Village Roadshow (VRL) shares took a pounding yesterday, losing more than 8% in value after the company came up short on an earnings and dividend forecast.
The company had previously told the market it expected to pay a special dividend of 25c a share, but yesterday that was trimmed to 15c a share.
And the company also downgraded its earnings outlook and the 2014 result now looks like being little better than 2013’s $51.08 million.
The 15c special dividend will see around $24 million returned to shareholders, Village said yesterday.
The cause of the reduced dividend was the less than expected revenue from the movie Transcendence which Village said had had "a generally disappointing" box office performance.
As a result of that disappointment, the film division of the business will write off $2 million and fall short of full-year earnings forecasts.
Village said that will see a lower than expected result for the company as a whole.
VRL 1Y – Village falls short on dividend, shares whacked
"In February 2014, when releasing the half year results to 31 December 2013, Village (VRL) indicated that it was on track to slightly exceed 2013 Net Profit After Tax before Material Items (“NPAT”).
"As a result of the generally disappointing box office performance of Transcendence and resulting approximately $2 million minimum guarantee write off, the Film Distribution division forecast results for FY2014 will not achieve earlier expectations.
"While the rest of the Film Distribution business and VRL’s other businesses remain robust, this write off, assuming no cash dividend from VREG, will mean that VRL’s 2014 NPAT is now likely to be in line with or slightly below FY2013 NPAT (net after tax profit)," directors told the ASX.
The company though held out hope of an extra dividend of 10c a share later this year or in 2015, subject to circumstances and the availability of franking credits.
The shares close at $7.25, down 8.3% after being down more than 9% at one stage.
