"If there had to be a slump in advertising - what better year to have it than one where we had a great product line-up," says Cineworld chief executive Stephen Weiner. So, despite a 33 per cent decline in screen advertising revenues, cinema operator Cineworld was still able to post strong revenue growth largely due to the runaway success of Slumdog Millionaire.
These results cover the 27-week period to 2 July, but even on a 26-week pro-rated basis, revenues grew by almost 14 per cent. Mr Weiner attributes this to the successful movie line-up, which included blockbusters such as Star Trek and Angels and Demons. There is also a strong pipeline of releases in the second half, including Sherlock HolmesHolmes, a sequel to Twilight and a remake of Fame, as well as 3D movies Final Destination 4 and Avatar.
Admissions rose 12.6 per cent over the six-month period, and coupled with a 5.8 per cent hike in average ticket prices to £4.59, this has propelled box office revenues up 24.3 per cent to £114m, or 19.8 per cent on a pro-rated basis. Retail revenue was up 16.6 per cent, with average retail spend per customer broadly flat at £1.71. This was primarily the result of a change in focus to drive greater mid-week admissions, when retail spend is usually lower.
Cineworld was, however, hit by the Bollywood strike in India, which resulted in delays to the release of Bollywood movies overseas. So, revenues from Bollywood movies - which account for 5 per cent of group revenues - fell 60 per cent in the first half. The dispute has since been resolved and a return to normal trading patterns is expected.
Cazenove Research expect full-year pre-tax profits of £29m, giving EPS of 14.8p (13.6p in 2008), rising to £32.6m and 16.5p, respectively, in 2010.
CINEWORLD (CINE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 163p | MARKET VALUE: | £231m | |
| TOUCH: | 162-164p | 12-MONTH HIGH: | 170p | LOW:92.5p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 96p* | NET DEBT: | 81% | |
| 26 weeks to 26 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 137 | 8.7 | 4.2 | 3.2 |
| 2009** | 162 | 11.6 | 7.3 | 3.2 |
| % change | +18 | +33 | +74 | - |
Ex-div: 2 Sep Payment: 2 Oct *Includes intangible assets of £216.8m, or 153p a share **27 weeks to 2 Jul | ||||
