A blank sheet of paper behind a half year report?
Is it me or the timing on this one is suspicious?
I mean, without wanting to get too much into the numbers, a press release with the first half results for fiscal year 2006 (which, is always best to remind that for Disney runs from September 2005 to septemebr 2006) come out just a few days after the easter holidays.
This timing becomes even more suspicious when you notice that nothing is stated about the way in which the easter season (which one by the way? Oh….the one in town square?) went! Nor does it state anything about the way Buzz has impacted the park in it’s first weeks of Paris life!
Maybe it’s me but this is a little bit strange don’t you think?
Oh sure, the fiscal year half year closing mark was actually on the 31st of March, and (I know out of the way my personal business is run) that these kind of statements do take some time to be written , re written and then programmed for release.
Yet, maybe it’s my Business studies and Marketing backgrounds but releases stating that most of the net (which tripled by the way) was due to one-time restructuring gains a year earlier always sort of get my alarm antenna raised!
I mean the change is significant; a loss of 102 million euros in six months from 29.8 million euros a year earlier and operating loss increasing to 61.1 million euros from 51.2 million euros !
You can justify those numbers to me as much as you like! I understand the basic principles of balance sheet reclassification and therefore can accept any justifications you can throw my way!
“My” problem is that yet again first-half revenue decreased 1.4 % to 467 million euros from 474 million euros last year! Both theme park attendance and hotel occupancy were lower and spending per hotel room decreased yet again!
As much as all this is clearly justified in the press release by things like “timing of the easter holidays” , “one time restructurings” etc in my inquiring and suspicious mind it seems to want to mark something…..
…something like a new start!
You see, I though and re-thought about this and then I kind of realised (and hoped) that the last words, thrown into there by Karl Holtz like some sort of understatement (yet a very important one) state that:
“Due to a strong Easter vacation period in April, our results to date reflect stable revenues and good cost containment. The local Ile de France traffic, including visitation from the Paris tourist market, has been challenging at certain times this year, possibly impacted by social unrest during key periods.
With the launch of the popular and highly repeatable Buzz Lightyear Laser Blast®, as well as some innovative offers, we are working to attract more local visitors for the critical summer season, while continuing to target increased visitation from all of our markets.”
Karl is looking into having a brand new start! He told his people to forget everything they have done before (and this is the reason why in another previous part of the report it seems as if Buzz Is the first of the new attractions since the restructuring, forgetting about Mission 2 and everything before it) as well as forgetting the “Need magic” campaing in favour of the newer “dreams come true” one etc.
- this guy is effectively trashing 4 years (2002-2005) of failures in order to have a blank sheet of paper on which to work on! (Which might just be what the company needs)
Hope it works because the stock is pretty much worthless….since a bit too many years!
Just my rumblings!
Your take?
April 27th, 2006 at 9:00 pm
I think the answer to DLRP’s financial ills is simple, but costly:
1. Invest in staff training so the resort becomes renouned for it’s customer service experience, and not a begrudging shadow of it’s American counterparts. How many people moan about the lack of magical interaction between guests and cast members at the moment? So why bother going there??
2. Weatherproof more of the attractions so that the winter weather becomes meaningless.
3. Build an indoor/outdoor swimming resort such as Typhoon Lagoon / Blizzard Beach.
4. Expand Disney Studios (which I guess they are beginning to do) so that it is more than a 20 minute walk around the perimeter.
“Build it and they will come”. They’ve started it build it, but no-ones got the vision to complete it. By the way I’m a DLRP SHareholder so I have a vested interest in success!
April 28th, 2006 at 11:57 am
I agree with Robbo on this. He raises some good points, that I would like to comment upon.
1. As far as staff training goes, it seriously needs to be improved. But I consider other elements. Take it back to the figures. Each year, since 2000 roughly, more and more temporary workers (interimaires) have been called in to do the casual jobs, or events. Their motivation is purely financial, and these people rarely care about the company(ies) that they work for. For a minority of these people, they are the ones who get offered a CDD contract for a season.
1a.Along with staff training, comes the age old challenge of “monkeys and peanuts”. When you pay little for a certain level of quality, you get very little quality. In this sense, it is important for DLRP to come to terms with the financial reality outside of their own “small world”. Rent prices are going up.Transport costs are increasing. Creche costs are increasing. Inflation and interest rates are going up. More and more CM’s are turning towards “Action Social” for financial help with debts and bills.
To increase the salary levels to a level that is ABOVE inflation, would certainly help the majority of CM’s on site, and perhaps give the necessary boost to moral and CM “friendliness”. After all, pay peanuts, and you get monkeys. It is this that reflects directly on the quality offered to the guests at our French park.
2.Weatherproofing more of the attractions. I agree with this idea, but care should be taken to not turn DLRP into a Parisien Centre Parcs. I believe equally that DLRP Management should stop hiding behind the feeble excuse of the weather. It is true that we do not have sunshine all year round, but is the weather the major factor that stops a family from coming to DLRP?
3.Typhoon Lagoon/Blizzard Beach. This would have been in place since 1995, if everything had gone correctly to plan. We all know it didn’t. I believe that this would be a valued addition to the Resort, but do not believe that it will drastically improve attendance figures. Care has to be taken to ensure that the right clientele is allowed access to such an establishment. I say this, as frequently on Sunday afternoons in Disney Village, many gangs and groups hang around, giving a negative image of the resort, and creating major problems for the resort security teams. The same can be seen on a Saturday afternoon at the Val d’Europe Shopping Center.
4.Many things have been said about the Studios on the Forum and on various other sites. We all know that Toon Studios will be coming soon, and that the Tower of Terror will soon be added to the WDS. It is coming, but many fans (myself included) would seem to lack patience, as they want to see these new attractions in place faster than possible.
It will come, and WDS will get bigger. Let’s all hope that the expansion comes in enough time to turn round the chronic financial situation of the black sheep in the Disney Empire.
All the Best,
MR E