visitation during
the peak school holiday periods in January and April 2022.
This has resulted in FY22 total visitation being 18.4% up on
the prior year and the value of annual passes sold in the
current year exceeding the prior year by approximately
44%.
Main Event
In addition to the annual Winterfest and Happy Halloween
events which saw record attendance levels, the business
executed several new activations to drive repeat visitation,
including the Spring County Fair, Dreamworld Street Food
Festival and Moonlight Night Markets. The business also
recorded its best Easter holiday trading performance in
recent years.
The division recorded an EBITDA loss of $14.4 million,
compared to a loss of $11.1 million in the prior year. The
business received a $2.0 million Major Tourism Experience
Hardship grant during FY22, a decrease compared to $10.5
million of net benefits from government subsidies and
grants (mostly JobKeeper) in the prior year. Excluding these
one-off grants and subsidies, EBITDA improved by $5.2
million compared to the prior year.
The Steel Taipan multi-launch rollercoaster which was
successfully opened in December 2021 continues to be one
of the main attractions for Dreamworld and has been well
received by the guests. The business is optimistic that the
recovery in domestic and international tourism, as well as
various guest initiatives implemented by management will
continue to attract visitation to the venues and drive
continued recovery momentum.
The performance of Main Event in US dollars is summarised as follows:
Total revenue
EBRITDA(1)
Property costs
Operating EBITDA
Costs associated with the sale of Main Event (2)
EBITDA
Depreciation and amortisation
EBIT
2022
US$’000
426,181
154,798
(10,600)
144,198
(68,971)
75,227
(45,965)
29,262
2021
US$’000
266,871
76,832
(12,518)
64,314
-
64,314
(57,895)
6,419
Change
%
59.7
101.5
15.3
124.2
n/a
17.0
20.6
355.9
(1) Earnings before property costs (predominantly land taxes and maintenance costs), interest, tax, depreciation and amortisation.
(2) One-off costs associated with the sale of Main Event, including transaction costs, valuation expenses relating the Main Event LTI plan and RedBird
option and unrealised derivative losses on hedging of US dollar sale proceeds.
Ardent Leisure Group Limited | Annual Report 2022
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Directors’ Report
4.
Operating and financial review (continued)
Main Event (continued)
Constant centres(2)
Non-constant centres
New centres opened/acquired in FY22
Corporate and regional office
expenses/sales and marketing
Other specific items
Total
Revenue
2022
US$’000
302,527
96,075
27,579
Revenue
2021
US$’000
214,497
52,374
-
Change
%
41.0
83.4
n/a
426,181
266,871
59.7
EBRITDA(1)
2022
US$’000
145,517
45,100
12,899
(49,389)
671
154,798
EBRITDA
2021
US$’000
100,316
22,537
-
(36,905)
(9,116)
76,832
Change
%
45.1
100.1
n/a
(33.8)
107.4
101.5
(1) EBRITDA for FY22 is shown excluding $69.0 million of costs associated with the Main Event sale to enable like-for-like comparison of performance to
On 6 April 2022, the Group announced that, together with
RedBird Capital Partners, it had entered into a binding sale
agreement and plan of merger with Dave & Buster’s
Entertainment Inc for the sale of Main Event on a cash-free
debt-free basis for total gross cash consideration of US$835
million (excluding purchase price adjustments and selling
costs) plus up to US$14.8 million deferred and contingent
consideration. Completion of the Transaction occurred on
30 June 2022.
Strategic focus
Following completion of the sale of Main Event, the Group
is solely focused on its Australian Theme Parks & Attractions
business.
(i)
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 repeat visitation.
Investments are targeted to drive visitation and must be
economically responsible. This includes plans to install
major new attractions at Dreamworld to increase visitation
and drive average per capita spend.
The wellbeing of Dreamworld’s staff also remains a key focus,
with a number of wellness, support and training programs in
place to assist and develop individual team members.
The Group sees potential for considerable value in the
excess land that surrounds the Dreamworld site. The park
currently occupies just over 50% of the owned land and the
process to ascertain the best use of this land and optimise
value for shareholders is ongoing.
the prior year.
(2) Constant centres comprise 33 centres.
Main Event reported revenue for the year of US$426.2
million, which was 59.7% higher than the prior year. This
was driven by ongoing strong performance in both
constant and non-constant centres, as well as incremental
revenue from seven newly opened and acquired centres. In
Australian dollar terms, Main Event revenue increased by
65.8% compared to the prior year, reflecting favourable
movements in foreign exchange rates.
The first eight months of the prior year were significantly
impacted by soft trading performances due to the second
wave of the pandemic in the US in November/December
2020 and winter storms in February 2021 which resulted in
closure of several sites. However, the business recovered
strongly from March 2021 onwards, benefitting from strong
consumer demand and successful execution of several
strategic initiatives including an improved guest experience,
technology and entertainment innovation, and effective
marketing. As a result, total and walk-in constant centre
revenues for FY22 have exceeded pre-COVID levels.
During the year, four new Main Event centres were opened
and performed above expectations. In addition, in March
2022, the business acquired three stand-alone ‘Summit’
family entertainment centres located within the Denver
and Colorado Springs markets. These new sites brought the
number of centres to 51 across 17 States as at 28 June 2022
(29 June 2021: 44 centres across 16 States).
At a trading level, Main Event recorded an Operating
EBITDA of US$144.2 million, representing an increase of
124.2% compared to the prior year. This strong operational
performance was, however, partly offset by US$69.0 million
of one-off costs associated with the sale of Main Event,
including transaction costs and valuation expenses relating
to the Main Event LTI plan and RedBird option.
In addition to the one-off sale-related expenses, the current
and prior year EBITDA results were also impacted by a
number of other specific items including lease termination
costs, pre-opening costs, loss on disposal of assets, non-
recurring restructuring expenses, impairment/reversal of
impairment of assets and lease payments no longer
recognised in EBITDA under AASB 16 Leases. Including the
above costs, the business reported a statutory EBITDA of
US$75.2 million (2021: US$64.3 million).
8
Ardent Leisure Group Limited | Annual Report 2022
Directors’ Report
5.
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.
6.
Interests in the Group
The movement in shares of the Group during the year is set out below:
Shares on issue at the beginning of the year
Shares on issue at the end of the year
7.
Information on Directors
Gary Weiss AM
Non-Executive Chairman
Appointed:
Ardent Leisure Group Limited – 18 September 2018
Age: 69
Dr Gary Weiss is currently the Executive Director of Ariadne
Australia Limited. He is Chairman of Estia Health Limited
and Cromwell Property Group and is a Non-Executive
Director of Thorney Opportunities Limited and Hearts and
Minds Investments Limited.
Gary was appointed a Member (AM) of the Order of
Australia in 2019 and is also a Commissioner of the
Australian Rugby League Commission.
Gary was formerly Chairman of Ridley Corporation Limited,
ClearView Wealth Limited and Coats Group Plc, is a former
Non-Executive Director of Premier Investments Limited,
Pro-Pac Packaging Limited, The Straits Trading Company
Limited, a former executive director of Whitlam, Turnbull &
Co and Guinness Peat Group plc and sat on the board of
Westfield Holdings 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.
Gary 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 and a
member of the Audit & Risk Committee and Remuneration
& Nomination Committee.
Former listed directorships in the last three years:
Ridley Corporation Limited (21 June 2010 to 26 August 2020)
The Straits Trading Company Limited (1 June 2014 to 30
September 2020)
Interest in shares:
45,844,317
2022
2021
479,706,016
479,706,016
479,706,016
479,706,016
David Haslingden
Non-Executive Director
Appointed:
Ardent Leisure Group Limited – 18 September 2018
Age: 61
David Haslingden brings to the Board considerable
international business experience, particularly in North
America and Europe.
David is a director and major shareholder of RACAT Group,
a company that owns and operates several media and
mobile games companies in Australia and overseas. 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. David 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:
None
Interest in shares:
523,980
Ardent Leisure Group | Annual Report 2022
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7.
Information on Directors (continued)
Randy Garfield
Non-Executive Director
Appointed:
Brad Richmond
Non-Executive Director
Appointed:
Ardent Leisure Group Limited – 18 September 2018
Ardent Leisure Group Limited – 18 September 2018
Age: 70
Age: 63
Brad Richmond 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 previously 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 Audit & Risk Committee and a member
of the Remuneration & Nomination Committee.
Former listed directorships in the last three years:
None
Interest in shares:
820,403
During his 50 year travel industry career, Randy 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 and 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 preopening and launch and, for the following three
years during which he also served in a leadership 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,
Destination Canada, Saudi Tourism Authority and Family
Travel Association.
Previous board roles include Deep Blue Communications,
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
and Audit & Risk Committee.
Former listed directorships in the last three years:
None
Interest in shares:
55,000
10
Ardent Leisure Group Limited | Annual Report 2022
Directors’ Report
7.
Information on Directors (continued)
Erin Wallace
Non-Executive Director
Appointed:
Ardent Leisure Group Limited – 1 January 2022
Age: 62
Erin Wallace brings to the Board extensive experience as a
senior executive in operations management, the hospitality
and theme park industries and business process
improvement.
Erin is the former Chief Operating Officer at Great Wolf
Resorts, Inc., a role she held from 2016 through 2019. In this
role she was responsible for leading more than 9,000
employees at 18 lodges throughout the United States.
Great Wolf Resorts, Inc. is America’s largest family of indoor
water park resorts and has over seven million guests a year.
Before joining Great Wolf Resorts, Inc., Erin was the Chief
Operating Office of Learning Care Group, Inc. from
February 2015 to August 2016, where she led more than
16,000 employees in delivering operational excellence to
the families served at more than 900 schools throughout its
umbrella of five brands.
Prior to that, Erin’s 30 year career at the Walt Disney
Company spanned many roles in Theme Parks and Resorts
concluding with Executive Vice President of Operations
Strategy, Planning, Revenue Management and Decision
Sciences, encompassing all of Disney Parks’ domestic and
international sites. After joining Disney as an industrial
engineer in 1985, Erin’s roles included Senior vice President
of Walt Disney World Operations where she oversaw the
largest and most popular resort destination in the world,
Vice President of Walt Disney World’s Magic Kingdom and
General Manager for Disney’s Animal Kingdom and
Disney’s All-Star Resort.
9. Meetings of Directors
Erin is a Distinguished Alumni at the University of Florida
where she graduated with honours and a BSIE, and an MBA
from The Crummer School of Business at Rollins College.
Erin is a current Director and Chair of the Governance
Committee at FirstService (FSV) and is a Trustee of Rollins
College.
Former listed directorships in the last three years:
None
Interest in shares:
None
8.
Company Secretary
The Group’s Company Secretary is Chris Todd. Chris was
appointed to the position of Company Secretary on 20
January 2021 and has acted as Group General Counsel
since March 2014.
Chris holds a Bachelor of Laws and a Bachelor of
Commerce from the University of Queensland and has
over 20 years’ experience as a lawyer, both in private
practice and in-house roles.
The attendance at meetings of Directors of the Group during the year is set out in the following table:
Full meetings
of Directors
Audit & Risk
Meetings of Committees
Remuneration &
Nomination
Safety & Risk Review
E1
8
8
8
8
5
A2
8
8
8
8
5
E1
4
**
4
4
**
A2
4
**
4
4
**
E1
2
2
**
2
**
A2
2
2
**
2
**
E1
4
4
4
**
**
A2
4
3
4
**
**
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
Erin Wallace
(1) Eligible to attend.
(2) Attended.
** Not a member of the relevant committee.
Ardent Leisure Group Limited | Annual Report 2022
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Directors’ Report
10. Remuneration report
Introduction from the Chair of the Remuneration
& Nomination Committee
The Directors of Ardent Leisure Group Limited present the
FY22 Remuneration Report, which outlines the Group’s
approach to remuneration of its Directors and Executive
Key Management Personnel (KMP).
Review of FY22 performance
After challenging prior periods due to COVID-19, the Group
was pleased to start this year with optimism amid
encouraging signs of recovery in both businesses.
The strong momentum in the Main Event business, which
started in March 2021, continued throughout the current
year with the business consistently performing above pre-
COVID levels. The strong recovery of the business, growth
in constant centre performance and addition of seven new
centres (including the three Summit sites acquired in March
2022), helped drive record revenues and significant
incremental value.
Over the past four years, Main Event expanded its centre
footprint by over 30% and more than doubled its EBITDA.
The sale of this business on 30 June 2022 realised
significant value for the Group’s shareholders, who voted
overwhelmingly in support of the transaction.
In Australia, the Theme Parks & Attractions business
continued to be impacted by the pandemic, particularly in
the first half. However, following the reopening of
Queensland borders, easing of restrictions and the opening
of the new Steel Taipan rollercoaster in December 2021,
the business has seen growth in local and interstate
markets. This, combined with several successful event
activations, has helped drive strong pass sales and positive
guest sentiment.
Remuneration outcomes for FY22
In recognition of the significant outperformance of Main
Event against agreed financial KPIs and strategic, safety,
employee engagement and guest satisfaction objectives
during the year, the Board of the US based holding
company of Main Event awarded stretch bonus payments
to Chris Morris and Darin Harper for FY22. The Ardent
Leisure Board supported these stretch bonus payments.
In addition, LTI awards for Mr Morris and Mr Harper vested
in full upon the sale of the Main Event business on 30 June
2022 in accordance with the Main Event LTI Plan terms and
conditions and Mr Morris’ and Mr Harper’s contractual
entitlements as outlined in the 2021 remuneration report.
The quantum of the LTI payments was calculated by
reference to the pre agreed Plan formula, with no further
Board discretion applied in determining the outcomes. The
payments reflect and reward the significant value creation
that has been achieved by the Main Event management
team for the benefit of the Main Event shareholders (being
Ardent Leisure and RedBird Capital) and ultimately all of
the Ardent Leisure shareholders.
12
Ardent Leisure Group Limited | Annual Report 2022
On completion of this transaction, the equity value of Main
Event was estimated to be US$738.6 million, representing
an appreciation in value of US$408.6 million, or 123.8%
over the LTI Grant Date Valuation of US$330.0 million as at
the date that RedBird Capital invested in the business. This
has contributed towards a 40.6% appreciation in the
Group’s share price over the last financial year.
The aggregate payments to all LTI plan participants upon
closing of the transaction was disclosed in the Notice of
Meeting dated 30 May 2022, seeking shareholder approval
for the sale of Main Event. This approval was obtained
resoundingly at the 29 June 2022 EGM, with 99.7% of votes
in favour of the proposed transaction.
In relation to the Theme Parks business, the Board agreed
to a bonus payment to Greg Yong for FY22 in recognition
of substantial achievement of agreed financial KPIs and full
achievement of strategic initiatives encompassing,
regulatory compliance, risk management, new park
development and public relations.
Board and Committee changes
In January 2022, Erin Wallace joined the Board as an
Independent Non-Executive Director.
Erin has extensive experience as a senior executive in
operations management and the hospitality and theme
park industries. Almost 30 years of this experience was
gained at The Walt Disney Company across various roles,
including as Executive Vice President of Operations
Strategy, Planning and Revenue Management, working
with all of Disney Parks' domestic and international sites.
Ms. Wallace was most recently the Chief Operating Officer
at Great Wolf Resorts, Inc., which operates North America’s
largest family of indoor water park resorts.
Erin’s experience and expertise in the leisure and out-of-
home entertainment sector is considered particularly
invaluable for our Theme Parks & Attractions business in
Australia as it focuses on its recovery and a return to
historical earnings.
No changes were made during the year to the composition
of the three Board Committees. However, considering the
recent disposal of the Main Event business, the Board will
review the optimal composition of these Committees.
Looking towards the future
Following the sale of Main Event, Ardent Leisure is now
solely focused on its Theme Parks & Attractions business
and is well positioned to benefit from the ongoing recovery
of the Australian tourism economy.
With no debt and a strong cash position, we are now well
positioned to support continued investment in new major
rides/attractions, to pursue opportunities for unlocking
value in the parks’ surplus land and to accelerate of growth
in the business.
Directors’ Report
10.
Remuneration report (continued)
Introduction from the Chair of the Remuneration &
Nomination Committee (continued)
Looking towards the future (continued)
The business has an experienced management team with
proven capability to execute on its recovery and
investment strategy. Significant progress on safety,
business transformation and revenue generation initiatives
over recent years has begun to bear fruit, with encouraging
sales in the second half of FY22.
Looking ahead to FY23, while there remains some ongoing
uncertainty regarding the pandemic and global economic
conditions, recent trends in the business have been
pleasing and the Board is optimistic that the momentum of
improvement will continue into next year.
The sale of Main Event provided the opportunity to
restructure the remaining Australian long term incentive
scheme to make it more suitable to Australian market
practices and the Board’s long-term strategy.
Consequently, following a recent review by the
Remuneration Committee of the cash-settled LTI Plan for
Theme Parks executives that has been in place since 2019,
the Board has resolved in FY23 to replace that plan with an
equity based plan with effect from the commencement of
FY23. The new LTI Plan is more reflective of current market
practice, and we believe will appropriately incentivise
executives to deliver consistent growth in revenue, thereby
aligning their interests with those of the business and
Ardent Leisure shareholders. The key elements of the new
Theme Parks LTI Plan are set out in section 10(c)(iv) of this
Remuneration Report.
The Board remains committed to ensuring that the Group
will emerge a stronger and more efficient organisation that
continues to provide our team members with a safe
working environment and our guests with safe and
memorable family entertainment experiences.
On behalf of the Board, I would like to acknowledge and
thank our management and team members for their
continuing hard work and dedication during the past year.
David Haslingden
Chair, Remuneration & Nomination Committee
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Directors’ Report
10.
Remuneration report (continued)
The remuneration report for the Group for the year ended 28 June 2022 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.
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23
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 28 June 2022, the KMP for the Group
comprised the following:
Position
Executive KMP
Name
President and CEO – Main Event
Group Chief Financial Officer
Chris Morris
Darin Harper
CEO – Theme Parks & Attractions
Greg Yong
Non-Executive Directors
Chairman
Lead Independent director
Independent director
Independent director
Independent director
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
Erin Wallace (appointed 1 January 2022)
Primary location of
employment
US-based
US-based
Australian-based
Australian-based
Australian-based
US-based
US-based
US-based
(i)
Changes to KMP effective after the end of the reporting period
Upon completion of the sale of Main Event on 30 June 2022, Chris Morris and Darin Harper ceased to be key management
personnel of Ardent Leisure.
14
Ardent Leisure Group Limited | Annual Report 2022
Directors’ Report
10.
Remuneration report (continued)
(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 against 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.
The Group did not engage any consultants to provide remuneration recommendations in relation to any of the above services
during the year.
(c)
(i)
Remuneration framework
Remuneration structure
The executive remuneration framework in place during the year ended 28 June 2022 has three components:
Annual base salary
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 business.
Short term incentive (STI)
One-year performance period award paid in
cash for individual and business performance.
Long term incentive (LTI)
One-time cash award for long term
performance of the businesses.
Base salaries are reviewed annually to ensure that they remain
competitive with the external market, however no Executive KMP is
entitled to a guaranteed pay increase.
An annual cash bonus determined by performance against financial
targets, advancement of strategic initiatives and/or personal key
performance indicators (KPIs).
A one-time cash reward linked to the future appreciation in Equity
Value of the Main Event business, or Enterprise Value of the Theme
Parks & Attractions business, over and above threshold amounts.
These plans are designed to drive profitable business growth and
deliver strong returns on capital invested.
Awards were initially granted to executives under both plans in
FY19.
However, as part of the investment into Main Event by private equity
partner RedBird Capital in FY21 (at a time when the business was
substantially impacted by COVID-19) negotiated amendments to the
Main Event LTI Plan were required to ensure that the incentivisation
of management to drive performance through (and beyond) the
pandemic more closely aligned with the investment return
requirements of RedBird Capital.
