WB posts four per cent revenue increase for quarter 

Ski resort's growth closely linked to Intrawest's recent public offering, says analyst

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Whistler Blackcomb (WB) announced its fourth quarter financials Wednesday, Dec. 11 and posted a four per cent increase in revenue compared to the same three-month period in 2012 ending Sept. 30.

The total revenue increase of $1.2 million was attributed to a rise in visitation numbers and average spend per visit, which rose by four per cent to $75.76 per visit.

"I am pleased with our performance in the 2013 fourth quarter and fiscal year," said Whistler Blackcomb president Dave Brownlie. "In particular, the growth in our bike park, hiking and sightseeing businesses in the fourth quarter, combined with record hotel occupancy rates in Whistler in the summer of 2013, demonstrate the potential of our summer business opportunity."

Visits to the ski resort for sightseeing, hiking and its mountain bike park totalled 536,000, which sets a new record and is up four per cent compared to the same period in 2012.

The fourth quarter saw a 3.9 per cent increase in revenue per other visit, which was attributed to pricing improvements and stronger sales in most of the corporation's ancillary businesses, particularly in retail operations.

Operating expenses for the quarter increased by $641,000, or three per cent over the same period last year as a result of increased utilities, summer maintenance costs and summer labour costs.

Highlights for the fiscal year ended Sept. 30 include a 4.8 per cent increase in effective ticket price (ETP) and a 4.7 per cent increase in revenue per total visit, reflecting WB's growth in guest spending in its ancillary businesses despite fewer destination visits, 775,000, compared to 2012.

"If you look historically at where we have been in the destination market, it's probably closer to a million visits, and our goal is to grow that over time and that will have a significant positive impact on our overall business model as we go forward," Brownlie said.

"We remain focused on growing our destination visits, which will improve our revenue per visit as destination visitors typically spend more on ancillary businesses," he added.

Looking ahead, Brownlie pointed to this year's investment in the new Crystal Ridge and Harmony 6 chairs as "a key element to drive growth." Both features were completed on schedule and on budget. Crystal Ridge Express opened last Saturday, Dec. 7, while the grand opening of Harmony 6 is planned for this Saturday, Dec. 14.

This year also marked the refinancing of WB's $261 million of senior secured and second lien debt with a new $300-million five-year senior secured revolving credit facility.

"This refinancing will result in a significant reduction to our interest expense and provide us with more financial flexibility to pursue investment opportunities," said Brownlie. "This is an important milestone in the execution of our strategy and sets a strong foundation for our business going forward."

Meanwhile, the U.S.-based developer and owner of some of the world's leading ski resorts, Intrawest, has filed documents to raise up to $100 million via an initial public offering (IPO).

Travel and leisure equity analyst Chris Agnew sees the move as "absolutely" linked to Whistler Blackcomb's 60 per cent stock growth over the last year.

"If you've got a strong IPO market, that helps," said Agnew of MKM Partners in Stamford, CT. "If companies are going to go public, timing is favourable from that perspective, it helps valuation, and there's also demand for new issues."

He also said the IPO filing bodes well for the prospects of a slowly rebounding U.S. economy and general consumer confidence in the North American ski resort market.

"I think it's a healthy sign," he said. "If you think about the fact you've had two challenging seasons from a weather perspective and the economy's still been lukewarm, it's been good."

Then-publicly traded Intrawest Inc. was acquired and taken private in 2006 by New York-based Fortress Investment Group in a transaction valued at $2.8 billion USD. Fortress suffered during the ensuing credit crisis of 2008, and cash was raised through asset sales, which included the sale of part of Whistler Blackcomb.

WB then raised $300 million in a 2010 public offering through the sale of 25 million shares. In late 2012, Intrawest sold the rest of its stake in WB to Denver-based KSL Capital Partners for about $116 million in gross proceeds.


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