News: VRL Village Roadshow Signed Agreement To Sell Wholly Owned Wet'n'wild Water Park, page-21

Joffrey,

I did search throu what has historically occurred when there is a major incident at theme parks ......

typically:

60-85 fall in attendances (day 1)

12-18 months - circa 30-50% recovery in numbers
24-36 months - circa 75-85% recovery
2-5 yrs - back to normal .....

given the incident was at a competitors park - the numbers suggest 25-30% fall in vrls' park ......

I agree with you - there is most definitely a capex cycle for theme parks !!!!

I also agree that's its a fixed cost base, with "variable" revenue line type of asset ......

if one goes back 3-5 yrs .....one can see throu what vrl "could earn" .....this is the delta to value .....

imho - I view the risks as:

1. nil rebound in customer numbers (low probability .....but still possible !)
2. a reduction in overall consumer demand (due to housing prices falling / reduction in available credit) - which would impact holiday type attractions (medium risk imho)
3. intense competiion from the other main theme park (hasn't really occurred to date...)
4. banks demand full payment of debt end 2019 .......if the int coverage is ok, then I rekon the most likely outcome would be nil divvy and repay debt over 3 yrs)
5. some sort of tradegy (I truly hope we see an inc in repair / maintance spend at all types of attractions so that it never happens again)....

however, at circa 6-6.5 times EV/EBITDA ......with a potential rebound in earnings .......I rekon its "value" .....

be interested to hear comments from all others

rgds
V_H