The Board has resolved since the end of the period to replace the cash-
based plan with an equity-based plan with effect from the
commencement of FY23. The key elements of the new Theme Parks LTI
Plan are set out in section 10(c)(iv) of this Remuneration Report. It will
replace the old LTI Plan and all interests in that plan (including those
that would have vested in FY22) will extinguish.
Ardent Leisure Group Limited | Annual Report 2022
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10.
Remuneration report (continued)
(c)
(ii)
Remuneration framework (continued)
Remuneration mix – FY22
Executive KMP
Chris Morris
President and CEO –
Main Event
Annual base
salary
US$750,000
Darin Harper
Group CFO
US$400,000
As part of his
base salary
above, Mr Harper
received
US$60,000 per
annum for
performing the
role of Group CFO
Greg Yong
CEO Theme Parks &
Attractions
$551,874
(incl. super)
Target 100% of TFR
Target Weighted:
60% financial KPIs(4)
40% personal KPIs
Cash STI
Cash LTI opportunity
Target 100% of TFR
Stretch 240% of TFR
Target Weighted:
100% financial KPIs (1)
Target 50% of TFR
Stretch 120% of TFR
Target Weighted:
100% financial KPIs (1)
The LTI opportunity for Executive KMP is a one-time
grant which is subject to the achievement of
appreciation in the Equity Value of the Main Event
business or Enterprise Value of the Theme Parks &
Attractions business over a threshold amount.
Payment arises on the occurrence of a future
realisation event. Further details on the LTI
opportunity can be found in Section 10(c)(iii) below.
LTI award percentages, being the rate of
participation in value accretion as set out above
were as follows in FY22:
Chris Morris
Darin Harper
Greg Yong
3.723%
4.654% surplus component (2)
1.837%
2.296% surplus component (2)
1.000%(3)
During the year, Mr Harper remained a participant in
the Group’s legacy equity-settled Long Term
Incentive Plan (LTIP), however no further grants have
been made to him under this plan since 2017. His last
remaining tranche of performance rights under the
Plan failed to vest and lapsed in September 2021.
(1) Financial KPIs applicable to Mr Morris and Mr Harper were based on performance against agreed targets for (i) Adjusted EBITDA (60% weighting) and
(ii) constant centre revenue growth (40% weighting). In addition, a multiplier in the range 0.80x to 1.20x is applied to the Main Event financial KPI
performance ratings based on achievement of safety, strategic advancement, employee engagement and guest satisfaction objectives.
Adjusted EBITDA comprises EBITDA net of cash rent and excludes earnings from the acquired Summit locations as well as a number of significant non-
recurring and non-cash items such as pre-opening expenses, RedBird Option and LTI plan valuation expenses, Main Event sale costs and unrealised
derivative gains/losses.
Target STI awards for FY22 were based on achieving Adjusted EBITDA of at least US$57.2 million (FY21 actual: US$38.5 million), constant centre
revenue growth of at least 1.1% over pre-COVID levels and a multiplier of 1.00x. Stretch STI awards were based on achieving Adjusted EBITDA of more
than US$80.0 million, constant centre revenue growth of more than 12.0% over pre-COVID levels and a multiplier of 1.20x.
(2) If the value received by Main Event’s investors (the Group and Redbird) on the occurrence of a Realisation Event is greater than 2.5 times the Grant
Date Threshold Amount, the LTI award percentages for the surplus component are 25% higher. The sale of Main Event on 30 June 2022 did not result
in any surplus component awards.
(3) Mr Yong was already a participant in the Theme Parks & Attractions LTI Plan prior to assuming the role of CEO in April 2021. In light of the cessation of
the cash-settled plan and its replacement with a new equity-based LTI Plan to commence for FY23 (as set out in section 10(c)(iv) of this Report) the
Board will determine Mr Yong’s entitlement under the new LTI plan having regard to market practice for both the quantum of award and the
remuneration mix.
(4) Financial KPIs applicable to Mr Yong for FY22 were based on performance against agreed EBITDA, expenses and capital expenditure budgets for the
year.
16
Ardent Leisure Group Limited | Annual Report 2022
Directors’ Report
10.
Remuneration report (continued)
(c)
(ii)
Remuneration framework (continued)
Remuneration mix – FY22 (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 targets are achieved, STI awards are payable in cash normally following
the release of the Group’s audited annual financial results. Due to the sale of Main Event
on 30 June 2022, STI awards for FY22 were paid to Main Event executives on 28 June
2022.
Key performance indicators are split into financial and personal measure categories. The
actual split for each participant may vary and is generally weighted more to the financial
KPIs.
Financial KPIs are linked to achievement of earnings and revenue targets including, but
not limited to, EBITDA and constant centre sales (Main Event) and EBITDA, Expenses and
Capital Expenditure (Theme Parks & Attractions).
Personal KPIs are generally 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.
(iii)
Long term incentive arrangements
The material terms of the long term incentive arrangements for Main Event and Theme Parks & Attractions that were in place
for the year ended 28 June 2022 are set out in the respective plan documents and applied to all grants made, including those
to Executive KMP. The Main Event LTI Plan has fully vested and the Theme Parks LTI Plan has recently been replaced.
Details in relation to the former LTI Plans are outlined below. It is noted that with the sale of Main Event and the replacement
of the Australian plan with a new equity-based plan, the old plans described below will have no application to the Group in
FY23 or beyond. The new arrangements are described in the following section:
What were the LTI Plans?
The LTI Plans were incentive plans designed to attract, motivate and retain key
employees. They provided participating executives with a one-time grant to earn a
cash incentive based on the future appreciation in the Equity Value of the Main Event
business or Enterprise Value of the Theme Parks & Attractions business, above
Threshold Hurdles.
Do the LTI Plans apply beyond FY22?
The Main Event LTI Plan vested in full upon the sale of the Main Event business.
What were the Threshold Hurdles?
What were the Grant Date
Valuations?
What were the Hurdle Rates?
How did the LTI Plans drive
performance?
A new equity-based LTI Plan has been adopted for Theme Parks with effect from the
commencement of FY23 and replaces the former cash based plan in full. It is described
in detail in section 10(c)(iv) below and has the same objective of attracting, motivating
and retaining employees.
The Threshold Hurdles were the cumulative and annually compounded application of
the Hurdle Rates to Grant Date Valuations of the Main Event and Theme Parks &
Attractions businesses.
US$330.0 million Equity Value for Main Event
$124.3 million Enterprise Value for Theme Parks & Attractions
10% per annum for Main Event.
8.0% per annum for Theme Parks & Attractions.
The plans were 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.
Ardent Leisure Group Limited | Annual Report 2022
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10.
Remuneration report (continued)
(c)
Remuneration framework (continued)
(iii)
Long term incentive arrangements (continued)
Who participated in the LTI Plans?
How were the LTI Plans settled?
What were the vesting conditions?
What were the Realisation/Trigger
Events?
What differences were there between
the Main Event and Theme Parks &
Attractions Plans?
What were the payment conditions?
What happened if an employee left
their employment?
Employees of Main Event and Theme Parks & Attractions who were determined to be
instrumental in driving the long-term growth of the business were eligible to participate
at the discretion of management and the Board. Each participating employee was
granted an LTI award percentage with total LTI pool caps of 12.0% for Main Event and
6.0% for Theme Parks & Attractions. KMP award percentages are disclosed in section
10(c)(ii) above.
The LTI Plans were cash-based plans. In the case of the vested Main Event LTI plan, cash
payments were made to participants following completion of the sale.
The vested entitlement for the Plans accumulated evenly over a period of five years for
Main Event and four years for the Theme Parks & Attractions.
In the case of the Main Event LTI Plan, the LTI awards immediately vested in full upon
the sale of Main Event on 30 June 2022, being a Realisation/Trigger Event (as described
below) for those participants that remained employed by the businesses at the date of
the sale.
The Realisation/Trigger Events broadly referred to the earlier of:
(a) an acquisition of more than 50% of Main Event, or 75% of the Theme Parks &
Attractions business, as the case may be; or
(b) the IPO of the Theme Parks & Attractions business; or
(c) the seventh anniversary of the LTI award grant date of Main Event or Theme Parks
& Attractions, as the case may be.
If the Threshold Hurdle was met, Participants in the Main Event plan were entitled to
share in the value differential between the Grant Date Valuation and the Threshold
Hurdle.
If the participant remained employed, the vested portion of the LTI award was paid out
upon a change of control, an IPO (Theme Parks & Attractions) or seventh anniversary of
the LTI award grant date (Main Event and Theme Parks & Attractions).
In the event of a participant’s employment being terminated as a result of an
Approved Separation, the participant remained eligible to receive a pro-rata portion of
the LTI award representing the amount that had vested at the time of separation.
An ‘Approved Separation’ meant a participant’s termination of employment with Main
Event for any reason other than for cause. A resignation by an employee was not an
Approved Separation.
In the case of the Theme Parks & Attractions plan, if an employee left and the
Realisation Event occurred more than two years after the Approved Separation, all
awards would have lapsed without payment.
(iv)
New long term incentive arrangements from FY23
Following a recent review by the Remuneration Committee of the cash-settled LTI Plan for Theme Parks executives that has
been in place since 2019, the Board has adopted a new equity-based LTI plan with effect from the commencement of FY23.
The new LTI Plan seeks to balance and align the interests of individual executives and Ardent Leisure shareholders by adopting
a dual hurdle framework which measures performance against both internal revenue growth targets as well as total
shareholder return (TSR) performance relative to consumer discretionary market peers.
18
Ardent Leisure Group Limited | Annual Report 2022
Directors’ Report
10.
Remuneration report (continued)
(c)
Remuneration framework (continued)
(iv)
New long term incentive arrangements from FY23 (continued)
The key elements of the new Theme Parks LTI Plan comprise:
•
•
The annual issue of performance rights to key Theme Parks management for nil consideration;
Performance rights will be split into two tranches, with the first tranche being tested over a three year performance
period and the second tranche tested over a four year performance period;
• Dual TSR and operating revenue hurdles will apply to each tranche, with each hurdle carrying a 50% weighting;
•
•
In relation to the TSR hurdle, each tranche will be benchmarked over the applicable performance period against the
S&P ASX200 Consumer Discretionary Index (XDJ)(Index), which has been selected as the most applicable comparator.
The threshold performance level for 50% vesting is to meet the index and the target level for 100% vesting is
outperformance of the index by 10%. If the index is outperformed by more than 10%, a stretch opportunity of up to
110% vesting will apply on a pro rata basis, with the full 110% vesting reached if the index is outperformed by 20% or
more; and
In relation to the operating revenue hurdle, each tranche will be measured over the applicable performance period by
reference to the operating revenue compound annual growth rate (CAGR). The threshold performance level for 50%
vesting being an operating revenue CAGR of 20% or more and the target level for 100% vesting being an operating
revenue CAGR of 25%. If the operating revenue CAGR is greater than 25% a stretch opportunity of up to 110% vesting
will apply on a pro rata basis, with the full 110% vesting reached if operating revenue CAGR is 35% or more.
The table below summarises the targets and vesting implications.
Performance targets
TSR Hurdle
Operating Revenue CAGR
Threshold performance for 50% Vesting
Target performance for 100% Vesting
Stretch performance for 110% Vesting
Meet Index
Outperform Index by 10% or more
Outperform Index by 20% or more
20% or more
25% or more
35% or more
The actual award is determined on a pro rata basis for performance between the above performance targets, for example an
outperformance of TSR against the index of 5% would result in 75% vesting for that tranche of performance rights.
Executives participating in the former cash based LTI Plan will relinquish those rights in consideration of now participating in
the new equity based LTI Plan. As consideration for doing so, the Board has determined in relation to the initial FY23 grant of
LTI performance rights to adopt shorter two and three year performance periods in respect of the two tranches of performance
rights. The first tranche of 25% will be measured over a two year performance period and the second tranche of 75% will be
measured over a three year performance period. From FY24 onwards, the award testing and vesting profile will return to two
equal 50% tranches of performance rights vesting over three and four years respectively.
EPS was considered as a performance hurdle, however, given that the Theme Parks business is currently loss-making, and the
Company’s current focus on returning the business to profitability, a revenue measure was determined as being more
appropriate in the near term. The Board intends to adopt an earnings measure such as EPS CAGR in the future when the
business returns to profitability.
Ardent Leisure Group Limited | Annual Report 2022
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10.
Remuneration report (continued)
(d)
Remuneration outcomes for executives
This section sets out the actual remuneration outcomes realised by Executive KMP and the statutory remuneration disclosures
for FY22 and FY21.
(i)
STI outcomes in respect of FY22 performance
In respect of FY22 and FY21 performance, the percentage of Target STI that was awarded to the executives and the percentage
that was forfeited are set out below. Actual payments are made to individuals normally following the release of audited results.
Due to the sale of Main Event on 30 June 2022, STI awards for FY22 were paid to Main Event executives on 28 June 2022.
Name
Chris Morris
Darin Harper
Greg Yong1
John Osborne
Financial year
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
Target STI
awarded
230%(1)
150%
230%(1)
150%
90%
80%
n/a
80% (3)
Target STI
forfeited
STI outcome
- US$1,725,000
US$900,000
-
US$460,000
-
US$270,000
-
$496,686
10%
$44,000 (2)
20%
n/a
20%
n/a
$440,000
(1) FY22 STI awards to Mr Morris and Mr Harper reflect the achievement of Adjusted EBITDA and constant centre revenue growth performance which was
significantly above the Stretch financial KPI targets set out in section 10(c)(ii) above and the application of a 1.15x multiplier to the financial KPI
performance ratings based on their achievement of agreed safety, strategic advancement, employee engagement and guest satisfaction objectives.
(2) Mr Yong became KMP on 21 April 2021 upon assuming the role of Chief Executive Officer, Theme Parks & Attractions. His STI outcome in FY21 related to
the part of that year that he was KMP.
(3) The STI bonus awarded to Mr Osborne in FY21 was based on 80% of his annualised salary for the year.
(ii)
Actual remuneration outcomes
The table below sets out the total remuneration which was paid or payable to Executive KMP in respect of the years ended 28
June 2022 and 29 June 2021. The ‘LTI vested’ remuneration element reflects the value of LTI awards which vested in the year
and are payable to executive KMP. These values are different to the information in Section 10(d)(iv) below, which include, for
equity-based payments, the accounting value of equity expensed in the year, rather than the actual benefit payable.
Name
Chris Morris(1)
Darin Harper(1)
Greg Yong(2)(4)
John Osborne(3)(4)(5)
Financial
year
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
Salary
(including
superannuation)
US$750,000
US$600,000
US$400,000
US$360,000
$552,774
$107,940
n/a
$498,372
STI
bonus on an
accrued basis
LTI vested
US$1,725,000 (1) US$19,199,753 (2)
US$900,000
US$460,000 (1) US$9,476,090 (2)
US$270,000
-
Total realised pay in
respect of the
financial year
US$21,674,753
US$1,500,000
US$10,336,090
US$630,000
$1,049,460
$151,940
n/a
$938,372
-
-
-
n/a
-
$496,686 (3)
$44,000
n/a
$440,000
(1) FY22 STI payments for Mr Morris and Mr Harper reflect the significant outperformance of Main Event against agreed financial KPIs and strategic, safety,
employee engagement and guest satisfaction objectives during the year.
(2) The Main Event LTI awards for Mr Morris and Mr Harper vested upon the sale of the Main Event business on 30 June 2022. On completion of this
transaction, the equity value of Main Event was estimated to be US$738.6 million, representing an appreciation in value of US$408.6 million, or 123.8% over
the LTI Grant Date Valuation of US$330.0 million. The vested LTI awards for Mr Morris and Mr Harper reflect their contracted rights of participation in the
substantial increase in value of the Main Event business which was achieved and realised for the Group on the sale of the business, with no further Board
discretion applied in determining the outcomes.
Notwithstanding that payment of these awards was made shortly after the 28 June 2022 balance date, given that the conditions to completion of the sale
had been substantially satisfied and significant ‘in favour’ proxy votes received by 28 June 2022, an estimate of the final amounts earned by the KMP was
accrued and are disclosed as part of FY22 remuneration.
(3) The FY22 STI payment for Mr Yong reflects the substantial achievement of agreed financial KPIs and full achievement of strategic initiatives encompassing,
regulatory compliance, risk management, new park development and public relations.
(4) Mr Yong became KMP on 21 April 2021 upon assuming the role of Chief Executive Officer, Theme Parks & Attractions. His disclosed salary (inclusive of
superannuation) and bonus for FY21 relates to the part of the financial year that he was KMP.
(5) Mr Osborne ceased employment, and ceased to be KMP, on 21 April 2021. His disclosed salary (inclusive of superannuation) and bonus for FY21 relates to
the part of the financial year that he was KMP.
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Ardent Leisure Group Limited | Annual Report 2022
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10.
(d)
(iii)
Remuneration report (continued)
Remuneration outcomes for executives (continued)
Severance payments Executive KMP
There were no severance payments to Executive KMP in the year.
(iv)
Details of remuneration – Executive Key Management Personnel
Details of the remuneration of Executive KMP of the Group for FY22 are set out in the table below. The table sets out the total
cash benefits paid or payable to the executives in respect of the relevant year 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-
employment
benefits
Base
Salary
Cash
bonus
Annual
leave (1)
Super-
annuation
Total
remuneration
excluding
equity-based
payments
Equity-based
payments
Total
remuneration
Equity-
based
payments
$
$
$
$
$
$
$ % of total
Chris Morris (2)
FY22
CEO – Main Event
FY21
Darin Harper (2)
FY22
Group Chief Financial Officer FY21
Greg Yong (3)
FY22
CEO – Theme Parks &
Attractions
John Osborne (4)
Former CEO – Theme Parks
& Attractions
FY21
FY22
FY21
1,035,137 2,380,815
802,658 1,203,987
634,884
552,073
361,196
481,595
496,686
529,206
10,750
(6,175)
4,459
-
40,639
104,237
n/a
44,000
n/a
20,019
n/a
-
-
-
-
23,568
3,703
n/a
3,426,702 25,436,004 (3)
2,000,470
1,191,416 12,578,051 (3)
1,030,489
842,791
1,090,099
430,831
-
171,959
n/a
-
n/a
-
28,862,706
3,030,959
13,769,467
1,273,622
1,090,099
171,956
n/a
992,511
88.13%
34.00%
91.35%
33.83%
-
-
n/a
-
476,678
440,000
54,139
21,694
992,511
FY22 2,116,416 3,512,385
FY21 1,865,168 2,049,183
55,848
67,983
23,568
25,397
5,708,217 38,014,055
4,007,731 1,461,320
43,722,272
5,469,051
86.94%
26.72%
(1) Annual leave amounts represent the increase/(decrease) in the liability for accumulated annual leave during the year.
(2) Remuneration for US-based KMP is converted from US dollars to Australian dollars at the average exchange rate of 0.7245 (2021: 0.7475).
(3) FY22 equity-based payments for Mr Morris and Mr Harper reflect their contracted entitlements under the Main Event LTI Plan arising from the substantial
increase in value of Main Event which has been achieved and realised for the Group on the sale of this business on 30 June 2022.
(4) Mr Yong became KMP on 21 April 2021 upon assuming the role of Chief Executive Officer, Theme Parks & Attractions. His disclosed remuneration for FY21
reflects the part of the financial year that he was KMP.
(5) Mr Osborne ceased employment, and ceased to be KMP, on 21 April 2021. His disclosed remuneration for Fy21 reflects the part of the year that Mr Osborne
was KMP.
Equity-based payments included in the table above reflect the amounts recognised in the Income Statement of the Group in
accordance AASB 2 Share Based Payment and are determined based on the movement in the fair value of the awards between
reporting dates. These values are different to the information presented in Section 10(d)(ii) above, which reflects the cash value
of LTI awards which vested in the year.
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10.
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 continued with the Group unless Mr Morris gave the Group
90 days’ notice in writing. The Group could terminate Mr Morris’
employment at any time, subject to a requirement to provide 30 days’
notice where the Group intended to terminate employment for certain
‘cause’ reasons.
