Last year was one of change for cinema operator Cineworld (CINE). The Picturehouse acquisition in late 2012, which led to a costly tussle with the Competition Commission, the mammoth buy-out of Polish chain Cinema City International and a new chief executive for the first time in 18 years make the company look quite different from a year ago.
Pre-tax profits took a double-digit dive after the group incurred £6.1m in transaction costs from the CCI deal and another £1.2m in reorganisation costs following the Competition Commission’s investigation into the Picturehouse chain. The dividend has not been adjusted for a post-period rights issue to fund the Polish deal, but if shareholders took up their rights - which 95 per cent of investors did - they would have experienced 6 per cent growth in the cash dividend.
The acquisition of CCI, which has cinemas in eastern Europe and Israel, was completed only last week, making Cineworld the second-largest operator in Europe after rival chain Odeon. But for now, UK expansion is back on the agenda. During the year the group opened a nine-screen complex in Wembley and a 10-screen cinema in Gloucester Quay. 2014 will see new openings in St Neots, Swindon and Telford.
Brokerage Investec expects pre-tax profits of £66m in 2014, giving EPS of 21.3p.
CINEWORLD (CINE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 312p | MARKET VALUE: | £822m | |
| TOUCH: | 311-312p | 12-MONTH HIGH: | 402p | LOW: 239p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 74p* | NET DEBT: | 58% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 333 | 30.8 | 14.4 | 10 |
| 2010 | 343 | 30.4 | 14.8 | 10.5 |
| 2011 | 348 | 33.4 | 16.8 | 11 |
| 2012 | 359 | 38.3 | 19.2 | 11.8 |
| 2013 | 406 | 30.9 | 14.0 | 10.1** |
| % change | +13 | -19 | -27 | -14 |
Ex-div: 4 Jun Payment: 3 Jul *Includes intangible assets of £250m, or 95p per share **Not adjusted for February 2014 rights issue | ||||
