Village Roadshow's exhibition arm has been given substantial credit for VRL's net profit after tax of $23.5m (A$45.3m) for the half-year to December 31, up 100% on the previous corresponding period.

Only 15 months ago shareholders were told that VRL's unsatisfactory profits of the past two to three years were entirely due to its international exhibition interests, but since then five of the 18 territories have been sold off.

Profit from the remaining continuing operations increased only marginally to $39.9m (A$76.8m) and net profit after tax from these operations decreased 35% from $35.9m (A$69m) to $23.5m (A$45.2m) due to the sell off of the radio group and a lower contribution from the production division.

"I am delighted to see the turnaround that exhibition has made and attribute that both to our restructuring efforts as well as to stronger product," said managing director Graham Burke.

In addition to benefiting from the sale of various cinema estates, for those that remained attendances were up 10% across all territories for sites opened for the full period and 19% across all sites. Harry Potter & The Philosopher's Stone and Monsters Inc. helped, as has Lord Of The Rings since.

VRL is also to make a significant commitment to its film production division, believing it has the highest tangible growth potential of all divisions because of film "franchises" such as Cats & Dogs and especially Matrix Reloaded and Matrix ... The Revolutions. The division's partner is Warner Bros.

The board is to make an interest bearing $50m loan to its affiliate, Village Roadshow Films (BVI), which provides funding to the group's production activities, but is operating in an increasingly conservative US banking environment.

The production division's before tax profit fell to $8.6m (A$16.5m), down from the $19.2m (A$36.9m) of the corresponding previous period because of less films being produced than the usual eight to 10 films per annum. The before tax profit for exhibition, prior to significant items and discontinued operations, was $4.5m (A$8.6m) compared to a previous loss of $2.9m (A$5.5m).