In certain circumstances, on termination of employment, Mr Morris was
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 continued as Group Chief Financial Officer with the Group
unless either party provided notice in writing at any time.
Greg Yong
CEO – Theme Parks & Attractions
No fixed term.
Employment continues with the Group unless Mr Yong gives the Group
90 days’ notice in writing. The Group may terminate Mr Yong’s
employment at any time, subject to a requirement to provide 30 days’
notice.
In certain circumstances, on termination of employment, Mr Yong 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 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 and there is no proposal to increase the aggregate fee cap in FY23.
Board fees payable to Non-Executive Directors (inclusive of superannuation) are as follows:
Position
Board Chair
Other Non-Executive Director
- Australia-based
Audit and Risk Committee
Other Committee
- US-based
- Chair
- Member
- Chair
- Member
FY22
$205,000
$120,000
$136,000
$20,000
$15,000
$12,500
$7,500
FY21
$205,000
$120,000
$136,000
$20,000
$15,000
$12,500
$7,500
22
Ardent Leisure Group Limited | Annual Report 2022
Directors’ Report
10.
Remuneration report (continued)
(f)
Non-Executive Director fees (continued)
Details of the actual fees delivered to Non-Executive Directors of the Company for FY22 and FY21 are set out below:
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
Erin Wallace
Salary
$
Superannuation
$
218,182
218,037
127,273
127,854
158,500
156,000
163,500
163,500
68,000
n/a
735,455
665,391
21,818
20,713
12,727
12,146
-
-
-
-
-
n/a
34,545
32,859
Total
$
240,000
238,750
140,000
140,000
158,500
156,000
163,500
163,500
68,000
n/a
770,000
698,250
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
(g)
(i)
Additional statutory disclosures
Directors’ interests in shares
Changes to Directors’ interests in shares of Ardent Leisure Group Limited during the year are set out below:
Gary Weiss AM
David Haslingden
Brad Richmond
Randy Garfield
(ii) Minimum share holdings
Number of shares in Ardent Leisure Group Limited
Opening
balance
45,844,317
523,980
751,550
30,000
47,149,847
Acquired
-
-
68,853
25,000
93,853
Disposed
-
-
-
-
-
Closing
balance
45,844,317
523,980
820,403
55,000
47,243,700
Non-Executive Directors are expected to maintain a shareholding in the Company that increases over their tenure.
(iii)
Executive KMP interests in shares
Changes to the interests of Executive KMP in shares of Ardent Leisure Group Limited during the year are set out below:
Darin Harper
Greg Yong
Number of shares in Ardent Leisure Group Limited
Opening
balance
138,558
64,692
203,250
On becoming
KMP
-
-
-
On leaving
the Group
-
-
-
Closing
balance
138,558
64,692
203,250
During the prior year, certain Main Event executives purchased preferred shares in a subsidiary of the Group, Main Event’s US
holding company, Ardent Leisure US Holding Inc (ALUSH). Changes to the interests of Executive KMP in shares of ALUSH during
the year are set out below. Upon completion of the Main Event sale transaction on 30 June 2022, the Group and each of Mr
Morris and Mr Harper ceased to hold any shares in ALUSH.
Chris Morris
Darin Harper
Number of shares in Ardent Leisure US Holding Inc
Opening
balance
750
200
950
Acquired
-
-
-
Disposed
-
-
-
Closing
balance
750
200
950
Ardent Leisure Group Limited | Annual Report 2022
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10.
Remuneration report (continued)
(g)
Additional statutory disclosures (continued)
(iv)
Valuation of awards under the Main Event and Dreamworld cash-settled LTI plans
Main Event LTI Plan
Awards issued under the Main Event LTI plan have been accounted as cash-settled share-based payments under AASB 2 Share-
based payment, as the amounts payable under the plan were based on the equity value of Main Event Entertainment Inc.
Under AASB 2, awards under this plan have been measured at fair value at each reporting date. In the prior year, the fair value
of awards was determined using a Black-Scholes option pricing model which utilised the following key factors:
Main Event LTI Plan
Grant date
First Vesting date (1)(2)
Second Vesting date (2)
Third Vesting date (2)
Fourth Vesting date (2)
Fifth Vesting date (2)
Payment date (2)
Grant date Equity Valuation of Main Event
Average risk-free rate
Dividend yield
Volatility
28 January 2021
28 January 2021
31 December 2021
31 December 2022
31 December 2023
31 December 2024
28 January 2028
US$330.0 million
0.02%
0.0%
68.3%
(1) The first vesting date of 28 January 2021 reflected vested service credit provided to employees who were participants of the previous Main Event LTI Plan
(replaced by this plan).
(2) Vesting and payment dates presented were those applicable if the plan had run for the full seven-year term. However, as noted in Section 10(c)(iii) above,
vesting and payment could be accelerated if there was an earlier Trigger Event, such as a change of control of Main Event.
Theme Parks & Attractions LTI Plan
Awards issued under the Theme Parks & Attractions LTI plan that applied up until the end of the period are accounted for as
long-term remuneration under AASB 119 Employee Benefits as the amounts paid under the plan (if any) are based on the
Enterprise Value of the Theme Parks & Attractions business and assets, rather than an equity value. Amounts potentially
payable under the Plan are determined based on an estimate of the future Enterprise Value of the business compared to the
plan Threshold Hurdle at the most likely realisation event, being the seventh anniversary of the plan.
(v)
Ardent legacy Equity-settled LTIP plan
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 in respect of the Group’s legacy equity-settled LTIP plan:
Year
granted Tranche
Financial years in
which performance
rights may vest
Number
Year
Value of
performance
rights at grant
$
Number
lapsed
Value of
performance
rights at lapse
$
Maximum
value yet to
vest
$
2017
T3
2022
35,678
30,308
35,678
35,678
30,308
35,678
-
-
-
-
Equity settled
Darin Harper
Total
For performance rights issued under this plan, the grant date is generally the date of issue of the offer letters to executives.
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.
(vi)
Loans and other transactions with KMP
There were no loans made to KMP during the financial year, as disclosed in Note 35(e) to the financial statements. Refer to Note
35(f) to the financial statements for details of other transactions with KMP during the financial year.
24
Ardent Leisure Group Limited | Annual Report 2022
Directors’ Report
11. 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 33 to the financial statements.
The Directors have considered the position of the auditors
and, in accordance with the recommendation received
from the Audit & 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.
The Directors are satisfied that the provision of non-audit
services by the auditor, as set out in Note 33 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 & 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.
12. 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 28.
13.
Events occurring after reporting date
On 30 June 2022, the Group, in conjunction with RedBird
Capital Partners, completed the sale of Main Event for total
gross cash consideration of US$835 million (excluding
purchase price adjustments and selling costs) plus up to
US$14.8 million deferred and contingent consideration.
Further details are set out in section 4 above.
Following the sale, the Directors of the Group determined
to pay an unfranked special dividend of $234.7 million (or
48.9301 cents per share) and a return of capital of $221.0
million (or 46.0699 cents per share), reflecting a significant
portion of the net proceeds from the sale of Main Event.
The total Distribution amounting to $455.7 million was paid
on 13 July 2022.
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 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 28 June 2022.
14.
Likely developments and expected results of
operations
The threats posed by the COVID-19 pandemic to date have
been far reaching, with most countries imposing severe
travel restrictions and social distancing measures. For
Ardent, the economic impact has been significant and
there remains some continuing uncertainty regarding the
ongoing impacts of the pandemic, associated border and
trading restrictions and the timeframe for recovery.
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, consumer or
physical property markets may have on the future results of
the Group is unknown. Such results could include the
potential to influence consumer discretionary expenditure,
property market values, 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.
15.
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
• 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.
16.
Environmental regulations
(a)
Governance
The Group’s operations are not subject to any ‘particular
and significant environmental regulations’ (such as the need
to hold a material environmental licence or approval) and
the Group does not currently have any ‘material exposure to
environmental risks’.
Ardent Leisure Group Limited | Annual Report 2022
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Research of environmental factors forms part of our site
due diligence process. In respect of new centre
construction, a prerequisite for any building permit, is
compliance with city and State planning and zoning
requirements which typically include (depending on
locality) soils reports, site line studies, storm water and
irrigation regulation compliance, asbestos testing etc. In
addition a certificate of occupancy or equivalent
certification is issued upon completion of construction and
may require refuse and grease storage permits, health and
food safety permits, and compliance with Occupational
Safety and Health Administration (OSHA) regulations prior
to issuance.
The extent of regulation regarding the use of
environmentally friendly building products and the design
of environmentally efficient buildings varies significantly
across the various States and municipalities within which
Main Event operates. Where required by law, such
regulations are followed. Additionally, Main Event
procurement practices seek out energy efficient appliances,
lighting and RTUs to reduce energy consumption.
With respect to operating activities at Main Event,
environmental laws and regulations govern, among other
things:
•
•
The discharge of pollutants into the air and water;
The presence, handling, release and disposal of, and
exposure to, hazardous substances;
The reduction of greenhouse gases;
•
• Waste disposal (i.e. recycling programs); and
•
Electrical and water consumption.
At this time, there are no known issues of non-compliance
with any environmental regulations regarding the Main
Event operations and there are no outstanding regulatory
notices.
With respect to our supply chain we are seeing that major
suppliers are now showing greater transparency on the
environmental and sustainability initiatives being
embedded into their operations.
Directors’ Report
16.
Environmental regulations (continued)
(a)
Governance (continued)
However, given the broad application of environmental
legislation and the fact that the Group’s operations in both
Australia and the United States of America concern physical
real estate sites which may affect the environment (or be
affected by environmental factors), the identification,
assessment and management of risks associated with
environmental matters form part of the Group’s risk
management framework overseen by the Board.
(b)
Theme Parks & Attractions – Australia
Certain aspects of the operations of the Dreamworld and
WhiteWater World theme parks are subject to legislative
requirements in respect of the environmental impacts of
their operating activities. In particular:
•
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 (including in respect
of development on land);
• Dreamworld holds the necessary regulatory
authorisations for the storage and use of
flammable/combustible goods and the storage of
hazardous chemicals;
• Dreamworld is subject to local council regulations
regarding noise emissions and the staging of night-
time events and functions;
• 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); and
• Dreamworld holds the requisite licences relating to
water conservation and irrigation.
At this time there are no known issues of non-compliance
with any environmental regulations regarding the Group’s
theme park operations and there are no outstanding
regulatory notices.
(c)
Main Event – United States of America
The Main Event business was disposed of on 30 June 2022.
The following commentary relates to the reporting year.
Main Event is subject to various Federal, State and local
environmental requirements in the United States of
America that govern both its day-to-day operations as well
as the development of new centres.
26
Ardent Leisure Group Limited | Annual Report 2022
Directors’ Report
16.
Environmental regulations (continued)
(d)
Climate change
Management within each of the Group’s businesses
continue to monitor climate change risks, including the
transition to a lower carbon economy and the physical
impacts of climate change on their respective operations
(including matters such as water scarcity, alternative energy
sources and energy costs). At the same time, management
is focused on opportunities presented by climate change
such as resource efficiencies, improvements in technology
and alternate power sources.
The Board acknowledges the demand of investors,
creditors and other participants in the financial markets for
decision-useful, climate-related information and, consistent
with the recommendations of the Task Force on Climate-
related Financial Disclosures, aims to develop meaningful
disclosure of climate related risks and opportunities.
The Board maintains oversight of climate change risks and
opportunities through its regular engagement with
management of both businesses at regular Board and
Audit & Risk Committee meetings.
17.
Rounding of amounts to the nearest thousand
dollars
The amounts contained in this report and in the financial
report have been rounded to the nearest thousand dollars
(unless otherwise stated) under the option available to the
Company under ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191. The
Company is an entity to which the legislative instrument
applies.
This report is made in accordance with a resolution of the
Boards of Directors of Ardent Leisure Group Limited.
Gary Weiss AM
Chairman
Sydney
24 August 2022
Brad Richmond
Director
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27
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 to the Directors of Ardent Leisure
Group Limited
As lead auditor for the audit of Ardent Leisure Group Limited for the financial year ended 28 June
2022, 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.
c) No non-audit services provided that contravene 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
24 August 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Income Statement
for the year ended 28 June 2022
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
Finance costs
Property expenses
Depreciation and amortisation
Loss on disposal of assets
Advertising and promotions
Repairs and maintenance
Dreamworld incident costs
Unrealised derivative losses on hedging of Main Event sale proceeds
Other expenses
Total expenses
Loss before tax (benefit)/expense
Income tax (benefit)/expense
Loss from continuing operations
Loss from discontinued operations
Loss for the year
Attributable to:
Ordinary shareholders
Note
3
4
5
6
7(a)
31
2022
$’000
49,459
-
31
3,219
52,709
9,133
37,802
1,799
710
8,335
94
5,594
5,725
684
32,895
15,471
118,242
(65,533)
(4,062)
(61,471)
(35,960)
(97,431)
2021
$’000
36,012
24
37
19,925
55,998
6,952
37,959
1,711
701
8,190
41
5,444
5,037
5,103
-
11,746
82,884
(26,886)
9
(26,895)
(60,038)
(86,933)
(97,431)
(86,933)
The above Income Statement should be read in conjunction with the accompanying notes.
Total basic and diluted losses per share (cents)
Basic and diluted losses per share (cents) from continuing operations
9
9
(20.31)
(12.81)
(18.12)
(5.61)
Ardent Leisure Group Limited | Annual Report 2022
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Statement of Comprehensive Income
for the year ended 28 June 2022
Statement of Comprehensive Income
Loss for the year
Other comprehensive (loss)/income for the year
Items that may be reclassified to profit and loss:
Foreign exchange translation difference
Items that will not be reclassified to profit and loss:
Loss on revaluation of investment held at fair value
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive loss for the year, net of tax
Attributable to:
Ordinary shareholders
Total comprehensive loss for the year, net of tax
Total comprehensive loss for the year, net of tax attributable to shareholders,
arises from:
Continuing operations
Discontinued operations
Total comprehensive loss for the year, net of tax
Note
2022
$’000
2021
$’000
(97,431)
(86,933)
18
18
3,173
(11,810)
-
(1,290)
3,173
(94,258)
(13,100)
(100,033)
(94,258)
(94,258)
(100,033)
(100,033)
(61,471)
(32,787)
(94,258)
(28,185)
(71,848)
(100,033)
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
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Ardent Leisure Group Limited | Annual Report 2022
Balance Sheet
as at 28 June 2022
Balance Sheet
Current assets
Cash and cash equivalents
Receivables
Inventories
Other
Assets classified as held for sale
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Investment held at fair value
Derivative financial instruments
Livestock
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Payables
Derivative financial instruments
Interest bearing liabilities
Current tax liabilities
Provisions
Other
Liabilities directly associated with assets classified as held for sale
Total current liabilities
Non-current liabilities
Payables
Derivative financial instruments
Interest bearing liabilities
Provisions
Non-current tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
Non-controlling interests
Total equity
Note
8(b)
11
12
13
31
15
21(a)
22
16
7(f)
14
22
20
29(b)
31
14
22
20
29(b)
17
18
19
20(c), 20(d)
2022
$’000
2021
$’000
40,765
734
2,384
1,782
45,665
956,785
1,002,450
114,942
361
-
-
115
2,554
13,439
131,411
1,133,861
23,621
32,895
21,120
2,500
1,737
2
81,875
954,187
1,036,062
594
-
24,590
487
8,459
34,130
1,070,192
63,669
777,124
(112,190)
(628,746)
36,188
27,481
63,669
114,962
4,840
6,333
4,464
130,599
-
130,599
408,511
286,712
1,358
29
187
74,553
4,656
776,006
906,605
88,652
-
23,507
2,717
4,302
2,386
121,564
-
121,564
-
2,434
601,194
2,827
8,902
615,357
736,921
169,684
777,124
(116,281)
(530,500)
130,343
39,341
169,684
The above Balance Sheet should be read in conjunction with the accompanying notes.
Ardent Leisure Group Limited | Annual Report 2022
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Statement of Changes in Equity
for the year ended 28 June 2022
Statement of Changes in Equity
Note
Contributed
equity
$’000
Reserves
$’000
Accumulated
losses
$’000
Non-
controlling
interests
$’000
Total
equity
$’000
Total equity at 30 June 2020
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
777,124
-
-
-
(102,863)
-
(13,100)
(13,100)
(443,567)
(86,933)
-
(86,933)
39,190
-
-
-
269,884
(86,933)
(13,100)
(100,033)
Transactions with owners in their capacity as owners:
Equity-based payments
Issuance of preferred stock in subsidiary
Total equity at 29 June 2021
18
Loss for the year
Other comprehensive income for the year
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Equity-based payments
Dividend paid to non-controlling interests
Transfer from reserve
18
18
18, 19
-
-
777,124
(318)
-
(116,281)
-
-
(530,500)
-
151
39,341
(318)
151
169,684
-
-
-
-
-
-
-
3,173
3,173
(97,431)
-
(97,431)
-
-
-
(97,431)
3,173
(94,258)
103
-
815
-
-
(815)
-
(11,860)
-
103
(11,860)
-
Total equity at 28 June 2022
777,124
(112,190)
(628,746)
27,481
63,669
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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Ardent Leisure Group Limited | Annual Report 2022
Statement of Cash Flows
for the year ended 28 June 2022
Statement of Cash Flows
Note
2022
$’000
2021
$’000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Property expenses paid
Interest received
Government grants received
Payments for construction of Main Event centres
Reimbursements received for construction of Main Event centres
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
Payments for intangible assets
Payment for purchase of business net of cash acquired
Proceeds from sale of plant and equipment
Proceeds from the sale of investment held for sale
Payments for investment held at fair value
Net cash flows used in investing activities
8(a)
Cash flows from financing activities
Proceeds from loans
Repayments of loans
Proceeds from issuance of preferred stock in subsidiary, net of transaction costs 21(c)
Payment of principal portion of lease liabilities
Lease interest paid
Loan interest paid
Dividends paid to non-controlling interests
Net cash flows used in financing activities
Net decrease 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
644,494
(451,549)
(15,416)
31
2,049
(30,910)
23,228
(4,721)
2,026
(1,396)
167,836
(106,580)
(10,656)
(28,657)
182
858
(2,459)
(147,312)
50,661
(21,990)
-
(13,112)
(37,241)
(17,540)
(11,860)
(51,082)
(30,558)
114,962
6,219
433,930
(346,028)
(17,451)
37
19,668
(4,001)
1,154
-
7,777
(1,176)
93,910
(37,207)
(6,464)
-
91
-
-
(43,580)
32,112
(55,065)
1,068
(12,491)
(37,366)
(15,869)
-
(87,611)
(37,281)
161,617
(9,374)
Cash and cash equivalents at the end of the year
8(b), 31(d)
90,623
114,962
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
Ardent Leisure Group Limited | Annual Report 2022
33
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Notes to the Financial Statements
for the year ended 28 June 2022
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Notes to the Financial Statements
Overview
1.
Basis of preparation
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Ardent Leisure Group Limited is a limited company,
incorporated and domiciled in Australia, whose shares are
publicly traded on the Australian Securities Exchange.
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.
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 28 June 2022, the spot rate used was
A$1.00 = US$0.6928 (2021: A$1.00 = US$0.7563). The
average spot rate during the year ended 28 June 2022 was
A$1.00 = US$0.7245 (2021: A$1.00 = US$0.7475).
(e)
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 16, 22, 24, 29 and 34 and
assumptions related to deferred tax assets and liabilities,
impairment testing of assets and determination of lease
periods and incremental borrowing rates, 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.
Reclassification of comparative information
(f)
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.
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 28 June 2022 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)
Historical cost convention
The financial statements have been prepared under the
historical cost convention, as modified by the revaluation
of investments held at fair value and derivative financial
instruments held at fair value.
(b)
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.
