Much to the relief of its long-suffering shareholders, the Village Roadshow Ltd (ASX: VRL) share price is heading in the right direction at long last.
In afternoon trade the entertainment company's shares are up 4.5% to $3.23.
What happened?
This morning Village Roadshow released its half-year results which revealed a 5% decline in revenue to $515.2 million.
Although net profit after tax increased to $171.9 million from a $25.9 million loss in the prior corresponding period, this was the result of a gain from the sale of its 50% share in its Singapore cinema business and the sale and leaseback of the land that its theme parks operate on.
Excluding this means net profit after tax came in at just $40,000, compared to a $19.2 million net profit in the first-half of FY 2017.
Much of this was already priced into its share price, which means today's gain is likely to be a relief rally. Especially considering there has been no further deterioration in its business performance since its last update.
In fact, investors may be pleased to see management talk up improving conditions for its theme parks at long last after being impacted by the tragedy at Ardent Leisure Group (ASX: AAD) operated Dreamworld in late 2016.
On top of this, four blockbuster movies planned for release before the end of FY 2018 are expected to give the cinema side of its business a much-needed lift. These include The Avengers, Deadpool 2, Jurassic World, and Solo: A Star Wars Story.
Should you invest?
I think there is a chance that Village Roadshow's shares have now bottomed and there could be gains ahead for shareholders if its performance continues to improve.
But I wouldn't be in a rush to buy shares today. I think there's still a long road ahead for the company and it will need to deliver a few quarters of consistent growth before I part with any cash.
In the meantime, I see more value in the shares of rivals Ardent Leisure and Event Hospitality and Entertainment Ltd (ASX: EVT).
