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Cineworld profits hit by pension buyout

Sterling managed to result in higher finance costs last year, but overall growth is still looking good
March 10, 2017

Last year, more than 100m people walked through the doors of at least one of Cineworld's (CINE) complexes to watch a movie. That helped tip box office revenues for the year over the £500m mark, representing a year-on-year increase of 10.9 per cent at reported exchange rates. In the UK and Ireland box office revenues rose 3.9 per cent thanks to a hike in ticket prices and rising admissions. However, statutory profits were constrained due to a one-off cost of £4.8m in relation to the buyout of the defined-benefit pension scheme.

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A large part of Cineworld's business is now outside of the UK. The 'rest of the world' division includes Cinema City (across central and eastern Europe) and Yes Planet and Rav Chen (Israel) and box office revenues grew by more than a quarter to £177m, with ticket prices stable and admissions up 13.6 per cent. Expansion remains a top priority. Last year the group added 78 screens via eight new sites, four in the UK and four internationally.

Analysts at Investec expect pre-tax profits of £123m for the year ending December 2017, giving EPS of 37.1p, compared with £111m and 34.7p in FY2016.

CINEWORLD (CINE)

ORD PRICE:645pMARKET VALUE:£1.74bn
TOUCH:645-646p12-MONTH HIGH:656pLOW: 476p
DIVIDEND YIELD:2.9%PE RATIO:21
NET ASSET VALUE:246p*NET DEBT:43%

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2012**35938.317.310.6
2013**40630.912.610.1
201461967.322.113.5
201570699.730.717.5
201679898.230.819.0
% change+13-2-+9

Ex-div: 25 May

Payment: 22 Jun

*Includes intangible assets of £705m, or 262p a share

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