(c)
Principles of consolidation
Subsidiaries are 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.
(d)
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).
34
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
1.
(g)
Basis of preparation (continued)
Going concern
COVID-19 has continued to impact the operations of the
Group during the year. While Main Event performed well
throughout the period, the Theme Parks & Attractions
business experienced more subdued trading conditions,
particularly in the first half. However, following the
reopening of Queensland borders, easing of restrictions
and the launch of the new Steel Taipan rollercoaster in
December 2021, the business has rebounded well,
experiencing growth in local and interstate markets. This,
combined with several successful activations, has helped
drive strong pass sales and positive guest sentiment.
Management has continued to work hard to preserve
liquidity within the Australian business, maximising
opportunities within the parks’ local and interstate
markets and maintaining a strong focus on management
of discretionary costs. Efforts to actively engage with
local, state and federal governments and external
advisors to identify additional sources of funding and/or
financial support have also continued.
Sale of Main Event
On 30 June 2022, the Group, together with RedBird
Capital Partners, completed the sale of the Main Event
business. Prior to completion, the Group received a pre-
sale dividend of US$20.4 million (net of US$3.6 million US
federal withholding tax) and, on completion, the Group
received cash proceeds of US$453.9 million for its share
of the business. Additional post-completion proceeds of
approximately US$11.4 million (subject to finalisation of
working capital adjustments) are expected to be received
within 90-120 days of completion.
Following the sale of Main Event, the Group repaid all of
its debt facilities and returned $455.7 million of proceeds
to shareholders in the form of a special dividend and a
return of capital. Following receipt of the post-
completion proceeds noted above, the Group expects to
retain approximately $153.3 million from the Main Event
sale to support the ongoing recovery, growth and
development of the Theme Parks & Attractions business.
Deficiency of net current assets
Notwithstanding the above, at 28 June 2022 the Group
had a deficiency of net current assets of $33.6 million.
This was predominantly due to the following:
• Liabilities of $32.9 million arising from the fair value
measurement of derivative financial instruments
used to hedge the Main Event sale proceeds; and
• Current interest-bearing liabilities relating to the QTC
loan facility of $21.0 million.
These liabilities have been fully extinguished shortly after
the reporting date on completion of the Main Event sale.
Going concern assessment
The above analysis, together with management’s
forecasts which reflect the improving performance of
the Theme Parks & Attractions business and significant
cash reserves retained from the sale of Main Event,
continue to support the going concern assumption.
(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 29 June 2022 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:
Classification of Liabilities as Current or Non-current –
Amendments to IAS 1
In January 2020, the IASB issued amendments to IAS 1 to
specify the requirements for classifying liabilities as current
or non-current. The amendments clarify:
• What is meant by a right to defer settlement;
•
That a right to defer must exist at the end of the
reporting period;
•
•
That classification is unaffected by the likelihood that
an entity will exercise its deferral right; and
That only if an embedded derivative in a convertible
liability is itself an equity instrument would the terms
of a liability not impact its classification.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2023 and must be applied
retrospectively.
Due to the sale of Main Event and repayment and
termination of all debt facilities subsequent to the
reporting date, the amendments are not expected to have
a material impact on the Group.
Reference to the Conceptual Framework –
Amendments to IFRS 3
In May 2020, the IASB issued Amendments to IFRS 3
Business Combinations - Reference to the Conceptual
Framework. The amendments are intended to replace a
reference to the Framework for the Preparation and
Presentation of Financial Statements, issued in 1989, with
a reference to the Conceptual Framework for Financial
Reporting issued in March 2018 without significantly
changing its requirements.
Ardent Leisure Group Limited | Annual Report 2022
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Notes to the Financial Statements
for the year ended 28 June 2022
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IFRS 9 Financial Instruments – Fees in the ’10 per cent’
test for derecognition of financial liabilities
As part of its 2018-2020 annual improvements to IFRS
standards process, the IASB issued an amendment to IFRS
9. The amendment clarifies the fees that an entity includes
when assessing whether the terms of a new or modified
financial liability are substantially different from the terms
of the original financial liability. These fees include only
those paid or received between the borrower and the
lender, including fees paid or received by either the
borrower or lender on the other’s behalf.
The amendment is effective for annual reporting periods
beginning on or after 1 January 2022, with earlier adoption
permitted. The Group will apply the amendments to
financial liabilities that are modified or exchanged on or
after the beginning of the annual reporting period in which
the entity first applies the amendment.
The amendments are not expected to have a material
impact on the Group.
Definition of Accounting Estimates – Amendments to
IAS 8
In February 2021, the IASB issued amendments to IAS 8, in
which it introduces a definition of “accounting estimates”.
The amendments clarify the distinction between changes
in accounting estimates and changes in accounting policies
and the correction of errors. Also, they clarify how entities
use measurement techniques and inputs to develop
accounting estimates.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2023 and apply to changes
in accounting policies and changes in accounting estimates
that occur on or after the start of that period. Earlier
application is permitted as long as this fact is disclosed.
The amendments are not expected to have a material
impact on the Group.
1.
(h)
Basis of preparation (continued)
New accounting standards, amendments and
interpretations not yet adopted by the Group
(continued)
Reference to the Conceptual Framework –
Amendments to IFRS 3 (continued)
The amendments are effective for annual reporting
periods beginning on or after 1 January 2022 and apply
prospectively.
The amendments are not expected to have a material
impact on the Group.
Property, Plant and Equipment: Proceeds before
Intended Use – Amendments to IAS 16
In May 2020, the IASB issued amendments to IAS 16, which
prohibit entities deducting from the cost of an item of
property, plant and equipment, any proceeds from selling
items produced while bringing that asset to the location
and condition necessary for it to be capable of operating
in the manner intended by management. Instead, an
entity recognises the proceeds from selling such items,
and the costs of producing those items, in profit or loss.
The amendments are effective for annual reporting
periods beginning on or after 1 January 2022 and must be
applied retrospectively to items of property, plant and
equipment made available for use on or after the
beginning of the earliest period presented when the entity
first applies the amendment.
The amendments are not expected to have a material
impact on the Group.
Onerous Contracts – Costs of Fulfilling a Contract –
Amendments to IAS 37
In May 2020, the IASB issued amendments to IAS 37 to
specify which costs an entity needs to include when
assessing whether a contract is onerous or loss-making.
The amendments apply a “directly related cost approach”.
The costs that relate directly to a contract to provide
goods or services include both incremental costs and an
allocation of costs directly related to contract activities.
General and administrative costs do not relate directly to a
contract and are excluded unless they are explicitly
chargeable to the counterparty under the contract.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2022. The Group will apply
these amendments to contracts for which it has not yet
fulfilled all its obligations at the beginning of the annual
reporting period in which it first applies the amendments.
The amendments are not expected to have a material
impact on the Group.
36
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
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Basis of preparation (continued)
2.
Segment information
Performance
1.
(h)
New accounting standards, amendments and
interpretations not yet adopted by the Group
(continued)
Disclosure of Accounting Policies - Amendments to IAS
1 and IFRS Practice Statement 2
In February 2021, the IASB issued amendments to IAS 1
and IFRS Practice Statement 2 Making Materiality
Judgements, in which it provides guidance and examples
to help entities apply materiality judgements to
accounting policy disclosures. The amendments aim to
help entities provide accounting policy disclosures that
are more useful by replacing the requirement for entities
to disclose their “significant” accounting policies with a
requirement to disclose their “material” accounting
policies and adding guidance on how entities apply the
concept of materiality in making decisions about
accounting policy disclosures.
The amendments to IAS 1 are applicable for annual
periods beginning on or after 1 January 2023 with earlier
application permitted. Since the amendments to the
Practice Statement 2 provide non-mandatory guidance on
the application of the definition of material to accounting
policy information, an effective date for these
amendments is not necessary.
The Group is currently assessing the impact of the
amendments to determine the impact they will have on
the Group’s accounting policy disclosures.
(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 30 June 2021 are set out below:
•
•
Amendments to AASB 9, AASB 139, AASB 7 and
AASB 16 Interest Rate Benchmark Reform – Phase 2;
and
Amendments to AASB 16 Covid-19-Related Rent
Concessions beyond 30 June 2021
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.
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), property, plant and
equipment, intangible assets, lease right-of-use assets
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 and
divisional EBITDA.
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 51 Main Event sites in Texas,
Arizona, Georgia, Illinois, Kentucky, Missouri, New Mexico,
Ohio, Oklahoma, Kansas, Florida, Tennessee, Maryland,
Delaware, Colorado, Alabama and Louisiana.
This business was sold on 30 June 2022.
(ii)
Theme Parks & Attractions
This segment comprises Dreamworld and WhiteWater
World in Coomera, Queensland and the SkyPoint
observation deck and climb in Surfers Paradise,
Queensland.
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Ardent Leisure Group Limited | Annual Report 2022
37
Notes to the Financial Statements
for the year ended 28 June 2022
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2.
Segment information (continued)
30 June 2021 to 28 June 2022
Segment revenue
Operating EBITDA
Costs associated with the sale of Main Event
Segment EBITDA
Depreciation and amortisation
Amortisation of lease assets
Segment EBIT
Theme Parks
& Attractions
$’000
49,459
(14,447)
-
(14,447)
(8,091)
(94)
(22,632)
Corporate
$’000
-
(8,088)
(32,895)
(40,983)
(74)
(76)
(41,133)
Continuing
operations
$’000
49,459
(22,535)
(32,895)
(55,430)
(8,165)
(170)
(63,765)
(1,781)
(18)
31
(65,533)
4,062
(61,471)
-
-
-
-
-
-
-
-
-
-
-
516
-
-
-
-
Discontinued
operations
Main Event
588,100
199,205
(98,254)
100,951
(42,210)
(20,316)
38,425
(32,812)
(39,616)
56
(33,947)
(2,013)
(35,960)
8,184
925
(6,300)
-
(185)
(83,392)
(7,547)
(7,315)
Total
$’000
637,559
176,670
(131,149)
45,521
(50,375)
(20,486)
(25,340)
(34,593)
(39,634)
87
(99,480)
2,049
(97,431)
8,184
925
(6,300)
516
(185)
(83,392)
(7,547)
(7,315)
(32,895)
(32,895)
-
(32,895)
-
-
(299)
(299)
78
-
(32,817)
188
(94)
(32,285)
50,202
(64)
(45,791)
50,390
(158)
(78,076)
-
-
-
516
-
-
-
-
-
-
110
(94)
532
(108)
(80)
(188)
(59,932)
(60,120)
(7,968)
(3,512)
(11,480)
(4,037)
(15,517)
316
(127)
(7,887)
(204)
9,870
6,074
112
9,743
(1,814)
-
20,668
(43,301)
112
30,410
(45,115)
Borrowing costs
Lease liability interest expense
Interest income
Loss before tax
Income tax benefit/(expense)
Net loss after tax
The segment EBITDA above has been
impacted by the following specific items:
Reversal of impairment of property, plant and
equipment and lease-right-of-use assets
Early termination of leases
Pre-opening expenses
Dreamworld incident insurance recoveries, net of
costs
Summit business acquisition costs
Main Event LTI plan valuation expense
RedBird option valuation expense
Main Event sale costs
Unrealised derivative losses on hedging of Main
Event sale proceeds
Restructuring and other
non-recurring items
Lease payments no longer recognised in EBITDA
under AASB 16 Leases
Net loss on disposal of assets
The net loss after tax above has also been
impacted by the following specific items:
Lease asset amortisation and lease interest
expense recognised under AASB 16 Leases
Tax losses for which deferred tax asset not
recognised
Tax deductible temporary differences for which
deferred tax asset not recognised
Tax impact of specific items listed above
Total assets
Acquisitions of property, plant and equipment
and intangible assets
131,819
45,257
177,076
956,785
1,133,861
10,864
-
10,864
102,789
113,653
38
Ardent Leisure Group Limited | Annual Report 2022
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Notes to the Financial Statements
for the year ended 28 June 2022
2.
Segment information (continued)
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30 June 2020 to 29 June 2021
Segment revenue
Segment EBITDA
Depreciation and amortisation
Amortisation of lease assets
Segment EBIT
Borrowing costs
Lease liability interest expense
Interest income
Loss before tax
Income tax (expense)/benefit
Net loss after tax
The segment EBITDA above has been
impacted by the following specific items:
Net impairment of property, plant and
equipment and lease right-of-use assets
Early termination of leases
Pre-opening expenses
Dreamworld incident costs, net of insurance
recoveries
Restructuring and other
non-recurring items
Main Event LTI plan valuation expense
RedBird option valuation expense
Lease payments no longer recognised in EBITDA
under AASB 16 Leases
Net loss on disposal of assets
The net loss after tax above has also been
impacted by the following specific items:
Lease asset amortisation and lease interest
expense recognised under AASB 16 Leases
Tax losses for which deferred tax asset not
recognised
Tax deductible temporary differences for which
deferred tax asset not recognised
Tax impact of specific items listed above
Theme Parks
& Attractions
$’000
36,012
(11,097)
(7,710)
(64)
(18,871)
Corporate
$’000
-
(5,927)
(306)
(110)
(6,343)
Continuing
operations
$’000
36,012
(17,024)
(8,016)
(174)
(25,214)
(1,707)
(4)
37
(26,888)
(8)
(26,896)
Discontinued
operations
Main Event
354,655
84,302
(52,720)
(24,837)
6,745
(33,056)
(34,346)
-
(60,657)
620
(60,037)
Total
$’000
390,667
67,278
(60,736)
(25,011)
(18,469)
(34,763)
(34,350)
37
(87,545)
612
(86,933)
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-
-
(850)
-
-
-
85
(11)
(776)
-
-
-
-
50
-
-
156
(30)
176
-
-
-
(4,089)
(1,308)
(578)
(4,089)
(1,308)
(578)
(850)
-
(850)
50
-
-
241
(41)
(600)
(4,168)
(2,314)
(682)
47,710
(272)
34,299
(4,118)
(2,314)
(682)
47,951
(313)
33,699
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(65)
(113)
(178)
(59,183)
(59,361)
(5,654)
(1,955)
(7,609)
(10,086)
(17,695)
649
252
(4,818)
(49)
(19)
(2,136)
600
233
(6,954)
-
5,226
(64,043)
600
5,459
(70,997)
Total assets
Acquisitions of property, plant and equipment
and intangible assets
126,168
17,221
143,389
763,216
906,605
21,657
-
21,657
28,052
49,709
Ardent Leisure Group Limited | Annual Report 2022
39
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Notes to the Financial Statements
for the year ended 28 June 2022
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3.
Revenue from operating activities
Revenue by type
Revenue from services
Revenue from sale of goods
Revenue from operating
activities
Revenue by geographical market
Australia
Timing of revenue recognition
Goods and services transferred at a
point in time
Services transferred over time
2022
$’000
2021
$’000
28,910
20,549
20,738
15,274
49,459
36,012
2022
$’000
49,459
49,459
2021
$’000
36,012
36,012
2022
$’000
2021
$’000
35,782
25,897
13,677
49,459
10,115
36,012
(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
Revenue from rendering of services is recognised when
performance obligations to the customers have been
satisfied.
In the case of Theme Parks & Attractions, 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. The closure of the
parks in the prior year due to COVID-19 resulted in pass
holders being unable to access the parks from 23 March
2020 to 16 September 2020. Accordingly, pass revenue
was not recognised during the closure period and was
subsequently recognised over the remaining extended
validity period of the affected passes post reopening.
Sale of goods
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.
40
Ardent Leisure Group Limited | Annual Report 2022
(b)
Performance obligations
The transaction price allocated to the remaining
performance obligations (unsatisfied or partially
unsatisfied) as at end of year is as follows:
Within one year
More than one year
2022
$’000
12,073
89
12,162
2021
$’000
7,332
169
7,501
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
4.
Other income
Government subsidies & grants(1)
Insurance recoveries
Other
2022
$’000
2021
$’000
6,979
5,091
-
-
2022
$’000
2,019
1,181
19
3,219
2021
$’000
15,506
4,262
157
19,925
(1) Government subsidies in the prior year include an amount of
$13.9 million relating to the Australian federal Government’s
JobKeeper wage subsidy.
(a)
Accounting policy
Government subsidies and grants are recognised where
there is reasonable assurance that the subsidy or grant
will be received, and all attached conditions will be
complied with. When the subsidy or grant relates to an
expense item, it is recognised as income on a systematic
basis over the periods that the related costs, for which it is
intended to compensate, are expensed. When the
subsidy or grant relates to an asset, it reduces the carrying
amount of the asset. The subsidy or grant is then
recognised in profit and loss over the useful life of the
depreciable asset by way of a reduced depreciable
charge.
When the Group receives grants of non-monetary assets,
the asset and the grant are recorded at nominal amounts
and released to profit or loss over the expected useful life
of the asset, based on the pattern of consumption of the
benefits of the underlying asset by equal annual
instalments.
Insurance recoveries income is recognised when receipt
of proceeds is considered virtually certain.
Notes to the Financial Statements
for the year ended 28 June 2022
5.
Finance costs
Interest on loans
Interest on leases
Net (remission of interest)/interest on tax liabilities
(a)
Accounting policy
Note
2022
$’000
2,224
18
(443)
1,799
2021
$’000
934
4
773
1,711
Finance costs are recognised as expenses using the effective interest rate method, except where they are included in the
costs of qualifying assets.
Finance costs include interest on short term and long term borrowings, amortisation of ancillary costs incurred in connection
with the arrangement of borrowings, the interest expense on lease liabilities and preferred dividends payable by a subsidiary
where the underlying preferred shares are classified as debt under AASB 132 Financial Instruments.
Finance costs associated with the acquisition or construction of a qualifying asset are capitalised as part of the cost of that
asset. Finance costs not associated with qualifying assets, are expensed in the Income Statement.
The capitalisation rate used to determine the amount of finance costs to be capitalised is the weighted average interest rate
applicable to the Group’s outstanding borrowings during the year.
6.
Other expenses
Audit fees
Consulting fees
Consumables
Electricity
Insurance
Legal fees
Merchant fees
Printing, stationery and postage
Taxation fees
Telecommunications
Travel costs
Training
Other administrative costs
Utilities
Other
7.
(a)
Taxation
Income tax (benefit)/expense
Current tax
Deferred tax
(Over)/under provided in prior year
Income tax (benefit)/expense is attributable to:
(Loss)/profit from continuing operations
Profit from discontinued operations
Deferred income tax benefit included in income tax benefit comprises
(Increase)/decrease in deferred tax assets
Increase/(decrease) in deferred tax liabilities
Note
31(c)
7(f)
7(h)
2022
$’000
415
610
823
1,070
7,162
141
539
149
21
48
58
447
2,336
777
875
15,471
2022
$’000
7,635
(8,783)
(901)
(2,049)
(4,062)
2,013
(2,049)
(30,964)
22,181
(8,783)
2021
$’000
381
762
806
1,262
4,473
114
485
149
7
43
27
419
1,864
457
497
11,746
2021
$’000
(434)
(353)
176
(611)
9
(620)
(611)
5,451
(5,804)
(353)
Ardent Leisure Group Limited | Annual Report 2022
41
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Notes to the Financial Statements
for the year ended 28 June 2022
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7.
