Cinema and theme park operator Village Roadshow said it welcomed the planned sharemarket float of rival Hoyts, as it forecast "strong" theme park attendances and growth in cinema exhibition this financial year.
Chief executive Graham Burke said: "There is no doubt people's budgets have been squeezed by increasing costs and specifically every household now has multiple mobile devices and computers with the attendant additional stress on disposable cash.
"However, there is one overriding fundamental and that is people will always want to go out to be entertained.
Burke said Village Roadshow hoped to boost its film exhibition business this year through gift cards, cinemas in growth corridors and increased sales of premium Gold Class and VMax tickets.
But he said Australian box office takings for 2014 would likely be weaker than last year's $1 billion figure, down to perhaps $950 million, and the company's "transformational change" would be establishing theme parks in China, Malaysia and South Korea.
"It'll take some time for it all to come into being, but we've got a plan and time goes quickly," he said. "Meanwhile, our businesses are showing solid growth and strong cashflows."
Burke said he welcomed plans for a sharemarket float of smaller rival Hoyts, saying "a healthy Hoyts is good for the sector". In addition to ownership stakes in 51 Australian cinema sites and 514 screens, Village holds 16 per cent of the local digital film market and 14.5 per cent of the retail distribution of DVDs.
Ord Minnett analyst Nicholas McGarrigle said were there opportunities to improve margins across Village's mature businesses such as cinema and to sell its extensive content list to emerging subscription video on demand (SVOD) services.
"Cinema should be quite strong over the next couple of years because there's a strong pipeline," Mr McGarrigle said. He said while attendances were flat at theme parks in 2014, Wet'n'Wild in Sydney had done well in its first year, and price changes might help its performance.
In a result that Baillieu Holst analyst Nick Caley said was "pretty much in line across all divisions", Village Roadshow reported a 10 per cent annual profit decline on Thursday to $45.8 million. Income from continuing operations grew by 3 per cent, to $965.8 million, for the year to June, 2014.
The result followed a profit downgrade in June, due in part to the poor showing of the Johnny Depp film Transcendence.
Total theme park earnings before interest, tax, depreciation and amortisation came in at $105.6 million, with Wet'n'Wild Sydney contributing $14.5 million and Gold Coast $84.5 million.
Its local cinema arm reported $57.1 million in EBITDA, up from $53.7 million the previous year. The total cinema exhibition arm reported total EBITDA of $62.6 million, up from $58.5 million.
Village declared a final dividend of 14¢ plus a special dividend of 15¢. Its shares closed down 2.68 per cent, or 20¢, to $7.26, making its year-to-date fall to 2 per cent.
