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Ardent Leisure share price continues to fall amid safety scrutiny
Ardent Leisure's share price has dipped to a low of $1.98 today following the tragic incident that saw four people die on the Thunder River Rapids ride at Dreamworld.
Investor confidence in the company has been buffeted not only by the fatalities but by ongoing media revelations about safety procedures at the Gold Coast theme parks as well as weekend revelations that Ardent Leisure's board made a series of decisions in the aftermath of the tragedy contrary to the advice contrary to its advice of its specialist crisis manager Newgate Communications.
Amid massive media scrutiny of Dreamworld operations, operations of the theme park's Cyclone/Hot Wheels SideWinder rollercoaster have been questioned.
With the Queensland Government having announced a month-long "safety blitz" on theme parks, Workplace Health and Safety Queensland (Worksafe Queensland) has contradicted a claim from Dreamworld that it had operators approved the ride staffing numbers.
Senior Dreamworld staff having just one staff member operate the ride when the manufacturer's guidelines specify two, "preferably three staff".
Dreamworld Chief Executive Craig Davidson had claimed that having one member of staff operate the ride was appropriate because of modifications it had made to the ride and had been approved through "four separate tiers".
As of yesterday afternoon, a Worksafe Queensland spokesperson rejected Davidson's claim the safety regulator had approved of staffing levels.
The spokesperson advised "under the Work Health and Safety Act 2011, Workplace Health and Safety Queensland does not approve staffing levels for theme park rides.
"Because of the range of factors that must be taken into account such as number of patrons and competence of staff, the duty is on the person conducting a business or undertaking to assess the risks and put in place appropriate controls to ensure any risks to health and safety are minimised.
"This would include the number of staff required to operate a ride safely."
Worksafe Queensland has demanded Dreamworld hand over all documentation relating to the ride.
Weekend media reports also focussed on crisis manager, Newgate Communications, threatening to dump Ardent Leisure when group Chairman Neil Balnaves and Chief Executive Deborah Thomas made a series of decisions contrary to its advice.
Immediately after the fatal incident, Newgate had urged Ardent to close the park for a minimum period of two to three weeks, at least until all four people had been buried - out of respect to their families.
That advice was rejected at the time, with the Ardent board deciding that a one day closure would be enough for staff to undergo counselling.
At the company’s AGM last week, Balnaves explained “the advice we have from psychologists and a lot of people we have been working with is that it’s better that people get back to work and get together with their comrades ... rather than being concerned about their jobs and sitting at home in isolation.”
Widely condemned, and with Queensland Police blocking the re-opening, Ardent Leisure has since kept the theme park closed.
However, the approach of the company in the 48 hours after the tragedy has been seen to have caused the company massive reputational damage.
The hierarchical style of Ardent Leisure’s board, which has been criticised by several former executives over recent years, saw it proceed with its planned AGM and seemingly fail to appreciate the seriousness of the situation.
With no planned date to reopen Dreamworld, the long-term financial implications of the fatal incident could be very serious for Ardent – whose share value has dipped more than a third in the past week.
A research note from Bell Potter analyst John O’Shea reported in the Australian Financial Review suggested that when Dreamworld reopens “attendances will be adversely impacted.”
O’Shea continued “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.”
He estimated Dreamworld’s visitor numbers will decline about 20% in the 2017 financial year and then gradually improve.
Images: Dreamworld, lower image shows the Thunder River Rapids ride.
29th October 2016 - QUEENSLAND GOVERNMENT TO UNDERTAKE ‘SAFETY BLITZ’ ON THEME PARKS
28th October 2016 - DREAMWORLD DEFENDS SAFETY RECORD AFTER REVELATIONS OF PAST BREACHES
27th October 2016 - ARDENT LEISURE IN TURMOIL AFTER DREAMWORLD RIDE TRAGEDY
25th October 2016 - ARDENT LEISURE SHARES FALL AFTER DREAMWORLD TRAGEDY
25th October 2016 - FOUR KILLED IN TRAGIC INCIDENT ON DREAMWORLD’S THUNDER RIVER RAPIDS RIDE
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