The runaway successes of Mamma Mia! and Sex in the City allowed the UK's second largest cinema operator to comfortably beat City expectations. Indeed, box office revenues grew 6.4 per cent in the period to £197.5m, despite the delay of the sixth instalment of the Harry Potter series - Harry Potter and the Half Blood Prince. Admissions have also held firm at 45.1m, although market share during the period slipped slightly from 23.7 per cent to 23.3 per cent.
Management has also passed through a 6.3 per cent hike in ticket prices while growing the average retail spend per person by 2.4 per cent to £1.71. Moreover, expansion plans have continued with the opening of two new cinemas in the period, and management still intends to open another two this year. However, the three planned for 2010 are likely to be affected by the lack of available financing for developers.
Cineworld now has the largest digital estate in the UK - it acquired an additional 74 digital projectors in January 2009 - with a total 148 digital screens, and Cineworld now has 50 per cent market share in the 3D arena. So, with 13 3D films among the string of blockbuster releases due in 2009 - which also include the latest instalments of the Harry Potter and Terminator movies - management remains confident on the outlook.
Cazenove Research has upgraded its forecasts and now expects 2009 pre-tax profits of £29.2m, giving EPS of 14.9p (13.6p in 2008).
CINEWORLD (CINE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 116p | MARKET VALUE: | £164.4m | |
| TOUCH: | 115-116p | 12-MONTH HIGH: | 153p | LOW: 93p |
| DIVIDEND YIELD: | 8.2% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 97p* | NET DEBT: | 86% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 279 | -7.70 | -22.3 | Nil |
| 2007 | 285 | 12.4 | 24.5 | 9.50 |
| 2008 | 298 | 27.6 | 14.3 | 9.50 |
| % change | +5 | +123 | -42 | - |
Ex-div:20 May Payment:17 Jun *Includes intangible assets of £216.8m or 153p per share | ||||