Taxation (continued)
(b)
Numerical reconciliation of income tax (benefit)/expense to prima facie tax benefit
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Loss from continuing operations before income tax benefit
Loss from discontinued operations before income tax benefit
Prima facie loss before tax
Tax at the Australian tax rate of 30% (2021: 30%)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable
income:
Entertainment
Sundry items
Dreamworld incident fine
RedBird preferred stock dividend
RedBird option unrealised valuation loss
Employee benefits
Tax deductible temporary differences for which deferred tax asset not recognised
Tax losses for which deferred tax asset not recognised
US withholding tax expense
Foreign exchange conversion differences
US State taxes
Research and development and other credits
Difference in overseas tax rates
(Over)/under provided in prior year
Income tax benefit
(c)
Income tax benefit relating to items of other comprehensive income
Revaluation of investment held at fair value
(d) Unrecognised temporary differences
Note
18
Deductible temporary differences for which no deferred tax asset has been recognised:
Australia - Property, plant and equipment
Total temporary differences
Potential Australian tax benefit at 30%
Total potential tax benefit
(e)
Tax consolidation legislation
Note
31
2022
$’000
(65,533)
(33,947)
2021
$’000
(26,886)
(60,657)
(99,480)
(87,543)
(29,844)
(26,263)
1
2,812
-
4,615
2,387
2
(112)
15,517
4,721
253
(1,218)
(970)
688
(901)
(2,049)
2022
$’000
-
-
2022
$’000
49,651
49,651
14,895
14,895
59
473
1,080
3,780
-
(95)
(600)
17,695
-
(207)
(692)
(605)
4,588
176
(611)
2021
$’000
553
553
2021
$’000
50,621
50,621
15,186
15,186
The Company and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation and
entered into tax sharing and tax funding agreements with the entities in the tax consolidated group. The tax sharing
agreement limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, Ardent
Leisure Group Limited.
42
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
7.
Taxation (continued)
(e)
Tax consolidation legislation (continued)
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Under the tax funding agreement, the wholly-owned entities 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.
(f)
Deferred tax assets
The balance comprises temporary differences attributable to:
Employee benefits
Provisions and accruals
Inventory diminution
Deferred revenue
Unrealised loss on derivatives
Lease liabilities
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 financial asset revaluation reserve
Credited/(debited) to the Income Statement
Reclassified as assets held for sale
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
(g)
Unrecognised tax losses
Unused US tax losses for which deferred tax asset not recognised
Unused Australian tax losses for which deferred tax asset not recognised
Total losses
Potential US tax benefit at 21%
Potential Australian tax benefit at 30%
Total potential tax benefit
Note
7(h)
7(h)
18
7(a)
2022
$’000
1,131
782
-
1,811
9,558
109
-
228
13,619
(180)
-
13,439
114,622
10,244
-
30,964
(142,211)
13,619
11,472
2,147
13,619
2022
$’000
102,388
122,789
225,177
21,501
36,837
58,338
2021
$’000
5,147
4,259
134
1,465
-
85,215
16,152
2,250
114,622
(117)
(109,849)
4,656
130,953
(11,433)
553
(5,451)
-
114,622
6,219
108,403
114,622
2021
$’000
85,891
91,446
177,337
18,037
27,434
45,471
Ardent Leisure Group Limited | Annual Report 2022
43
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Notes to the Financial Statements
for the year ended 28 June 2022
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7.
(h)
Taxation (continued)
Deferred tax liabilities
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The balance comprises temporary differences attributable to:
Prepayments
Accrued revenue and other
Property, plant and equipment
Right-of-use assets
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
Debited/(credited) to the Income Statement
Reclassified as liabilities directly associated with assets held for sale
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
Note
7(f)
7(f)
7(a)
2022
$’000
34
-
146
-
180
(180)
-
-
109,966
10,244
22,181
(142,211)
180
34
146
180
2021
$’000
491
32
37,953
71,490
109,966
(117)
(109,849)
-
127,221
(11,451)
(5,804)
-
109,966
523
109,443
109,966
(i)
Review of prior period taxation arrangements
As noted in the June 2020 annual report, a settlement was reached in October 2019 with the ATO under which the Group is
required to make further tax payments in respect of prior periods totalling $15.9 million. Of this, $10.0 million (2021: $10.0
million) is payable on deferred settlement terms commencing September 2022, for which a liability was recognised in the
June 2022 financial statements. The ATO has taken security over the freehold and business assets of SkyPoint until such time
as the tax liability is fully repaid.
On 1 July 2022, the Group paid the total amount owing to the ATO, using net proceeds from the sale of Main Event. The ATO
subsequently released security over the freehold and business assets of SkyPoint, effective 1 July 2022.
44
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
Taxation (continued)
Accounting policy
7.
(j)
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.
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.
Ardent Leisure Group Limited | Annual Report 2022
45
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Notes to the Financial Statements
for the year ended 28 June 2022
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8.
(a)
Cash flow information
Reconciliation of loss for the year to net cash flows from operating activities
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Loss for the year
Non-cash items
Depreciation of property, plant and equipment
Amortisation
Reversal of impairment
Impairment of right-of-use assets
Equity-based payments
Expected credit losses on receivables
Inventory provision decrease/(increase)
Loss on sale of property, plant and equipment
Valuation gain on financial asset held at fair value
Classified as financing activities
Finance costs
Classified as investing activities
Unrealised net loss on derivative financial instruments
Changes in asset and liabilities:
Decrease/(increase) in assets:
Receivables
Inventories
Deferred tax assets
Other assets
Increase/(decrease) in liabilities:
Payables and other liabilities
Provisions
Current tax liabilities
Deferred tax liabilities
Net cash flows from operating activities
2022
$’000
2021
$’000
(97,431)
(86,933)
45,688
25,171
(8,184)
-
83,678
513
119
158
(56)
55,673
30,074
(524)
4,613
(307)
235
(5)
313
-
74,227
69,112
39,939
109
(9,040)
(3,017)
(8,783)
(1,591)
25,096
732
617
-
167,836
206
1,530
81
(1,309)
20,785
2,125
(1,459)
(409)
93,910
46
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
8.
Cash flow information (continued)
(b)
Cash and cash equivalents
Cash and cash equivalents at 28 June 2022 comprise the following:
Cash at banks and on hand
Short term deposits
Restricted cash
2022
$’000
38,334
-
2,431
40,765
2021
$’000
108,638
4,098
2,226
114,962
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. Restricted cash includes deposits held as security for ancillary merchant, hedging and bank
guarantee facilities.
Under the terms of the Group’s financing facilities, cash and debt held by the Australian and US businesses during the year
have been subject to ‘ring fencing’ provisions whereby each business has not been able to access cash or debt facilities held
by the other. The cash available to the respective businesses at 28 June 2022 is as follows:
Theme Parks & Attractions and Corporate (Australian business)
Main Event (US business) – Discontinued Operation
Note
31(d)
2022
$’000
40,765
49,858
90,623
2021
$’000
18,067
96,895
114,962
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.
(c)
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.
(d)
Changes in interest bearing liabilities arising from financing activities
Interest bearing liabilities
Opening interest bearing liabilities
Changes from financing cash flows
Reclassified as liabilities directly associated with assets classified as held for sale
Effect of changes in foreign currency rates
Changes in lease liabilities
Other
Closing interest bearing liabilities
Derivative financial instruments
Opening derivatives liability
Reclassified as liabilities directly associated with assets classified as held for sale
Changes in fair value
Closing derivatives net liability
Total financial liabilities
2022
$’000
2021
$’000
624,701
(8,022)
(699,904)
5,639
108,249
15,047
45,710
2,405
(2,405)
-
-
45,710
691,156
(72,506)
-
(63,721)
54,291
15,481
624,701
2,511
-
(106)
2,405
627,106
Ardent Leisure Group Limited | Annual Report 2022
47
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Notes to the Financial Statements
for the year ended 28 June 2022
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9.
Losses per share
Basic losses per share (cents) from continuing operations
Basic losses per share (cents) from discontinued operations
Total basic losses per share (cents)
Diluted losses per share (cents) from continuing operations
Diluted losses per share (cents) from discontinued operations
Total diluted losses per share (cents)
Losses used in the calculation of basic and diluted earnings per share ($’000)
Weighted average number of shares on issue used in the calculation of basic losses per
share ('000)
Weighted average number of shares held by employees under employee equity plans
(refer to Note 34) ('000)(1)
Weighted average number of shares on issue used in the calculation of diluted earnings
per share ('000)
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2022
(12.81)
(7.50)
(20.31)
(12.81)
(7.50)
(20.31)
2021
(5.61)
(12.51)
(18.12)
(5.61)
(12.51)
(18.12)
(97,431)
(86,933)
479,706
479,706
92
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479,706
479,706
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(1) In accordance with AASB 133 Earnings per share, these are not included in the calculation of diluted earnings per share, as they are anti-dilutive.
Basic earnings per share are determined by dividing profit by the weighted average number of ordinary shares on issue
during the period.
Diluted earnings per share are determined by dividing the profit by the weighted average number of ordinary shares and
dilutive potential ordinary shares on issue during the period.
10. Distributions and dividends paid and payable
On 30 June 2022, the Directors of the Group determined to pay an unfranked special dividend of $234.7 million (or 48.9301
cents per share) and a return of capital of $221.0 million (or 46.0699 cents per share) (together, the ‘Distribution’), reflecting a
significant portion of the net proceeds from the sale of Main Event. The total Distribution amounting to $455.7 million was
paid on 13 July 2022. A provision has not been recognised in the financial statements at 28 June 2022 as the Distribution had
not been declared at the reporting date.
(a)
Franking credits
The tax consolidated group has franking credits arising from the payment of tax in prior periods of $1,501,307 (2021:
$1,501,307).
s
e
t
o
N
Working capital
11. Receivables
Trade receivables
Allowance for expected credit losses
Amounts receivable under US construction contracts
2022
$’000
770
(36)
-
734
2021
$’000
1,492
(20)
3,368
4,840
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p
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A
The Group has recognised an expense of $30,203 in respect of expected credit losses (ECLs) during the year ended 28 June
2022 (2021: $3,770). 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.
(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.
48
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
11.
Receivables (continued)
(a)
Accounting policy (continued)
s
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t
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v
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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.
12.
Inventories
Goods held for resale
Provision for diminution
2022
$’000
2,446
(62)
2,384
2021
$’000
6,514
(181)
6,333
The expense relating to the write-downs of inventories during the year ended 28 June 2022 was $62,465 (2021: $128,432).
(a)
Accounting policy
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.
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.
13. Other assets
Prepayments
Accrued revenue
14. Payables
Current
Interest payable
GST payable
Trade creditors
Employee benefits
Deferred revenue
Property tax payable
Capital expenditure
Other payables
Total current
Non-current
Other payables
Total non-current
Total payables
2022
$’000
1,777
5
1,782
2022
$’000
-
213
2,483
4,231
11,510
-
1,292
3,892
23,621
594
594
24,215
2021
$’000
4,162
302
4,464
2021
$’000
3,429
-
11,197
27,206
16,070
5,910
6,395
18,445
88,652
-
-
88,652
Ardent Leisure Group Limited | Annual Report 2022
49
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Notes to the Financial Statements
for the year ended 28 June 2022
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14. Payables (continued)
(a)
Accounting policy
Payables
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
15.
Property, plant and equipment
Segment
o
s
n
o
C
Theme Parks & Attractions
Main Event
Other
Total
Accumulated
depreciation &
impairments
2022
$’000
Consolidated
book
value
2022
$’000
Cost
2022
$’000
310,207
-
4,133
314,340
(195,304)
-
(4,094)
(199,398)
114,903
-
39
114,942
Accumulated
depreciation &
impairments
2021
$’000
(197,922)
(296,417)
(4,034)
(498,373)
Consolidated
book value
2021
$’000
111,701
296,711
99
408,511
Cost
2021
$’000
309,623
593,128
4,133
906,884
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:
Land and
buildings
$’000
Major rides
and
attractions
$’000
Plant and
equipment
$’000
Furniture,
fittings and
equipment
$’000
Motor
vehicles
$’000
Construction
in progress
$’000
236,309
2,416
20,711
389
105,352
12,053
2,734
341
67,092
-
41,034
(66,917)
(5,576)
1,618
4,488
(219,269)
-
-
10,375
-
23,768
(12)
(3,057)
2,682
(34)
(35,871)
-
-
-
1,324
2,322
(92,947)
-
-
344
-
(662)
-
-
-
17
66
-
-
-
-
(5)
-
-
-
43,388
56,433
-
1
(67,828)
-
-
(444)
-
61,195
41,799
5,256
2,757
78
3,857
114,942
(27,693)
(339,909)
Total
$’000
408,511
71,698
77,467
1
-
(66,963)
(45,171)
2,498
6,810
2022
Carrying amount at the
beginning of the year
Additions
Acquired through business
combination
Transfer from intangible
assets
Transfer from construction
in progress
Disposals
Depreciation
Foreign exchange
movements
Reversal of impairment
Transfer to assets
reclassified as held for sale
Carrying amount at the
end of the year
s
e
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N
s
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A
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t
n
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g
a
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a
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50
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
15.
Property, plant and equipment (continued)
s
t
n
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t
n
o
C
i
w
e
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v
O
Land and
buildings
$’000
Major rides
and
attractions
$’000
Plant and
equipment
$’000
Furniture,
fittings and
equipment
$’000
Motor
vehicles
$’000
Construction
in progress
$’000
Total
$’000
255,545
3,906
16,716
209
147,535
9,716
2,625
180
43
-
31,277
28,825
453,741
42,836
2,352
6,123
6,701
854
-
(16,030)
-
-
(991)
(6,209)
(18,648)
354
-
-
(2,337)
-
374
(46,289)
-
-
(12,855)
170
(1)
(129)
(795)
-
-
-
1
(27)
-
-
12
(67)
-
(629)
-
11
(812)
(55,657)
(32,132)
524
236,309
20,711
105,352
2,734
17
43,388
408,511
2021
Carrying amount at the
beginning of the year
Additions
Transfer from construction
in progress
Transfer (to)/from
intangible assets
Disposals
Depreciation
Foreign exchange
movements
Impairment
Carrying amount at the
end of the year
(a)
Accounting policy
Measurement basis for Theme Parks & Attractions land,
buildings and major rides and attractions
Property, plant and equipment is stated at cost, net of
accumulated depreciation and accumulated impairment
losses, if any. Such cost includes the cost of replacing part of
the plant and equipment and borrowing costs for long-term
construction projects if the recognition criteria are met. When
significant parts of plant and equipment are required to be
replaced at intervals, the Group depreciates them separately
based on their specific useful lives. All other repair and
maintenance costs are recognised in profit or loss as incurred.
Impairment of assets
Under AASB 136 Impairment of Assets, property, plant and
equipment and lease right-of-use 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.
Assets classified as held for sale are excluded from the
scope of AASB 136 and are accounted for under AASB 5
Non-current Assets Held for Sale and Discontinued Operations.
This applies to Main Event property, plant and equipment
at 28 June 2022, refer to Note 31 for further details.
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:
• Dreamworld/WhiteWater World combined
theme park;
SkyPoint, including the SkyPoint climb;
•
• Dreamworld excess land; and
•
Each individual Main Event US entertainment centre.
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Ardent Leisure Group Limited | Annual Report 2022
51
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F
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Notes to the Financial Statements
for the year ended 28 June 2022
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15. Property, plant and equipment (continued)
(a)
Accounting policy (continued)
Key impairment assumptions and sensitivities
The recoverable amount of assets has been determined
based on value-in-use calculations, which include the
following key assumptions:
Main Event
Pre-tax discount rate
Long term EBITDA growth rate
Dreamworld
Pre-tax discount rate
Long term EBITDA growth rate
SkyPoint
Pre-tax discount rate
Long term EBITDA growth rate
2022
$’000
16.3(1)
3.0(1)
2022
$’000
13.9%
2.5%
2022
$’000
14.6%
2.5%
2021
$’000
15.2%
3.0%
2021
$’000
13.6%
2.5%
2021
$’000
14.3%
2.5%
(1) The value-in-use assumptions for Main Event above relate to
impairment testing which was carried out on 6 April 2022 in
accordance with AASB 136, immediately prior to these assets
being classified as held-for-sale. This resulted in a reversal of
impairment at that date of $8.2 million (US$5.7 million). As noted
above, since being classified as held-for-sale, Main Event assets
were accounted for under AASB 5.
The assets at Dreamworld are recorded at their
recoverable amount, net of cumulative impairments.
While the directors consider the above assumptions to be
reasonable, possible changes in these assumptions could
result in further impairments or reversals of impairments.
The sensitivity of Dreamworld assets’ value-in-use to
changes in key assumptions are as follows:
Dreamworld
Pre-tax discount rate
10-year Average Annual EBTDA
Long term EBITDA growth rate
Change in
value-in-use
$’000
(4,789)
5,001
3,407
(3,407)
3,576
(3,275)
+0.5%
-0.5%
+5%
-5%
+0.5%
-0.5%
For SkyPoint assets, the Directors do not consider a
change in any of the key assumptions which would cause
the carrying amount to exceed their recoverable amount
to be reasonably possible.
Depreciation
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
impaired amounts, net of their residual values, over their
estimated useful lives as follows:
Buildings
Land improvements
Major rides & attractions
Plant and equipment
Furniture, fittings &
equipment
Motor vehicles
2022
2021
10 - 40 years 10 - 40 years
20 - 40 years 20 - 40 years
5 - 40 years
5 - 40 years
3 - 25 years
3 - 25 years
3 - 20 years
4 - 10 years
3 - 20 years
4 - 10 years
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at each reporting date. Gains
and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in the
Income Statement.
16.
Intangible assets
Goodwill at cost
Accumulated impairment
Other intangibles at cost
Accumulated amortisation
and impairment
Total intangible assets
2022
$’000
-
-
-
7,181
(4,627)
2,554
2,554
2021
$’000
68,284
(12,880)
55,404
36,942
(17,793)
19,149
74,553
52
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
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16.
Intangible assets (continued)
Goodwill
Opening net book amount
Additions
Transfer to assets classified as held for sale
Foreign exchange movements
Closing net book amount
Other intangibles
Opening net book amount
Additions
Transfer to assets classified as held for sale
Transfer to property, plant and equipment
Disposals
Amortisation
Foreign exchange movements
Closing net book amount
Total intangible assets
(a)
Goodwill
Note
28(a)
2022
$’000
55,404
23,901
(79,872)
567
-
19,149
5,600
(17,490)
(1)
(206)
(4,632)
134
2,554
2,554
2021
$’000
60,737
-
-
(5,333)
55,404
19,361
6,430
-
(11)
(18)
(5,063)
(1,550)
19,149
74,553
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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
2022
$’000
-
-
2021
$’000
55,404
55,404
On 6 April 2022, the Group announced that, together with RedBird Capital Partners (the Group’s co-investor in Main Event)
it had entered into a binding sale agreement and plan of merger to dispose of Main Event. At this date, the assets
(including goodwill) and liabilities of Main Event were reclassified as held-for-sale.
(i)
Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units (CGUs) 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 under AASB 136 Impairment of Assets:
o
s
n
o
C
s
e
t
o
N
Main Event
Budget/forecast
period EBITDA growth rate(1)
2021
Long term EBITDA
growth rate(2)
2022
2022
2021
% per annum % per annum % per annum % per annum % per annum % per annum
15.75
15.25
n/a(4)
n/a(4)
n/a(4)
2.00
2021
2022
Post-tax discount rate(3)
(1) Compound annual growth rate over the five-year budget/forecast period.
(2) Average growth rate used to extrapolate cash flows beyond the budget/forecast period.
(3) 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 16.26% in 2021.
(4) Main Event goodwill was subject to impairment testing on 6 April 2022 in accordance with AASB 136, immediately prior to these assets being
classified as held-for-sale. As a consequence of the proposed sale, the recoverable amount of Main Event goodwill was assessed with reference
to the fair value less costs of disposal of Main Event assets rather than value-in-use. The impairment testing performed did not give rise to any
impairment to goodwill. Since being classified as held-for-sale, Main Event’s assets have been accounted for under AASB 5.
In prior years’ impairment testing, the period over which management projected the CGU cash flows was five years. The
discount rates used were post tax and reflected specific risks relating to the country in which the CGU operated.
Ardent Leisure Group Limited | Annual Report 2022
53
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F
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Notes to the Financial Statements
for the year ended 28 June 2022
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16.
