I have expressed my views on the wonderla thread. COVID has obviously hit the amusement park business in a very adverse way. This business is consumer discretionary in nature and is strongly impacted by economic cycles, the global leader Disney is a shining example of this. Now getting to facts, here are the detailed business numbers.
BANGALORE | FY14 | FY15 | FY16 | FY17 | FY18 | FY19 | FY20 | Increase |
---|---|---|---|---|---|---|---|---|
Total revenues (cr.) | 86.30 | 103.26 | 114.12 | 118.06 | 114.60 | 124.32 | 110.50 | 4.21% |
No of visitors (in '000) | 1’188.00 | 1’248.90 | 1’187.10 | 1’040.50 | 964.20 | 1’057.10 | 901.50 | -4.50% |
Avg. revenue per visitor | 726.00 | 826.80 | 961.00 | 1’134.00 | 1’188.00 | 1’176.00 | 1’225.70 | 9.12% |
Avg. ticket revenue | 898.00 | 934.00 | ||||||
Avg. non-ticket revenue | 278.00 | 292.00 | ||||||
KOCHI | FY14 | FY15 | FY16 | FY17 | FY18 | FY19 | FY20 | Increase |
Total revenues (cr.) | 63.12 | 73.10 | 82.03 | 84.84 | 80.89 | 70.57 | 75.08 | 2.93% |
No of visitors (in '000) | 1’103.00 | 1’091.60 | 1’049.00 | 999.10 | 880.80 | 757.00 | 775.80 | -5.70% |
Avg. revenue per visitor | 572.00 | 670.00 | 781.90 | 849.00 | 918.40 | 932.20 | 967.70 | 9.16% |
Avg. ticket revenue | 694.00 | 724.00 | ||||||
Avg. non-ticket revenue | 238.00 | 244.00 | ||||||
HYDERABAD | FY14 | FY15 | FY16 | FY17 | FY18 | FY19 | FY20 | Increase |
Total revenues (cr.) | 57.09 | 64.25 | 75.60 | 74.22 | 9.14% | |||
No of visitors (in '000) | 619.80 | 641.90 | 709.00 | 703.70 | 4.32% | |||
Avg. revenue per visitor | 921.00 | 1’001.00 | 1’066.30 | 1’057.70 | 4.72% | |||
Avg. ticket revenue | 776.00 | 767.00 | ||||||
Avg. non-ticket revenue | 290.00 | 288.00 |
In good times, an amusement park can do upto 100 cr. in revenue. As and when COVID normalizes, growth will come from operationalization of the Chennai park and hopefully the Bhubaneswar park (which is still not sure). In any case, revenue for the company can be in the vicinity of 400 cr. with 4 operational parks and 1 operational resort in a 4-5 year timeframe. In normal times, they can do PBT margins in the range of 30-35% with PAT margins of 20-25%, implying PAT of 80-100 cr.
When I created the position, prices were in the range of 100-150 and my estimate for fair value of the business 5-years hence was ~400 (giving an IRR of 25%+). There have been no changes in my estimates so far. Given that the position had run up recently and went above my target weight of 2%, I trimmed a bit to bring it back to 2%. Hope this clarifies my thought process.