The Event (ASX: EVT) share price closed almost 5% higher today despite a major revenue drop in the first half of FY21. Let’s take a look.
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At the close of trading, the Event share price had bumped up 4.57% to reach $10.53. Here are some highlights from the report.
Event share price battles through COVID-19
In today’s release, the cinema and entertainment company repeatedly noted industry constraints during the first half of FY21 brought on by the coronavirus pandemic.
Group revenue was down 58% at $294 million for the period ending 31 December 2020. This compared to $466 million in group revenue for the same period in FY20.
Event attributed the drop on the impacts of COVID-19, adding that this made comparisons to the prior comparative period (pcp) data “less useful”.
The group advised it deployed strategies to reduce its normalised earnings before interest, tax, depreciation and amortisation (EBITDA) loss for the half. The result saw it stem EDITDA losses from around $20 million per month at the height of COVID lockdowns in March to June 2020, to an average of $5 million per month. This represents a 73% improvement.
CEO weighs in on navigating a pandemic
Commenting on the result and business environment, Event CEO Jane Hastings said:
The result was defined by the impact of COVID-19 government mandated restrictions materially impacting our ability to generate revenue. In response, within every division, we have transformed every aspect of our business to be able to respond to the pandemic constraints.
We secured more than our fair share of scarce revenue opportunities whilst transforming and mitigating cash-burn. Swift and active cost management resulted in more than $155 million in savings from March to December 2020, excluding government subsidies, and excluding the benefit of most of the rent relief negotiated with landlords which will be recognised once agreements have been signed.
We have already seen the pent-up demand for our businesses, which was reflected in the outstanding result in Thredbo despite capacity restrictions of up to 50%, strong leisure demand in hotels, and cinemas achieving an EBITDA positive result in January despite the Australian nationwide box office being down 50%.
Event Hospitality share price snapshot
Over the past year, the Event share price has lost 15.42%, but its shares are trading 6.11% higher year-to-date.
Event Hospitality has a market capitalisation of $1.6 billion with 161.2 million shares outstanding.
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*Returns as of February 15th 2021
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Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.