Intangible assets (continued)
(a)
(i)
Goodwill (continued)
Impairment tests for goodwill (continued)
Key assumptions used for value in use calculations
(continued)
The recoverable amount of a CGU was determined based
on value in use calculations. These calculations used cash
flow projections based on the FY22-FY26 financial year
budgets/forecasts. Cash flows beyond the budget period
were extrapolated using the growth rates stated above.
The growth rate did not exceed the long term average
growth rate for the business in which the CGU operated.
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
were in excess of their carrying amounts.
The Directors considered that the growth rates were
reasonable, and did not consider a change in any of the
key assumptions that 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 (2021: 5 – 8 years).
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).
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.
Assets classified as held for sale are excluded from the
scope of AASB 136 and are accounted for under AASB 5
Non-current Assets Held for Sale and Discontinued
Operations. This applies to Main Event goodwill at 28 June
2022, refer to Note 31 for further details.
Goodwill
Other intangibles
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.
Other intangibles including the Safety Case and licence to
operate for amusement parks are amortised on a straight-
line basis over the period during which the benefits are
expected to be received, which is five years.
54
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
Debt and equity
17. Contributed equity
No. of
shares
Details
479,706,016
479,706,016
Shares on issue at beginning of the year
Shares on issue at end of the year
18. Reserves
Foreign currency translation reserve
Opening balance
Translation of foreign operations
Closing balance
Equity-based payment reserve
Opening balance
Option expense
Closing balance
Financial asset revaluation reserve
Opening balance
Transfer to accumulated losses on disposal of financial asset
Revaluation - investment held at fair value
Tax impact of revaluation
Closing balance
Corporate restructure reserve
Opening balance
Closing balance
Total reserves
Foreign currency translation reserve
Date of
income
entitlement
29 Jun 2021
28 Jun 2022
Note
19
2022
$’000
777,124
777,124
2022
$’000
(12,378)
3,173
(9,205)
(8,522)
103
(8,419)
(1,290)
815
-
-
(475)
2021
$’000
777,124
777,124
2021
$’000
(568)
(11,810)
(12,378)
(8,204)
(318)
(8,522)
-
-
(1,843)
553
(1,290)
(94,091)
(94,091)
(112,190)
(94,091)
(94,091)
(116,281)
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.
Equity-based payment reserve
The equity-based payment reserve is used to recognise the fair value of performance rights issued to employees under the
Group’s equity-based DSTI and LTIP plans.
Corporate restructure reserve
Under the corporate restructure in December 2018, Ardent Leisure Group Limited shares were issued to security holders in
exchange for their stapled securities. Ardent Leisure Group Limited share capital was measured at fair value at the date of the
transaction, being the market capitalisation of the previous stapled Ardent Leisure Group at 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.
19. Accumulated losses
Opening balance
Loss for the year
Transfer from financial asset revaluation reserve
Closing balance
Note
18
2022
$’000
(530,500)
(97,431)
(815)
(628,746)
2021
$’000
(443,567)
(86,933)
-
(530,500)
Ardent Leisure Group Limited | Annual Report 2022
55
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Notes to the Financial Statements
for the year ended 28 June 2022
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20.
Interest bearing liabilities
Current
US Term debt
Lease liabilities
Queensland Government loan(1)
Total current
Non-current
US Term debt & revolving credit
Less: unamortised loan costs
Queensland Government loan
Less: unamortised loan costs
RedBird preferred stock
Less: unamortised borrowing costs
Series B preferred stock
Lease liabilities
Total non-current
Total interest bearing liabilities
2022
$’000
2021
$’000
-
123
20,997
21,120
1,865
21,642
-
23,507
-
-
24,679
(329)
-
-
-
240
181,022
(5,306)
13,753
(584)
75,692
(6,923)
1,198
342,342
24,590 601,194
45,710 624,701
(1) Under the terms of the Queensland Government loan, if the
Australian entities of the Group have Excess Cash (freely available
cash above an agreed level) at the end of each quarter, there is a
requirement for the Group to apply such Excess Cash in reducing
the loan within 30 days. This requirement was triggered in June
2022 and $21.0 million drawn debt was payable in July 2022. This
has resulted in this debt being classified as a current liability at 28
June 2022. Notwithstanding, amounts repaid under these
provisions may be redrawn in future periods.
(a)
US term debt and revolving credit facilities
At 28 June 2022, the US term debt and revolving credit
facilities have been reclassified as liabilities directly
associated with assets classified as held-for-sale. Refer Note
31.
Notwithstanding the reclassification at 28 June 2022, the
Group’s US subsidiary, Main Event Entertainment, Inc.
(Main Event) had access to a US$136.9 million (2021:
US$138.3 million) term loan facility, comprising a US$122.3
million (2021: US$123.5 million) drawn term loan and a
US$14.6 million (2021: US$14.8 million) delayed draw term
loan, as well as a US$25.0 million (2021: US$25.2 million)
revolving credit facility (collectively, the Facility). The
facility was secured and guaranteed by Main Event and
was non-recourse to the other assets of the Group.
The term debt facilities required principal repayments
equal to 1.0% of the original principal amounts drawn on
these facilities each year.
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The terms of the facility ordinarily imposed a net leverage
covenant on Main Event, being the ratio of net debt to
EBITDA adjusted for unrealised and certain non-cash and
other one-off items (adjusted EBITDA) as well as a
minimum cash holding requirement.
56
Ardent Leisure Group Limited | Annual Report 2022
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All of Main Event’s debt facilities had a variable interest
rate, which were partially fixed during the year using
interest rate swaps and caps. The weighted average
interest rates payable on the loans at 28 June 2022,
including the impact of the interest rate caps in place at
28 June 2022, was 7.56% per annum (2021: 7.50% per
annum) for USD denominated debt.
As at 28 June 2022, Main Event had unrestricted access to
the following credit facilities:
Main Event US$ term debt
Amount used
Amount unused
Main Event US$ revolving credit
facility
Amount used
Amount unused
Total facilities
Total amount used
Total amount unused
2022
$’000
2021
$’000
197,614
182,887
(197,614) (182,887)
-
-
36,085
-
33,056
-
36,085
33,056
233,699
215,943
(197,614) (182,887)
36,085
33,056
(b)
Queensland Government loan
In the prior year, the Group secured a financial assistance
package for its Theme Parks & Attractions division under
the Queensland Government’s COVID-19 Industry
Support Package and Queensland Tourism Icons Program
2020.
The package totalling $69.9 million comprises a three-
year secured loan facility of $63.7 million (which includes
capitalised interest and fees) and grants of $6.2 million
which can be used to fund working capital and approved
capital expenditure. The loan facility was effective from
15 October 2020 and is mutually exclusive from the debt
facility which was in place for the Group’s US Main Event
business during the year.
The weighted average interest rate payable on the
Queensland Government loan at 28 June 2022 was 4.28%
per annum (2021: 4.09% per annum).
As at 28 June 2022, the Australian business has access to
the following credit facilities:
Queensland Government loan
facility
Amount used
Amount unused
2022
$’000
2021
$’000
63,662
(45,676)
17,986
63,662
(13,753)
49,909
On 1 July 2022, the Group fully repaid the outstanding
loan balance of $49.9 million to the Queensland
Government, using net proceeds from the sale of Main
Event.
Notes to the Financial Statements
for the year ended 28 June 2022
20.
Interest bearing liabilities (continued)
(c)
RedBird preferred stock
On 15 June 2020, the Group entered into a partnership
transaction with a US-based private investment firm,
RedBird Capital Partners (RedBird) under which RedBird
invested US$80.0 million via Series A Preferred Stock into
Main Event’s US parent entity, Ardent Leisure US Holding
Inc (ALUSH).
The preferred stock entitled RedBird to a 10.0% per
annum preferred coupon on the US$80.0 million
invested, which was not paid in cash but accumulated
and compounded semi-annually. RedBird was also
entitled to participate in common stock dividends of
ALUSH and residual net assets in the event of its
liquidation.
In conjunction with the transaction, RedBird was granted
an option to acquire additional equity in ALUSH which
would have enabled it to move to a 51% controlling
interest, exercisable between 30 June 2022 and 30 June
2024.
In accordance with the requirements of AASB 132
Financial Instruments, this investment was classified as a
compound financial instrument and split into the
following components:
Interest bearing liability
Equity (minority interest
in the Group)
Derivative option liability
Note
2022
$’000
-
2021
$’000
68,769
22
27,186
-
39,046
2,434
At 28 June 2022, the interest bearing liability and
derivative option liability components of the RedBird
preferred stock have been reclassified as liabilities
associated with assets classified as held-for-sale. Refer
Note 31.
(d)
ALUSH Series B preferred stock
On 16 March 2021, key executives of Main Event
Entertainment, Inc (Main Event) purchased 1,100 shares
of newly issued Series B Preferred Stock in ALUSH for
US$1.1 million. The stock entitled each investor a
preferential dividend of 10% per annum, which was not
paid in cash but accumulated and compounded semi-
annually. Investors were also entitled to participate in
common stock dividends of ALUSH and residual net
assets in the event of its liquidation. Series B Preferred
Stock would have converted into common stock when
RedBird’s Series A Preferred Stock converted to common
stock.
In accordance with requirements of AASB 132 Financial
Instruments, this investment was classified as a
compound financial instrument and split into the
following components:
Interest bearing liability
Equity (minority interest in the
Group)
2022
$’000
-
2021
$’000
1,198
295
295
At 28 June 2022, the interest liability component of the
ALUSH Series B preferred stock has been reclassified as
liabilities associated with assets classified as held for sale.
Refer Note 31.
(e)
Total secured liabilities and assets pledged as
security
The carrying amounts of Main Event assets pledged as
security for the US term debt and revolving credit
facilities are as follows:
Current assets
Non-current assets
Total assets
2022
2021
$’000
$’000
74,778
63,124
797,843 599,594
872,621 662,718
The carrying amounts of Theme Park assets pledged as
security for the Queensland Government loan facility are
as follows:
2022
2021
$’000
$’000
46,165
22,212
117,972 116,521
164,137 138,733
Current assets
Non-current assets
Total assets
(f)
Accounting policy
Interest bearing liabilities
Interest bearing liabilities 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.
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.
Ardent Leisure Group Limited | Annual Report 2022
57
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Notes to the Financial Statements
for the year ended 28 June 2022
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21. Leases
(a)
Amounts recognised in the balance sheet
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June 2022
Right-of-use assets
At 29 June 2021
Additions
Amortisation
Modifications to lease terms
Reversal of impairment
Classified as held for sale
Variable lease payment adjustments
Foreign exchange movements
At 28 June 2022
June 2021
Right-of-use assets
At 1 July 2020
Additions
Amortisation
Modifications to lease terms
Leases terminated
Variable lease payment adjustments
Foreign exchange movements
Impairment
At 29 June 2021
June 2022
Lease liabilities
At 29 June 2021
Additions
Interest expenses
Modifications to lease terms
Classified as held for sale
Variable lease payment adjustments
Lease payments
Foreign exchange movements
At 28 June 2022
June 2021
Lease liabilities
At 1 July 2020
Additions
Interest expenses
Modifications to lease terms
Leases terminated
Variable lease payment adjustments
Lease payments
Foreign exchange movements
At 29 June 2021
Lease liabilities are presented in the balance sheet as follows:
Interest bearing liabilities
Current
Non-current
58
Ardent Leisure Group Limited | Annual Report 2022
Buildings
$’000
286,218
73,336
(19,989)
5,195
1,374
(350,006)
792
3,320
240
Buildings
$’000
326,402
18,390
(24,666)
(366)
(20)
1,762
(30,671)
(4,613)
286,218
Buildings
$’000
363,433
73,336
28,720
5,195
(438,247)
792
(36,823)
3,842
248
Buildings
$’000
396,238
18,390
34,287
(448)
(16)
1,771
(49,464)
(37,325)
363,433
Equipment
$’000
490
34
(289)
-
-
(246)
-
11
-
Equipment
$’000
654
92
(342)
147
-
-
(61)
-
490
Equipment
$’000
550
34
35
-
(288)
-
(343)
12
-
Equipment
$’000
701
92
63
147
-
-
(387)
(66)
550
Vehicles
$’000
4
134
(17)
-
-
-
-
-
121
Vehicles
$’000
2
-
(3)
5
-
-
-
-
4
Vehicles
$’000
1
134
3
-
-
-
(23)
-
115
Vehicles
$’000
2
-
-
5
-
-
(6)
-
1
Note
20
20
June 2022
$’000
123
240
363
Total
$’000
286,712
73,504
(20,295)
5,195
1,374
(350,252)
792
3,331
361
Total
$’000
327,058
18,482
(25,011)
(214)
(20)
1,762
(30,732)
(4,613)
286,712
Total
$’000
363,984
73,504
28,758
5,195
(438,535)
792
(37,189)
3,854
363
Total
$’000
396,941
18,482
34,350
(296)
(16)
1,771
(49,857)
(37,391)
363,984
June 2021
$’000
21,642
342,342
363,984
Notes to the Financial Statements
for the year ended 28 June 2022
21.
Leases (continued)
(b)
Additional profit or loss and cashflow information
The Group recognised rent expenses from variable lease
payments of $615,129 for the year ended 28 June 2022
(2021: $296,584).
Cash flows in respect of leases in current period are $50.4
million (2021: $49.9 million). For interest expense in
relation to leasing labilities, refer to finance costs (Note 5).
The Group has several lease contracts that include
extension options. These options are negotiated by
management to provide flexibility in managing the leased-
asset portfolio and align with the Group's business needs.
Management exercises significant judgement in
determining whether these extension options are
reasonably certain to be exercised.
Set out below are the undiscounted potential future rental
payments relating to periods following the exercise date of
extension options that are not included in the lease term:
Within five years
More than five years
(c)
Accounting policy
Total
$’000
241,003
520,264
761,267
For new contracts entered into, the Group considers
whether the contract is, or contains a lease. A lease is a
contract, or part of a contract, that conveys the right to
control the use of an identified asset for a period of time in
exchange for consideration. To determine whether a
contract conveys the right to control the use of an
identified asset for a period of time, the Group assess
whether, throughout the period of use, it has both of the
following:
•
•
The right to obtain substantially all of the economic
benefits from use of the identified asset; and
The right to direct the use of the identified asset.
The Group recognises a right-of-use asset and a
corresponding lease liability with respect to all identified
lease contracts in which it is a lessee.
(i)
Lease liabilities
At the commencement date of the lease, the Group
recognises a lease liability measured at present value of
lease payments to be made over the lease term.
Lease payments include:
•
•
Fixed payments (including reasonably certain
extension options), less any lease incentives
receivable;
Variable lease payments that are based on an index or
a rate, initially measured using the index or rate as at
the commencement date;
•
•
The exercise price of a purchase option if the Group is
reasonably certain to exercise that option; and
Payments of penalties for terminating the lease, if the
lease term reflects the Group exercising that option.
The variable lease payments that do not depend on an
index or a rate are recognised as expenses in the period on
which the event or condition that triggers the payment
occurs.
Cash payments for the principal and interest portion of
lease liabilities are classified as financing activities within
the statement of cashflows. Cash payments for variable
lease payments not measured in lease liability are
presented within the operating activities.
In calculating the present value of lease payments, the
Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the
lease is not readily determinable. Subsequent to initial
measurement, lease liabilities increase to reflect the
accretion of interest on the balance outstanding and are
reduced for lease payments made. The finance cost for
interest on the lease is charged to profit or loss over the
lease period.
The lease liability is remeasured to reflect any
reassessment or modification of lease term or changes in
the in-substance fixed payments. When the lease liability is
remeasured, a corresponding adjustment is reflected in
the right-of-use asset, or profit and loss if the right-of-use
asset is already reduced to zero.
The Group has not elected to apply the short-term lease
and the low-value assets lease practical expedients. These
leases are included in the measurement of lease liability.
(ii)
Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets
are measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives
received or make good costs to be incurred at the end of
the lease. Unless the Group is reasonably certain to obtain
ownership of the leased asset at the end of the lease term,
the recognised right-of- use assets are depreciated on a
straight-line basis over the shorter of its estimated useful
life and the lease term. Right-of-use assets are subject to
impairment and, where required, impairment testing is
performed in conjunction with property, plant and
equipment (refer to Note 15(a)).
Ardent Leisure Group Limited | Annual Report 2022
59
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Notes to the Financial Statements
for the year ended 28 June 2022
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21.
Leases (continued)
(c)
Accounting policy (continued)
(iii) Significant judgement in determining the lease
term of contracts
The Group determines the lease term as the non-
cancellable period of the lease, together with any periods
covered by options to extend the lease if the Group is
reasonably certain to exercise those options. The Group has
the option, under some of its leases to extend the lease for
additional terms of 5-15 years. Management uses its
judgement and experience to determine whether or not an
option would be reasonably certain to be exercised on a
lease by lease basis. In doing so, it considers all relevant
factors that create an economic incentive for it to exercise
the renewal. After the commencement date, the Group
reassess the lease term if there is a significant event or
change in circumstances that is within its control and
affects its ability to exercise (or not exercise) the renewal
option.
The Main Event business has projected a 20-year operating
cycle for each entertainment centre, with further
consideration of specific facts and performance of individual
centres in determining the respective lease terms of each of
its property leases. Leases for equipment and vehicles do not
generally contain renewal option periods.
(b)
Interest rate swaps and interest rate caps
During the year, the Group had an interest rate cap
agreement in place under which it could limit its interest
expense on an initial notional principal amount of
US$70.0 million. This notional principal amount reduced
to US$55.0 million in April 2021 and to US$40.0 million in
April 2022. It will further reduce to US$20.0 million in April
2023, with the agreement terminating in April 2024.
The Group elected not to apply hedge accounting for its
interest rate swap and cap agreements. Accordingly,
changes in fair value of these swaps and caps were
recorded in the Income Statement within loss from
discontinued operations. Notwithstanding the
accounting outcome, the Company considered that
these derivative contracts were appropriate and effective
in offsetting adverse economic interest rate exposures of
the Group during the year.
The table below shows the notional value and maturity
profile of the interest rate swaps and caps:
Less than 1 year
1 - 2 years
2 - 3 years
2022
$’000
28,868
28,868
-
57,736
2021
$’000
19,833
26,445
26,445
72,723
Financial risk management
22. Derivative financial instruments
(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).
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.
Non-current assets
Interest rate caps
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Current liabilities
Forward foreign exchange contracts
Non-current liabilities
RedBird call option (refer Note 20(c))
2022
$’000
2021
$’000
-
-
32,895
32,895
29
29
-
-
-
-
2,434
2,434
(a)
Forward foreign exchange contracts
The Group has entered into deal-contingent forward foreign
exchange contracts to provide certainty over proceeds from
the sale of Main Event under which the Group has contracted
to sell US$485 million if and when the Main Event sale
completes. The contracts allow the Group to sell the US
dollars at a weighted average rate of 0.7265 on or before 1
September 2022. Completion between 1 September 2022
and the contract expiry date of 6 April 2023 are subject to
weighted average rates of between 0.7265 and 0.7299.
The Group elected not to apply hedge accounting for its
forward foreign exchange contracts. Accordingly changes
in fair value of these contracts were recorded in the
Income Statement. Notwithstanding the accounting
outcome, the Group considered that these derivative
contracts were appropriate and effective in offsetting the
economic foreign exchange exposures of the Group.
60
Ardent Leisure Group Limited | Annual Report 2022
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Notes to the Financial Statements
for the year ended 28 June 2022
22.
Derivative financial instruments (continued)
(c)
Accounting policy (continued)
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.
23.
Capital and financial risk management
(a)
Capital risk management
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.
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 long-term target gearing ratio of 30% to
35% of net debt to net debt plus equity.
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.
(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 functional
currency of a Group entity.
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.
Ardent Leisure Group Limited | Annual Report 2022
61
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Notes to the Financial Statements
for the year ended 28 June 2022
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23. Capital and financial risk management (continued)
(c) Market risk (continued)
(i)
Foreign exchange risk (continued)
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.
