Ardent chief Deborah Thomas to face bonus scrutiny after Dreamworld accident

Dreamworld operator Ardent Leisure will face some tough shareholder questions at its annual general meeting in Sydney on Thursday morning, including whether its chief executive – former Women's Weekly editor Deborah Thomas – could still earn bonuses totalling $670,000 for the year, following the accident that has left four people dead. 

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Community in disbelief after Dreamworld tragedy

Detectives say it could be weeks before there are any answers to what caused the tragic and fatal accident at Dreamworld.

Ardent's departing chairman, Neil Balnaves, confirmed to Fairfax Media on Wednesday that he is "deeply affected by the tragedy and will address it at the meeting to all shareholders".

ASX-listed Ardent owns Dreamworld and the neighbouring WhiteWater World on the Gold Coast. The theme park business represents 33 per cent of Ardent's earnings, excluding the Goodlife health clubs business, which was sold this week for $260 million. 

Since Ms Thomas' arrival in March 2016, she has undertaken a review of the business, which has led to the sale of health clubs and the looming disposal of its marina business, to focus on the Main Event operations in the United States.

The group said Dreamworld will remain closed for now as a mark of respect for the victims and their families.

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Allan McAskill​ from the Australian Shareholders' Association said "without diminishing in any way this tragedy" he expects the company to address "what financial impact the accident is expected to have on its business". 

As for the fact that Ms Thomas still stands to receive incentive payments of up to $670,000 this year, Mr McAskill said the ASA, which had already raised concerns about the structure of Ms Thomas' pay before the tragedy, will wait and see what the company has to say on this matter.

Chief Executive of Ardent Leisure and former Women's Weekly editor Deborah Thomas.
Chief Executive of Ardent Leisure and former Women's Weekly editor Deborah Thomas. Photo: Ryan Stuart

BHP chief executive  Andrew Mackenzie did not receive a bonus for 2016 following the fatal dam collapse at the Samarco iron ore mine and subsequent $8 billion loss. 

Investors remained in negative territory on Wednesday, selling down the shares by 14.5 per cent from $2.30 to $2.01 on light turnover. 

ASX-listed Ardent owns Dreamworld and the neighbouring WhiteWater World.
ASX-listed Ardent owns Dreamworld and the neighbouring WhiteWater World. Photo: Glenn Hunt

Brokers at Citi reacted by downgrading the stock from a BUY to a neutral, saying "require more clarity surrounding the cause of the incident and the duration of the park closure before we can recommend that investors".

The analysts said, based on a similar tragedy in the UK at the Alton Towers park in June 2015, which had two serious injuries but no fatalities, the operator, Merlin Entertainment, saw attendance fall by an estimated 20-30 per cent.

"Based on the Merlin experience, we expect Dreamworld attendance to be adversely impacted over the upcoming peak Christmas trading period, and beyond, as a result of negative press commentary," the Citi report says.

"Our revised forecasts assume Dreamworld continues to trade, but at lower attendances over 2017 financial year and maintenance capital expenditure increases over the short term. However, we see risk to the downside should the park be closed for an extended period of time."

The share price of Ardent's competitor, Village Roadshow Theme Parks, a wholly-owned division of Village Roadshow, was also impacted, falling 4.4 per cent or 23¢ to $5.02.

Village Roadshow operates the rest of the Gold Cast theme parks – Warner Bros. Movie World, Sea World, Wet'n'Wild, Paradise Country, Australian Outback Spectacular and Sea World Resort & Water Park, a 402-room hotel adjacent to Sea World.