The Ardent Leisure Group Ltd share price has plunged over 67% lower today to a price of 47 cents and is one of the worst performers on the ASX today.
However, it’s overall good news for shareholders as this was due to an announcement released by the company last week. Shareholders had voted for a return of capital after ALG completed the sale of its Main Event business in the United States to Dave & Busters for 1.1 billion dollars.
After this announcement, Ardent confirmed it will distribute $455.7m (95 cents per share) to shareholders in the form of:
· A return of capital of $221m (46 cents per share)
· An unfranked dividend of $234.7m (48.9 cents per share)
Based on last week’s share price of $1.40, the 95 cents distribution represents a massive 67% yield.
However, investors needed to own the company’s shares at the market close on Monday in order to receive this massive payout. Therefore, if you bought Ardent Leisure shares today will not receive this capital return or dividend. Instead, the rights to these returns remain with the seller.
Ardent management said that the remaining funds from the Main Event sale will be used to pay off debt and support its theme parks business. This includes investment in new major rides and attractions and redevelopment of existing attractions.
Company Chairman Dr Weiss stated on the future prospects of the company:
"Further investment in this business will better position it to benefit from expected increases in leisure spending, including as a result of increased levels of interstate and international travel to Queensland following the suppressed levels experienced during the COVID-19 pandemic,"