The table below sets out the Group’s overseas investments as at the reporting date, 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:
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
Right-of-use assets
Other non-current assets
Assets classified as held for sale
Total assets
Liabilities
Current payables and other current liabilities
Derivative financial instruments
Interest bearing liabilities
Non-current payables and other non-current liabilities
Liabilities directly associated with assets classified as held for sale
Total liabilities
Australian dollars
US dollars
2022
$’000
2021
$’000
2022
$’000
2021
$’000
40,765
4,900
-
-
-
114,942
2,554
361
13,554
177,076
3,621
180,697
27,860
32,895
45,710
9,540
116,005
-
116,005
18,067
4,146
29
-
1,358
111,800
6,151
145
4,814
146,510
-
146,510
27,481
-
13,316
9,540
50,337
-
50,337
-
-
-
-
-
-
-
-
-
-
953,164
953,164
-
-
-
-
-
954,187
954,187
96,895
8,123
-
3,368
-
296,711
68,402
286,567
29
760,095
-
760,095
70,576
2,434
611,385
2,189
686,584
-
686,584
Net assets/(liabilities)
Notional value of derivatives(1)
Net exposure to foreign exchange movements
64,692
96,173
(1,023)
73,511
-
-
-
-
(700,058)
-
(701,081)
73,511
(1) The notional value of derivatives presented relates to deal contingent forward contracts which the Group entered into to hedge the expected proceeds
on completion of the sale of Main Event. Refer to Note 22(a) for further details.
62
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
23.
Capital and financial risk management (continued)
(c)
(ii)
Market risk (continued)
Foreign exchange rate sensitivity
The table below demonstrates the sensitivity of the above net exposures as at the reporting date 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%
Foreign income
2022
$’000
-
-
Profit movement
2021
$’000
Total equity
movement
2022
$’000
2021
$’000
(6,683)
8,168
-
-
63,735
(77,898)
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 and cash. 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 had exposures to interest rate risk on its net monetary liabilities as at the reporting date, 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
Australian interest
2022
$’000
2021
$’000
US interest
2022
$’000
2021
$’000
40,765
(45,676)
(4,911)
-
18,067
(13,753)
4,314
49,858
(197,614)
(147,756)
-
57,737
96,895
(182,887)
(85,992)
72,722
(4,911)
4,314
(90,019)
(13,270)
Refer to Note 22 for further details on the interest rate swaps and interest rate caps.
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Ardent Leisure Group Limited | Annual Report 2022
63
Notes to the Financial Statements
for the year ended 28 June 2022
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23. Capital and financial risk management (continued)
(c) Market risk (continued)
(iv)
Interest rate sensitivity
The table below demonstrates the sensitivity of the above net exposures as at the reporting date 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.
100bp increase in AUD rate
100bp decrease in AUD rate
100bp increase in USD rate
100bp decrease in USD rate
Profit movement
Total equity
movement
2022
$’000
(102)
102
(843)
843
2021
$’000
43
(43)
(133)
133
2022
$’000
(102)
102
(843)
843
2021
$’000
43
(43)
(133)
133
At reporting date, the Group has fixed or capped 23.73% (2021: 36.98%) 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 the reporting date. 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.
2022
Payables
Lease liabilities
Term debt
Preferred shares of subsidiaries
Queensland Government loan
Current and non-current tax
liabilities
Forward foreign exchange
contracts
Total undiscounted financial
liabilities
2021
Payables
Lease liabilities
Term debt
Preferred shares of subsidiaries
Queensland Government loan
Current and non-current tax
liabilities
Total undiscounted financial
liabilities
Book
value
$’000
Less than
1 year
$’000
113,519 112,925
56,742
472,455
17,141
197,614
-
99,443
2,595
24,679
2 to 3
1 to 2
years
years
$’000
$’000
-
-
63,717
64,349
16,985 205,044
-
-
-
46,542
4 to 5
years
$’000
-
3 to 4
years
$’000
-
64,366
-
-
- 228,630
-
-
Over 5
years
$’000
-
64,687 537,768
-
-
-
10,959
2,500
2,500
2,500
5,921
32,895
32,895
-
-
-
-
-
-
-
Total
$’000
112,925
851,629
239,170
228,630
49,137
13,421
32,895
951,564 224,798 129,744 271,893
70,287 293,317 537,768 1,527,807
Book value
$’000
88,652
363,984
182,887
76,890
13,753
Less than
1 year
$’000
88,652
54,863
15,544
-
562
1 to 2
years
$’000
-
49,232
15,592
-
754
3 to 4
2 to 3
years
years
$’000
$’000
-
-
49,960
49,483
15,451 187,744
-
-
-
14,005
4 to 5
years
$’000
-
Over 5
years
$’000
-
49,872 408,553
-
-
- 209,433
-
-
Total
$’000
88,652
661,963
234,331
209,433
15,321
11,619
2,500
2,500
2,500
2,500
3,652
-
13,652
737,785 162,121
68,078
81,439 240,204
53,524 617,986 1,223,352
64
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
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23.
Capital and financial risk management (continued)
(e)
Credit risk
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 11. 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
Note
31(d)
2022
$’000
40,765
734
12,809
576
54,884
2020
$’000
114,962
692
4,148
29
119,831
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:
2022
Receivables - Australia
Receivables - US
2021
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
705
11,769
12,474
640
3,998
4,638
27
892
919
39
118
157
2
95
97
(1)
31
30
-
53
53
14
2
16
36
-
36
20
-
20
770
12,809
13,579
712
4,149
4,860
Based on a review of receivables by management, a provision of $35,973 (2021: $19,500) has been made against receivables
with a gross balance of $35,973 (2021: $19,500).
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.
Ardent Leisure Group Limited | Annual Report 2022
65
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for the year ended 28 June 2022
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24. Fair value measurement
(a) Fair value hierarchy
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The Group measures and recognises the following assets and liabilities at fair value on a recurring basis:
•
•
•
Derivative financial instruments;
Investment held for sale; and
Investment held at fair value by Main Event (classified as held-for-sale. Refer Note 31).
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:
2022
Assets measured at fair value:
Investment held at fair value
Derivative financial instruments
Liabilities measured at fair value:
Derivative financial instruments
RedBird share purchase option
Liabilities for which fair values are disclosed:
Interest bearing liabilities
RedBird preferred shares
ALUSH Series B preferred stock
2021
Assets measured at fair value:
Investment held at fair value
Derivative financial instruments
Liabilities measured at fair value:
RedBird share purchase option
Liabilities for which fair values are disclosed:
Interest bearing liabilities
RedBird preferred shares
ALUSH Series B preferred stock
Note
31(d)
31(d)
22
31(d)
24(c)
24(c)
24(c)
-
-
-
-
-
-
-
Note
Level 1
$’000
22
22
24(c)
24(c)
24(c)
-
-
-
-
-
-
Level 1
$’000
Level 2
$’000
Level 3
$’000
3,084
-
Total
$’000
3,084
576
-
576
32,895
-
-
10,677
32,895
10,677
243,290
-
-
Level 2
$’000
-
29
-
93,154
1,475
Level 3
$’000
1,358
-
243,290
93,154
1,475
Total
$’000
1,358
29
-
2,434
2,434
196,640
-
-
-
75,692
1,198
196,640
75,692
1,198
There has been no transfer between level 1, level 2 and level 3 during the year.
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 28 June 2022.
66
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
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, where the fair values
have been determined based on present values and the
discount rates used were adjusted for counterparty or own
credit risk.
(i)
Fair value measurements using significant
unobservable inputs
Redbird share purchase option
An equity option gives the holder the right to buy or sell
the equity at a predefined strike rate at specified date(s) as
stipulated in the option agreement. The present value of
an option equals the sum of its intrinsic value and time
value. The intrinsic value of the option is its current
exercise value as determined by its strike price and current
spot price. The time value represents the likelihood of the
intrinsic value increasing and is sensitive to the volatility of
the price of the underlying asset, risk free interest rates,
and time to expiry of the option.
In prior years, management applied a stochastic approach
using a Monte-Carlo simulation model to value the
RedBird share purchase option. In the current year, the fair
value was determined with reference to the expected
incremental proceeds which were payable to RedBird
upon cancellation of the option which occurred on
completion of the sale of Main Event.
Redbird preferred shares
The initial carrying value of the liability component was
determined by discounting the contractual stream of
future cash flows (coupon of 10% and principal of US$80
million) to the present value, at the rate of interest at
inception (18.62%) applicable to instruments of
comparable credit status and within similar industries,
with similar terms.
The equity component was measured as the residual
after taking account of the option and fair value of debt.
ALUSH Series B preferred stock
The initial carrying value of the liability component was
determined by discounting the contractual stream of
future cash flows (coupon of 10% and principal of US$1.1
million) to the present value, at the rate of interest at
inception (14.35%) applicable to instruments of
comparable credit status and within similar industries,
with similar terms.
The equity component was measured as the residual
after taking account of the fair value of debt.
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Ardent Leisure Group Limited | Annual Report 2022
67
Notes to the Financial Statements
for the year ended 28 June 2022
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24.
Fair value measurement (continued)
(c)
Fair values of other financial instruments
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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 28 June 2022:
US term debt and revolving credit facility
Queensland Government loan
RedBird preferred shares
ALUSH Series B preferred stock
Carrying
amount
2022
$’000
197,614
45,676
93,154
1,475
Fair value
2022
$’000
197,998
45,699
97,900
1,649
Discount
rate
2022
%
7.56
5.82
18.62
14.35
Carrying
amount
2021
$’000
182,887
13,753
75,692
1,198
Fair value
2021
$’000
183,203
13,753
75,638
1,201
Discount
rate
2021
%
7.50
4.96
18.62
14.35
In determining the fair values above, the principal amounts payable have been discounted at rates which reflect the price
that market participants would use when transferring the financial instruments, 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.
(d)
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.
68
Ardent Leisure Group Limited | Annual Report 2022
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.
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.
Notes to the Financial Statements
for the year ended 28 June 2022
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Unrecognised items
25. Contingent liabilities
Other
28.
Business combinations
As reported in prior periods, on 18 June 2020, the Company
was served with a representative shareholder class action
arising from the 2016 Dreamworld tragedy. The claim
alleges contraventions of the Corporations Act 2001 (Cth). The
Company has indicated since the action was commenced,
and continues to maintain, that it considers the proceedings
to be without merit and is vigorously defending them, and
therefore does not provide any estimate of potential liability
(if any at all). The Company maintains appropriate insurances
to respond to litigation and the majority of associated costs.
A small number of civil claims relating to the 2016
Dreamworld tragedy have yet to be finalised. They are in the
process of being dealt with by the Company’s liability
insurer. The statutory time period for bringing any further
civil claims has passed.
Unless otherwise disclosed in the financial statements,
Ardent Leisure Group Limited has no other material
contingent liabilities.
26. Capital commitments
(a)
Capital commitments
Capital expenditure contracted for at the reporting date
but not recognised as liabilities is as follows:
Property, plant and equipment
Payable:
Within one year
2022
$’000
2021
$’000
400
400
4,046
4,046
27.
Events occurring after reporting date
On 30 June 2022, the Group, in conjunction with RedBird
Capital Partners, completed the sale of Main Event for total
gross cash consideration of US$835 million (excluding
purchase price adjustments and selling costs) plus up to
US$14.8 million deferred and contingent consideration.
This sale will be accounted for, and the gain reflected, in the
FY23 financial statements. It is not possible to disclose details
of the gain arising from the sale in these financial statements
as the assessment of working capital adjustments and
deferred contingent consideration is yet to be finalised.
Following the sale, the Directors of the Group determined to
pay an unfranked special dividend of $234.7 million (or
48.9301 cents per share) and a return of capital of $221.0
million (or 46.0699 cents per share), reflecting a significant
portion of the net proceeds from the sale of Main Event. The
total Distribution amounting to $455.7 million was paid on
13 July 2022.
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 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 28 June 2022.
On 3 March 2022, the Group announced that Main Event
had completed the acquisition of three family
entertainment centres in Colorado operating as 'The
Summit'. The three centres, located within the Denver and
Colorado Springs markets, provided Main Event with an
immediate penetration into one of the Company's target
trade areas, along with the Company's existing centre
located in the Denver market.
The total purchase price (inclusive of working capital
adjustments) was US$75.4 million. This was funded from
existing available liquidity within Main Event of US$25.2
million and the sale and leaseback of land and buildings
relating to these centres, which yielded proceeds of
US$50.2 million.
The sale and leaseback of land and buildings was
consistent with the Group’s approach to developing,
funding and operating its real estate infrastructure. As the
sale and leaseback occurred immediately following the
acquisition of the assets at fair value, no gain or loss arose
on this transaction.
The acquired business contributed revenues of $13.4
million (US$9.7 million) and a profit before tax of $3.3
million (US$2.4 million) to the Group for the period 3
March 2022 to 28 June 2022. If the acquisition had
occurred at the beginning of the financial year, it would
have contributed revenues of $39.8 million (US$28.9
million) and a profit before tax of $12.5 million (US$9.1
million).
(a)
Assets acquired and liabilities assumed
The fair values of the identifiable assets and liabilities of
The Summit as at the date of acquisition were:
Fair value
recognised on
acquisition
A$’000
US$’000
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58,198
53
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77,467
77,784
Assets
Cash and cash equivalents
Inventories
Property, plant and equipment
Total assets
Liabilities
Payables
Other
Total liabilities
Total identifiable net assets
at fair value
Goodwill arising on acquisition
Cash purchase consideration
76,913
23,901
100,814
57,546
17,883
75,429
(105)
(547)
(652)
(140)
(731)
(871)
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The goodwill recognised on acquisition is attributable to
the synergistic growth opportunities provided by the
three acquired centres. Being located within Denver and
Colorado Springs, they provide immediate penetration
into one of Main Event's target trade areas, along with the
business' existing Denver centre.
Ardent Leisure Group Limited | Annual Report 2022
69
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Notes to the Financial Statements
for the year ended 28 June 2022
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28. Business combinations (continued)
(b)
Accounting policy
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The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a business comprises the fair
values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration
transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing
equity interest in the subsidiary.
Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at
which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
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29. Provisions
(a)
Distributions to shareholders
Provision is made for the amount of any dividend 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.
No dividend was paid or declared for the half year ended 28 December 2021 (29 December 2020: Nil).
On 30 June 2022, the Directors of the Group determined to pay an unfranked special dividend of $234.7 million (or 48.9301
cents per share) and a return of capital of $221.0 million (or 46.0699 cents per share) (together, the ‘Distribution’), reflecting a
significant portion of the net proceeds from the sale of Main Event. The total Distribution amounting to $455.7 million was
paid on 13 July 2022. A provision has not been recognised in the financial statements at 28 June 2022 as the Distribution
had not been declared at the reporting date.
(b) Other provisions
At 29 June 2021
Additions
Provisions utilised in the year
Unused amounts reversed
Unwinding of discount and changes in discount rate
Foreign exchange movements
Reclassified as held for sale
At 28 June 2022
Current
Non-current
Total provisions
Employee
benefits
$’000
4,598
14,670
(2,276)
(257)
36
(356)
(14,526)
1,889
1,402
487
1,889
Property
make good
$’000
2,189
219
-
-
-
22
(2,430)
-
-
-
-
Sundry(1)
$’000
342
140
(147)
-
-
-
-
335
335
-
335
Total
$’000
7,129
15,029
(2,423)
(257)
36
(334)
(16,956)
2,224
1,737
487
2,224
(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.
(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.
70
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
29.
Provisions (continued)
(c)
Accounting policy (continued)
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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.
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.
30. Net tangible assets
Net tangible assets are calculated as follows:
Total assets
Less: intangible assets
Less: right-of-use assets
Less: total liabilities
Add: lease liabilities
Net tangible assets
Total number of shares on issue
Net tangible asset backing per share
31. Discontinued operations
Note
2022
$’000
2021
$’000
1,133,861
(112,502)
(377,621)
(1,070,192)
472,455
46,001
479,706,016
$0.10
906,605
(74,553)
(286,712)
(736,921)
363,984
172,403
479,706,016
$0.36
20, 21(a)
17
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Overview
(a)
On 6 April 2022, the Group announced that, together with RedBird Capital Partners (the Group’s co-investor in Main Event), it
had entered into a binding sale agreement and plan of merger with Dave & Buster’s Entertainment Inc for the sale of the entire
Main Event business for total gross cash consideration of US$835 million (excluding purchase price adjustments and selling
costs) plus up to US$14.8 million deferred and contingent consideration (the ‘Transaction’).
Completion of the Transaction occurred after the reporting date, on 30 June 2022. Prior to completion, the Group received a
pre-sale dividend of US$20.4 million (net of US$3.6 million US federal withholding tax) and, on completion, the Group received
cash proceeds of US$453.9 million for its share of the business. Additional post-completion proceeds of approximately US$11.4
million (subject to finalisation of working capital adjustments) are expected to be received within 90-120 days of completion.
The results of the Main Event business have been presented as a discontinued operation at 28 June 2022 and associated assets
and liabilities have been classified as held-for-sale. In accordance with accounting standards, depreciation and amortisation of
Main Event assets ceased when these assets were classified as held-for-sale on 6 April 2022.
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Ardent Leisure Group Limited | Annual Report 2022
71
Notes to the Financial Statements
for the year ended 28 June 2022
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31. Discontinued operations (continued)
(b)
Financial performance
The financial performance for the year ended 28 June 2022 was as follows:
Revenue
Expenses
Costs incurred relating to the sale of the Main Event business
Loss before income tax
Income tax (benefit)/expense
Loss after tax from discontinued operations
(c)
Cash flow information
The cash flows for the year ended 28 June 2022 were as follows:
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash outflow from financing activities
Net decrease in cash and cash equivalents
2022
$’000
588,706
(615,338)
(7,315)
(33,947)
(2,013)
(35,960)
2022
$’000
197,310
(131,901)
(112,446)
(47,037)
2021
$’000
358,200
(418,857)
-
(60,657)
620
(60,037)
2021
$’000
92,468
(24,983)
(99,606)
(32,121)
(d)
Assets and liabilities of disposal group classified as held for sale
The following assets and liabilities were reclassified as held for sale in relation to the discontinued operations as at 28 June 2022:
2022
Assets classified as held for sale
Cash and cash equivalents
Receivables
Inventories
Property, plant and equipment
Intangible assets
Right-of-use assets
Financial asset held at fair value
Derivative financial instruments
Other
Total assets of disposal group held for sale
Labilities directly associated with assets classified as held for sale
Payables
Interest bearing liabilities
Provisions
Derivative financial instruments
Other
Total liabilities of disposal group held for sale
Main Event
$’000
Other(1)
$’000
49,858
12,809
7,111
391,139
109,948
377,260
2,584
576
5,000
956,285
(89,304)
(758,634)
(89,739)
(10,677)
(5,833)
(954,187)
-
-
-
-
-
-
500
-
-
500
-
-
-
-
-
-
Total
$’000
49,858
12,809
7,111
391,139
109,948
377,260
3,084
576
5,000
956,785
(89,304)
(758,634)
(89,739)
(10,677)
(5,833)
(954,187)
(1) Other assets held for sale relates to a financial investment held at fair value in Online Media Holdings Limited. This investment has been disposed for
proceeds equal to the carrying amount after the reporting date.
72
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
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32. Deed of Cross Guarantee
In 2019, Ardent Leisure Group Limited, Ardent Leisure Limited, Ardent Leisure Management Limited, Ardent Leisure
Entertainment Pty Ltd and Main Event Entertainment Pty Ltd entered into a Deed of Cross Guarantee under which each
company guaranteed the debts of the others.
