The Waratah struggled. According to Grant Aldous' the Stop-over that Stayed, the Waratah suffered from competition with the nearby Moonee Ponds and New Ascot theatres, and soon the theatre was bought out by Hoyts.
Even worse than their financial troubles though, the Waratah also suffered from banditry. In November 1921, in Flemington, William Longley, a 21 year old employee, was hit over the head and robbed of the days takings (200 pounds) from the Waratah. Then in August 1937, shots were fired when the managers of the Waratah and the Ascot Vale Bank were attacked. Cinema goers "ducked and ran for shelter" and the bandits made a get-away with the days takings from the Waratah (down to 21 pounds this time) in a stolen car.
In 1935 Hoyts refurbished the Waratah, hosting a gala reopening of the Waratah as "The Hoyts New Plaza Theatre" in August (see the Essendon Gazette, 8/8/1935). The relaunched theatre was claimed to have "every modern embellishment without sacrifice to homely comfort", and also featured RCA high fidelity talkie equipment.
A highpoint in the life of the cinema was in 1938 when the star of the Essendon Football Club, Dick Reynolds, won the Brownlow medal for a third time and a celebratory party was held for him and his team mates at the Waratah (Essendon Gazette 15/09/1938).
Sadly, in 1959 the Waratah closed and was demolished, being replaced with a petrol service station (Essendon Gazette 25/02/1959).
PS. This post was written after I looked into the history of the Waratah for an inquiry from someone who remembered living near the Waratah. If you have memories of the Waratah, or any of the other theatres in Moonee Valley it would be fascinating to hear from you.