As the UK ponders the possibility of an economic slowdown, bosses at cinema chain Cineworld (CINE) aren't flinching. Deputy chief financial officer Nisan Cohen says the company is in "an even better position" than before the 2008 financial crisis, largely thanks to rapid expansion via the merger with Polish group Cinema City in 2014. What's more, Mr Cohen has faith that people still want to spend disposable income on experience-based outings rather than material goods during rounds of financial belt-tightening.
As for the here and now, the group is looking forward to far stronger second half as blockbusters including the latest Harry Potter franchise film Fantastic Beasts and Where to Find Them and the next Star Wars film line up for release before the year-end. First-half admissions grew 2.7 per cent to 46.1m in the opening period, thanks to positive receptions for movies such as Deadpool, The Jungle Book and Captain America: Civil War.
The group added four new sites, amounting to 45 screens, in the reported period. Post period-end, it bought five cinemas from Empire Cinema, adding 64 further screens, including its iconic site on Leicester Square.
Analysts at Peel Hunt expect pre-tax profit of £110m for the year ending December 2015, giving EPS of 32p, compared with £100m and 30.3p in 2015.
| CINEWORLD (CINE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 586p | MARKET VALUE: | £1.56bn | |
| TOUCH: | 585.5-586.5p | 12-MONTH HIGH: | 605p | LOW: 455p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 232p* | NET DEBT: | 41% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 329 | 46.8 | 14.0 | 5.0 |
| 2016 | 357 | 30.6 | 9.2 | 5.2 |
| % change | +8 | -35 | -34 | +4 |
Ex-div: 18 Aug Payment: 9 Sep *Includes intangible assets of £626m, or 236p a share | ||||
