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Cineworld first-half surge

Cineworld has reported a first-half 22 per cent sales rise and prospects for the third quarter are strong.
July 3, 2013

Long-term tip Cineworld (CINE) has reported storming first-half sales growth. The cinema group's 21.9 per cent rise in sales reflected its acquisition of art-house operator Picturehouse, but progress at Cineworld's multiplex cinemas was far from overshadowed, with sales jumping 10.5 per cent.

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The company invested heavily last year in digital projectors, improved customer service, products and marketing. While the strong results provide some evidence that the investment is paying off, the group has also benefited from comparisons with a period last year when the European football championships emptied cinemas. Indeed, broker Investec calculates that Cineworld's sales in the last seven weeks of the first half, when the tournament took place last year, surged by 30 per cent or more.

Prospects are looking good for the third quarter, too, given a strong release schedule and comparisons with the Olympics period last year. But the end of 2013 will be tougher unless a movie comes along to challenge the last Bond film, which help boost industry sales by 22 per cent in the last three months of 2012.