Join our community of smart investors

Cineworld boosted by strong releases in 2015

A weaker film slate this year makes it difficult to beat record admission numbers, but new formats mean profits should keep up
March 11, 2016

The iconic James Bond and Star Wars film franchises proved an undoubted boon for Cineworld (CINE) and pushed admissions up to a record 93.6m in 2015. This includes the fast-growing businesses in central and eastern Europe and Israel, where visitor numbers rose by a third to 42.7m. UK audience numbers actually dipped marginally, down 0.4 per cent, but a jump in domestic profits for the Chiswick-based group suggests new screening formats - which attract higher admission prices - are working.

IC TIP: Buy at 489p

Management opened a record 18 sites last year, 10 of which were on home soil. These openings, together with the refurbishment of existing sites in the UK, will be key to the success of the domestic division. Chief executive Mooky Greidinger said refurbishing locations such as Milton Keynes, where Cineworld's first 4DX screen was installed, have "encouraged us to do more". He believes a quarter of the group's capital expenditure this year will go towards refurbishment work. The group already has 17 Starbucks concessions, but Mr Greidinger said that number could grow to represent a third of the 100-strong UK estate.

Analysts at Numis expect pre-tax profits of £106m this year, leading to EPS of 31.4p, compared with £99.7m and 30.4p in 2015.

CINEWORLD (CINE)
ORD PRICE:489pMARKET VALUE:£1.30bn
TOUCH:487p-489p12-MONTH HIGH:599pLOW: 442p
DIVIDEND YIELD:3.6%PE RATIO:16
NET ASSET VALUE:202p*NET DEBT:46%

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2011**34833.415.19.9
2012**35938.317.310.6
2013**40630.912.610.1
2014^61967.322.113.5
201570699.730.717.5
% change+14+48+39+30

Ex-div: 9 Jun

Payment: 7 Jul

*Includes intangible assets of £592m, or 223p a share

**Adjusted for Feb 2014 rights issue with the exception of the 2013 dividend

^53-week period