Australian entertainment group, Village Roadshow, is blaming the effects of SARS and the war in Iraq and their combined impact on global tourism for a projected full-year loss of up to A$30m.

Shareholders have been angered by the news that the group has decided to suspend dividend payment on both preference and ordinary shares for the year ending 30 June 2003.The news comes even after Village Roadshow sold its its 50 per cent owned Warner Village cinema circuit in the UK to boost its balance sheet.

Village Roadshow said its Gold Coast theme parks, including Sea World and Warner Bros Movie World, were ahead of budget at the half year, but recent events had seen international tourists, who represent 40 per cent of all attendances, halve. Domestic business has not offset the decline.Group managing director, Graham Burke, still insists the restructuring of Village Roadshow will result in a turnaround in the company's profitability in the medium term.

He plans to refocus the company as the pre-eminent independent Hollywood producer, with an appropriate balance of cash flow from its other assets spread over exhibition, theme parks, distribution and radio. Much rests, however, on the performance of the two sequels to The Matrix this year, which Burke hopes will bolster the company's fortunes.