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Cineworld completes Regal acquisition

Cineworld is now the second-largest cinema company in the world after the acquisition of US-based Regal Entertainment
Cineworld completes Regal acquisition

The $3.4bn (£2.4bn) acquisition of Regal Entertainment Group makes Cineworld (CINE) the second-largest cinema company in the world by number of screens. The deal has significantly increased the group’s footprint in the US – the world’s largest cinema market – and it's thought bosses could claw back $100m in cost savings. Chief financial officer Nisan Cohen admitted emerging markets might offer better organic growth prospects, but he's confident mature markets such as the US still offer opportunity.

IC TIP: Hold at 249.4p

Cineworld is planning to open 10 cinemas across the pond under the Regal brand this year and nine across the rest of the world, compared with nine new sites that opened last year. At group level, admission improved by 3.5 per cent to 104m movie-goers, contributing to a 10.5 increase in box-office sales to £554m.

Analysts at Investec expect £278m in pre-tax profit in 2018, giving EPS of 18.8p, compared to £128m and 17.3p in 2017.

CINEWORLD (CINE)   
ORD PRICE:249.4pMARKET VALUE:£3.42bn
TOUCH:249.2-249.4p12-MONTH HIGH:329pLOW: 210p
DIVIDEND YIELD:nilPE RATIO:15
NET ASSET VALUE:57p*NET DEBT:36%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2013**40630.95.54.4
2014**61967.39.75.9
2015**70699.7

13.5

7.7
2016**79898.213.78.4
2017**89112116.49.1
% change+12+23+20+9
Ex-div:7 Jun   
Payment:6 Jul   

*Includes intangible assets of £723m, or 53p a share

**EPS and DPS adjusted for February 2018 rights issue