By entering into the deeds, Ardent Leisure Limited has been relieved from the requirement to prepare a financial report and
Directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
Consolidated Income Statement
(a)
Ardent Leisure Group Limited, Ardent Leisure Limited, Ardent Leisure Management Limited, Ardent Leisure Entertainment
Pty Ltd and Main Event Entertainment Pty Ltd represent a ‘Closed Group’ for the purposes of the Class Order. Set out below is
a consolidated Income Statement for the year ended 28 June 2022 of the Closed Group:
Income
Revenue from operating activities
Reversal of impairment of investment in subsidiary
Net gain from derivative financial instruments
Interest income
Dividend income
Other income
Total income
Expenses
Purchases of finished goods
Salary and employee benefits
Finance costs
Property expenses
Depreciation and amortisation
Loss on disposal of assets
Advertising and promotions
Repairs and maintenance
Unrealised derivative losses on hedging of Main Event sale proceeds
Dreamworld incident costs
Other expenses
Total expenses
Profit before tax expense
Income tax (benefit)/expense
Profit from continuing operations
Loss from discontinued operations
Loss for the year
Attributable to:
Ordinary shareholders
Loss for the year
2022
$’000
49,459
34,530
-
25
31,475
3,220
118,709
9,133
37,802
1,799
710
5,173
78
5,594
5,725
32,895
684
15,367
114,960
3,749
(2,730)
6,479
(1,694)
4,785
2021
$’000
36,012
135,158
24
28
-
19,916
191,138
6,952
37,959
1,711
701
4,528
75
5,444
5,037
-
5,103
12,098
79,608
111,530
1,177
110,353
-
110,353
4,785
4,785
110,353
110,353
Ardent Leisure Group Limited | Annual Report 2022
73
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Notes to the Financial Statements
for the year ended 28 June 2022
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32. Deed of Cross Guarantee (continued)
(b)
Consolidated Statement of Comprehensive Income
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Set out below is a consolidated Statement of Comprehensive Income for the year ended 28 June 2022 of the Closed Group:
Profit for the year
Other comprehensive loss for the year
Items that will not be reclassified to profit and loss:
Loss on revaluation of investment held at fair value
Other comprehensive loss for the year, net of tax
Total comprehensive income for the year, net of tax
Attributable to:
Ordinary shareholders
Total comprehensive income for the year, net of tax
Total comprehensive income for the year, net of tax attributable to shareholders, arises
from:
Continuing operations
Discontinued operations
Total comprehensive income for the year, net of tax
2022
$’000
4,785
2021
$’000
110,353
-
(1,290)
-
4,785
4,785
4,785
(1,290)
109,063
109,063
109,063
6,479
(1,694)
4,785
109,063
-
109,063
74
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
32.
Deed of Cross Guarantee (continued)
(c)
Consolidated Balance Sheet
Set out below is a consolidated Balance Sheet as at 28 June 2022 of the Closed Group:
Current assets
Cash and cash equivalents
Receivables
Inventories
Investment held for sale
Other
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Investment held at fair value
Investment in subsidiaries
Livestock
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Payables
Derivative financial instruments
Interest bearing liabilities
Current tax liabilities
Provisions
Other
Total current liabilities
Non-current liabilities
Payables
Intercompany payables
Interest bearing liabilities
Provisions
Non-current tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
2022
$’000
36,497
734
2,384
500
1,782
41,897
66,611
361
-
439,925
115
2,554
13,274
522,840
564,737
24,401
32,895
21,120
2,500
1,737
2
82,655
594
154,749
24,590
487
8,459
188,879
271,534
293,203
777,124
(127,640)
(356,281)
292,203
2021
$’000
13,797
691
1,918
-
1,536
17,942
60,292
145
1,358
405,395
187
3,030
4,423
474,830
492,772
22,834
-
81
2,500
1,516
4
26,935
-
154,814
13,169
637
8,902
177,522
204,457
288,315
777,124
(128,558)
(360,251)
288,315
Ardent Leisure Group Limited | Annual Report 2022
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Notes to the Financial Statements
for the year ended 28 June 2022
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32. Deed of Cross Guarantee (continued)
(d)
Consolidated Statement of Changes in Equity
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Set out below is a consolidated statement of Changes in Equity for the year ended 28 June 2022 of the Closed Group:
Note
Contributed
equity
Reserves
$’000
(126,950)
-
(1,290)
(1,290)
Accumulated
losses
$’000
(470,604)
110,353
-
110,353
Total
equity
$’000
179,570
110,353
(1,290)
109,063
$’000
777,124
-
-
-
-
777,124
(318)
(128,558)
-
(360,251)
(318)
288,315
-
-
-
-
4,785
-
4,785
4,785
-
4,785
-
-
777,124
103
815
(127,640)
-
(815)
(356,281)
103
-
293,203
Total equity at 30 June 2020
Profit for the year
Other comprehensive loss for the year
Total comprehensive (loss)/income for the year
Transactions with owners in their capacity as owners:
Equity-based payments
Total equity at 29 June 2021
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Equity-based payments
Transfer from financial assets revaluation reserve
Total equity at 28 June 2022
32(a)
32(c)
18
32(c)
32(a)
32(b)
18
32(c)
76
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
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33.
Remuneration of auditor
The auditor of the Group in the current year, Ernst & Young (EY), earned the following remuneration:
Fees to EY Australia
Audit of financial statements of the Group
Other services:
Tax compliance
Other
Total fees to EY Australia
Fees to other overseas member firms of EY Australia (US)
Audit of financial statements of the Group and financial statements of Main Event
Other services:
Tax advice
Transaction due diligence
Total fees to overseas member firms of EY Australia (US)
Total auditors' remuneration
2022
$
2021
$
414,692
381,243
21,000
-
435,692
7,384
-
388,627
804,996
582,497
184,429
27,265
959,289
1,452,382
15,647
-
598,144
986,771
34.
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.
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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.
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(i)
Equity settled payments
Since the DSTI was introduced in July 2010, incentives have
been provided to certain executives under the plan. 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.
A total of 14,777 performance rights vested during the year
and a corresponding number of shares were issued to
employees under the terms of the DSTI (2021: 24,501).
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 Cox-Ross Rubenstein Binomial valuation model and
then is recognised over the vesting period during which
employees become unconditionally entitled to the
underlying shares.
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.
Ardent Leisure Group Limited | Annual Report 2022
77
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Notes to the Financial Statements
for the year ended 28 June 2022
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34.
Equity-based payments (continued)
(a)
Deferred Short Term Incentive Plan (DSTI) (continued)
(ii)
Valuation inputs
For the performance rights outstanding at 28 June 2022, 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 28 June 2022:
Grant
Grant date
Vesting date – year 1
Vesting date – year 2
Average risk-free rate
Expected price volatility
Expected dividend yield
Share price at grant date
Valuation per performance right on issue
2021
25 August 2021
31 August 2022
31 August 2023
0.2% per annum
60.0% per annum
0.0% per annum
$1.04
$1.04
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
Exercise
price
Grant date
Valuation
per right - ALG
Balance at the
beginning of
the year
Granted
Exercised
22 Aug 2019
25 Aug 2021
31 Aug 2021
31 Aug 2023
$Nil
$Nil
114.5 cents
104.0 cents
11,559
-
11,559
3,218
192,276
195,494
(14,777)
-
(14,777)
Balance at
the end of
the year
-
192,276
192,276
The rights have an average maturity of eight 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.
78
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
34.
(b)
Equity-based payments (continued)
Long Term Incentive Plan (LTIP) (continued)
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Is there a performance gateway?
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 achieving certain conditions.
What are the vesting conditions?
What is relative TSR and how is it
measured?
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.
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 shares, 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 ASX Small 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 it
measured?
The EPS hurdle refers to the compound annual growth (CAGR) of earnings per share
over the vesting period.
The vesting schedule for the portion of the grant subject to EPS performance is as
follows:
EPS CAGR performance
Below 8%
8%
Between 8% and 13%
13% or higher
0%
50%
Straight-line vesting
between 50% and 100%
100%
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Ardent Leisure Group Limited | Annual Report 2022
79
Notes to the Financial Statements
for the year ended 28 June 2022
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34.
Equity-based payments (continued)
(b)
Long Term Incentive Plan (LTIP) (continued)
(i)
Equity settled payments
Since the LTIP was introduced in July 2009, long term incentives have been provided to certain executives under the plan.
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 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:
Tranche
T3-2018
Gateway
ROE
(13.31%)
Vesting
percentage
-
TSR
Percentile
Vesting
percentage
(32.02%)
26.98
-
Group CAGR
EPS
n/a(1)
Vesting
percentage
-
(1) Mathematically, CAGR cannot be computed when there is a negative EPS in the first year, a positive EPS in the last year and an even number of years over
which it is being measured. However, as the Gateway ROE hurdle has not been met, these LTIP rights have failed to vest and there is no need to formally
assess CAGR EPS performance.
No LTIP performance rights vested on 31 August 2021 (2021: Nil).
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 as long as they meet the LTIP’s service and performance criteria.
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Fair value
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 combination of the Monte Carlo and the Cox-Ross Rubenstein Binomial valuation
models. This is recognised over the vesting period during which employees become unconditionally entitled to the
underlying shares.
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 28 June 2022, 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 28 June 2022:
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
Share price at grant date
Valuation per performance right
on issue
2018
27 June 2019
7 September 2020
31 August 2021
31 August 2022
1.00% per annum
32.0% per annum
2.0% per annum
$1.08
$Nil
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.
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Ardent Leisure Group Limited | Annual Report 2022
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Notes to the Financial Statements
for the year ended 28 June 2022
34.
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
Failed to
vest
Balance at
the end of
the year
29 Sep 2017 31 Aug 2021 $Nil
31 Aug 2022 $Nil
27 Jun 2019
47.5 cents
0.0 cents
316,652
127,596
444,248
-
-
-
-
-
-
(316,652)
(63,798)
(380,450)
-
67,798
67,798
The rights have an average maturity of two months.
The expense recorded in the Group financial statements in the year in relation to the DSTI and LTIP performance rights was
$124,182 (2021: benefit of $307,465).
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Ardent Leisure Group Limited | Annual Report 2022
81
Notes to the Financial Statements
for the year ended 28 June 2022
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35. Related party disclosures
(a)
Directors
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The following persons have held office as Directors of the Company during the period and up to the date of this report unless
otherwise stated:
Gary Weiss AM;
David Haslingden;
Randy Garfield;
Brad Richmond; and
Erin Wallace (appointed 1 January 2022).
(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
Country of
establishment
Class of equity
securities
Controlled entities of Ardent Leisure Group Limited:
Ardent Leisure Trust
Theme parks & Attractions
Australia
Ordinary
Ardent Leisure Limited
Theme parks & Attractions,
Corporate
Ardent Leisure US Holding, Inc
Family entertainment centres
Australia
USA
Ordinary
Ordinary
(d)
(i)
Transactions with related parties
Key management personnel
Short term employee benefits
Post-employment benefits
Share-based payments
2022
$
6,420,103
58,113
38,014,055
44,492,271
2021
$
4,647,725
58,256
1,461,320
6,167,301
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
On 16 March 2021, key executives of Main Event Entertainment, Inc (Main Event) purchased 1,100 shares of newly issued
Series B Preferred Stock in Ardent Leisure US Holding Inc for US$1.1 million. The stock entitled each investor a preferential
dividend of 10% per annum, which was not paid in cash but accumulated and compounded semi-annually. Investors were
also entitled to participate in common stock dividends of ALUSH and residual net assets in the event of its liquidation. Series
B Preferred Stock would convert into common stock when RedBird’s Series A Preferred Stock converted to common stock.
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.
82
Ardent Leisure Group Limited | Annual Report 2022
Notes to the Financial Statements
for the year ended 28 June 2022
35.
Related party disclosures (continued)
(g)
Transactions with related parties
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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 intercompany loans between the subsidiaries of the Group. Outstanding
balances on these intercompany loans are unsecured and are repayable in cash. The terms and conditions of the tax funding
agreement are set out in Note 7(e). The transactions incurred in the year with controlled entities were as follows:
Reimbursable expenses paid to related parties
36. Parent entity financial information
2022
$
2021
$
(96,008)
(7,090)
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
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Equity
Contributed equity
Retained earnings
Total equity
Profit for the period
Total comprehensive gain/(loss) for the period
(b)
Guarantees
2022
$’000
2021
$’000
1
521,326
16,313
16,313
777,124
(272,111)
505,013
44,786
44,786
1
465,424
5,197
5,197
777,124
(316,897)
460,227
211,227
221,227
There are no material guarantees entered into by Ardent Leisure Group Limited in relation to the debts of its subsidiaries.
(c)
Contingent liabilities
As reported in prior periods, on 18 June 2020, the Company was served with a representative shareholder class action arising
from the 2016 Dreamworld tragedy. The claim alleges contraventions of the Corporations Act 2001 (Cth). The Company has
indicated since the action was commenced, and continues to maintain, that it considers the proceedings to be without merit
and is vigorously defending them, and therefore does not provide any estimate of potential liability (if any at all). The
Company maintains appropriate insurances to respond to litigation and the majority of associated costs.
A small number of civil claims relating to the 2016 Dreamworld tragedy have yet to be finalised. They are in the process of
being dealt with by the Company’s liability insurer. The statutory time period for bringing any further civil claims has passed.
Unless otherwise disclosed in the financial statements, Ardent Leisure Group Limited has no other material contingent
liabilities.
(d)
Contractual commitments for the acquisition of property, plant and equipment
There was no capital expenditure contracted for at the reporting date but not recognised as liabilities (2021: $nil).
Ardent Leisure Group Limited | Annual Report 2022
83
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for the year ended 28 June 2022
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36. Parent entity financial information (continued)
(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 also entered into a tax funding agreement,
effective for the year ended 31 March 2020, 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.
84
Ardent Leisure Group Limited | Annual Report 2022
Directors’ declaration to shareholders
Directors’ declaration to shareholders
In the opinion of the Directors of Ardent Leisure Group Limited:
(a) The financial statements and notes of Ardent Leisure Group Limited set out on pages 29 to 84 are in accordance with the
Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) giving a true and fair view of Ardent Leisure Group Limited’s financial position as at 28 June 2022 and of its
performance, as represented by the results of its operations, its changes in equity and its cash flows, for the financial
year ended on that date;
(b) There are reasonable grounds to believe that Ardent Leisure Group Limited will be able to pay its debts as and when they
become due and payable;
(c) Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by
International Accounting Standards Board; and
(d) At the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified
in Note 34 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the
Deed of Cross Guarantee as described in Note 32.
The Directors have been given the certifications required by Section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Boards of Directors.
Gary Weiss AM
Chairman
Sydney
24 August 2022
Brad Richmond
Director
Ardent Leisure Group Limited | Annual Report 2022
85
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 28 June 2022, 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 28 June 2022 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 (including Independence Standards) (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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of
Ardent Leisure Group Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.
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. We have determined the matters
described below to be the key audit matters to be communicated in our report. 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
Page 2
1. Sale of Main Event
Why significant
On 6 April 2022, the Group entered into a sale agreement
for the disposal of the Main Event business for total gross
cash consideration of US$835m.
Completion of the disposal occurred after the reporting date,
on 30 June 2022.
The Main Event business has been classified as Held for Sale
and as a Discontinued Operation.
This was considered a Key Audit Matter due to the
significance of the transaction and the nature of the
disclosures required.
How our audit addressed the key audit matter
Our audit procedures included the following:
- We reviewed management’s assessment that the
business should be presented as Held for Sale as at 28
June 2022 in accordance with the requirements of
AASB 5 Non-current Assets Held for Sale and
Discontinued Operations.
- We reviewed the expenses that were included in the
FY22 result that specifically related to the pending
disposal to ensure that their recognition was
appropriate.
- We assessed the adequacy of the Group’s Discontinued
Operations disclosures in the financial report outlined in
Note 31.
2. Recoverability of Theme Parks & Attractions - Property, Plant and Equipment
Why significant
The Group has $114.9 million of property, plant and
equipment held at cost as at 28 June 2022 related to Theme
Parks & Attractions as disclosed in Note 15.
Management prepared an impairment assessment to test the
recoverability of these assets in accordance with AASB 136
Impairment of Assets.
The value in use is based upon several assumptions which
are judgmental in nature, including customer attendance,
cash flow forecasts, discount rates and growth rates.
Management engaged a specialist to assist in deriving a
discount rate to be used in the assessment.
This was considered a Key Audit Matter due to the
significance of the carrying value 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 outlines the accounting policy
and management’s assumptions applied in the impairment
assessment.
How our audit addressed the key audit matter
Our audit procedures included the following:
- We considered management’s analysis and the
reasonableness of the cash flows used in the discounted
cash flow model as follows:
- We assessed the historical accuracy of
management’s cash flow forecasting and
challenged management’s cash flow
projections.
- We tested the mathematical accuracy of the
discounted cash flow model.
- We engaged EY Valuation and Business
Modelling specialists in reviewing the model
methodology, the discount rate provided by
the specialist and to perform sensitivity
calculations.
- We assessed the adequacy of the Group’s disclosures in
Note 15 in respect of asset carrying values and key
assumptions.
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 2022 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 3
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.
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, actions taken to eliminate threats or safeguards applied.
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
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 4
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 24 of the directors' report for the year ended 28 June 2022.
In our opinion, the Remuneration Report of Ardent Leisure Group Limited for the year ended 28 June 2022, 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
24 August 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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Investor Analysis
Investor Relations
Investor Analysis
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
KAYAAL PTY LTD
NATIONAL NOMINEES LIMITED
PORTFOLIO SERVICES PTY LTD
UBS NOMINEES PTY LTD
NETWEALTH INVESTMENTS LIMITED
RAGUSA PTY LTD
BNP PARIBAS NOMS PTY LTD
LANYON ASSET MANAGEMENT PTY LIMITED
CS FOURTH NOMINEES PTY LIMITED
BRISPOT NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
BOND STREET CUSTODIANS LIMITED
PALM VILLA PTY LTD
DEEMCO PTY LIMITED
OLD CHAPEL PTY LTD
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
Top investors as at 23 August 2022
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
17
18
19
20
Total
Balance of register
Grand total
No. of shares
78,586,496
76,712,601
42,657,572
24,789,468
22,672,159
22,425,069
21,277,233
19,514,862
12,383,144
8,309,983
4,740,414
4,635,956
4,611,830
3,447,084
2,827,716
2,000,000
1,930,000
1,930,000
1,800,000
1,708,768
1,301,816
360,262,171
119,443,845
479,706,016
Range report as at 23 August 2022
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
402,031,335
57,204,158
10,901,812
8,635,369
933,342
479,706,016
% No. of holders
177
2,069
1,428
3,166
2,293
9,133
83.82
11.92
2.27
1.80
0.19
100.00
The total number of investors with an unmarketable parcel of 587,954 shares as at 23 August 2022 was 1,943.
%
16.37
15.99
8.89
5.17
4.73
4.67
4.44
4.07
2.58
1.73
0.99
0.97
0.96
0.72
0.59
0.42
0.40
0.40
0.38
0.36
0.27
75.10
24.90
100.00
%
1.94
22.65
15.64
34.66
25.11
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 23 August 2022
The Ariadne Substantial Holder Group(1)
FIL Ltd
Mitsubishi UFJ Financial Group, Inc
Perpetual Limited
River Capital Pty Ltd
No. of shares
45,844,317
47,970,601
25,631,357
44,555,981
27,345,475
%
9.56%
10.00%
5.34%
9.29%
5.70%
(1) 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.
90
Ardent Leisure Group Limited | Annual Report 2022
Investor Relations and Corporate
Directory
Corporate Governance Statement
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
Share 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
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 2022
91
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A
Investor Relations and Corporate
Directory
Corporate Directory
Company
Ardent Leisure Group Limited
ABN 51 628 881 603
Registered office
Suite 601, Level 6, 83 Mount Street
North Sydney NSW 2060
Directors
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
Erin Wallace
Group Chief Financial Officer
Darin Harper (up to 30 June 2022)
Company Secretary
Chris Todd
ASX code
ALG
Auditor of the Group
Ernst & Young
200 George Street
Sydney NSW 2000
92
Ardent Leisure Group Limited | Annual Report 2022