Visitor numbers will plunge and earnings plummet when the Dreamworld theme park, where four people were killed last Tuesday, eventually reopens, an analyst has warned.
Investors again sold down shares in Dreamworld’s owner, Ardent Leisure, on Monday after the company abandoned plans to reopen the park over the weekend and uncertainty over the impact of the tragedy.
In a research note, Bell Potter analyst John O’Shea predicted the theme park’s visitor numbers would decline by about 20 per cent in the 2017 financial year and then gradually improve.
Earnings for Ardent’s theme parks business, which includes WhiteWater World, also on the Gold Coast, would more than halve from $34.7 million to $15 million in 2016/17, Mr O’Shea estimated.
“What is clear, is that if the park re-opens, attendances will be adversely impacted,” he wrote.
“It remains unclear what financial and other penalties will be incurred if the company is found to be responsible in any way and how insurance cover fits into this scenario.”
Ardent Leisure’s share price (ASX code: AAD) has taken a hammering. It plummeted from $2.67 on Tuesday afternoon, before the tragedy, to as low as $1.86 when trading resumed the next day.
The price recovered slightly in following days, but plunged to $1.9675 in Monday morning trade, before closing at $2.02.
Kate Goodchild, her brother Luke Dorsett, his partner Roozi Araghi and Cindy Low all died when their raft flipped at the end of the Thunder River Rapids ride.
Ms Goodchild’s daughter Ebony, 12, and Ms Low’s son, 10, were also on the raft, but survived.
The parent company announced on Sunday that it has hired an experienced natural disaster recovery expert to help rebuild public trust in Dreamworld following criticisms of the way the company has handled the fallout from the tragedy.
Chairman Neil Balnaves will retire from the Ardent board on November 4, adding to the uncertainty.
No date set for re-opening
Dreamworld remains a crime scene and the park will remain closed until at least after the funerals of the four victims, with no announcement on a reopening date to be made this week.
The theme park’s management is promising a safety blitz before it decides to reopen.
Dreamworld CEO Craig Davidson told the media on Monday that every ride will be tested by independent experts as well as Queensland’s Workplace Health and Safety team, and that this process has reportedly begun.
Staff have been given the option of returning to work whenever they believe they are ready to do so, and each will be paid throughout the closure. About 200 employees attended work on Monday.
“It is for those staff who want to come back and help the park and support their colleagues,” Mr Davidson said.
“They are working their way through administration tasks and maintenance and upkeep of the park.”
The safety reviews will be separate to the investigations carried out by Queensland police on the Thunder River Rapids ride, Mr Davidson said.
Expert appointed to handle recovery
One of Queensland’s most experienced natural disaster recovery experts has begun helping with community recovery following Dreamworld’s fatal ride tragedy.
Mike McKay, a retired inspector with more than four decades of experience in the state’s police service, says his long-term goal is to restore international trust in the theme park.
His appointment was announced on Sunday as hundreds of people continued to pay their respects at the site, leaving a blanket of flowers at the entrance.
Mr McKay said the aftermath of Tuesday’s tragedy was still “very raw” for both families of the victims and staff.
He believes community support for the park is already strong, but the restoration of trust is a key long-term goal.
“We appreciate that we need to show the world – and it is an international situation – that this is going to be a safe, happy and comfortable place for them to come back to.”
Mr McKay has previously helped residents of the Lockyer Valley after the 2011 flood disaster and far north Queensland after Cyclone Larry in 2006.
Premier Annastacia Palaszczuk said it was reassuring Ardent Leisure had appointed Mr McKay, who had “tremendous experience”.
– with Jackson Stiles and AAP