AusLeisure

While its share value has been fluctuating in recent weeks, Ardent Leisure Group is reportedly “in a strong position to capitalise on a recovering domestic and international tourism sector” according to WAM Capital Limited.

With a mandate to invest in the “most compelling undervalued growth opportunities in the Australian market”, WAM Capital Limited - listed investment company run by Wilson Asset Management - advised last week in its June 2022 investor update yesterday that Ardent Leisure was a positive contributor to the fund’s performance in June.

The fund manager explained “with Ardent Leisure Group’s theme parks being materially impacted throughout the Coronavirus pandemic, we believe the business is in a strong position to capitalise on a recovering domestic and international tourism sector.

“The company’s operating cost base has been structurally lowered, with reinvestment in the rides and attractions, and improving public perception, which we expect to underpin a strong recovery in its profitability in FY2023.”

With, as of last week, Ardent Leisure’s share price having fallen by 60% this month following a capital return to shareholders - in the form of a special dividend of 95 cents per share – WAM suggest that theme park operator’s share price is now way below what it should be, adding “w believe Ardent Leisure Group’s current share price materially undervalues the company relative to global peers, while opportunity exists to unlock further value via development of excess land assets.”

With its low share price, the business could be ripe for a takeover.

Last month, The Australian suggested that an unnamed global private equity fund was looking at making such a move.

Image: Dreamworld's latest attraction, The Steel Taipan.

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