EVT reinstates dividend as hotels and cinemas roar back to life

But after generating revenue of $606.8 million over the six months to December – only 8 per cent below pre-COVID-19 levels and a 68 per cent rise in pre-tax earning – the company, which is chaired by billionaire investor Alan Rydge, announced a fully franked interim dividend of 14¢ cents per share.

Mr Rydge said the resumption of ordinary dividend payments (a special dividend of 12¢ per share was paid in November following the divestment of more than $250 million of non-core assets) reflected the “recovery in the group’s trading divisions, underpinned by the strength of the group’s balance sheet [including $2 billion of property assets], and the board’s confidence in the strategic initiatives to deliver future growth.”

This recovery in trading was most apparent across EVT’s hotel business, where occupancy rates averaged more than 77 per cent and its three main hotel brands (QT, Atura and Rydges) all generated revenue per available room (revPAR, the key industry metric) well above pre-COVID-19 levels.

Thredbo was another star performer for EVT, generating revenues of $81 million, more than double the prior corresponding period, and a near 1000 per cent rise in pre-tax earning, which rose to $41.3 million.

Revenue and earnings surged across EVT’s Australian and New Zealand cinema businesses, on higher ticket sales and premium seat offerings, whilst its non-core German cinema business also reported higher revenue and earnings when excluding the benefit of German federal government support.

EVT CEO Jane Hastings said two types of businesses had emerged during the pandemic: those where COVID-19 had heightened their success, but who were now facing a more challenging environment; and businesses like EVT, where revenue went to zero overnight, but which transformed their business models to come out even better on the other side.

In the case of EVT, this transformation included divesting under-performing assets, strengthening its balance sheet, refurbishing key properties, expanding its hotel offering and rolling out new premium experiences.

“Every division is focusing on the key things we have to do,” Ms Hastings said. “As a result, we have been able to reinstate the dividend sooner than expected.”

Ms Hastings said the second half of the financial year was expected to show “a continuation of the recovery trends demonstrated in the first half”.

Whilst divesting $282 million of non-core assets, EVT also enhanced its hotel offering over the half year with the launch of its new budget hotel concept Lylo in Auckland in December. EVT will bring this brand to Australia, with the first hotel to open in Brisbane later this year.

Mr Hastings said Lylo had been a huge success to date, with the Auckland hotel hitting 90 per cent occupancy levels in just its second month.

“It’s only in its second month, and it’s already profitable,” she said.

She put that success down to designing a product that appealed to a market segment seeking affordable, next-generation and design-led accommodation.

“That market segment was decimated during COVID. There’s no hotel like Lylo in Auckland. We didn’t design that hotel in a bubble.”

In another win for EVT, the company was selected to operate the new IMAX Darling Harbour, which is expected to open in the Ribbon building in second half of 2023.

Citi analyst Sam Teeger said EVT’s core hotel and cinema businesses drove a “big earnings beat”.