Cineworld Group plc (LON:CINE), one of the world’s leading cinema groups, announces its trading update for the period 1 January 2019 to 12 May 2019.
· Group trading in line with our expectations
· As anticipated, revenue performance softer during the period due to the difference in timing of major releases
· Opened four new sites during the period with Regal refurbishment and integration programme progressing well
· Record-breaking performance over past three weeks driven by Avengers: Endgame with strong film slate scheduled for remainder of the year
· Unlimited scheme set to launch soon in the US
· The Group is on track to perform in line with our expectations for the year
Pro-forma(1) revenue movements for the year were as follows:
|
|
Actual ($) |
|
Constant Currency(2) ($) |
||||||
|
|
Group(1) |
US(1) |
UK & Ireland |
ROW(3) |
|
Group(1) |
US(1) |
UK & Ireland |
ROW(3) |
|
Total revenue |
(9.4%) |
(11.0%) |
(11.1%) |
6.6% |
|
(9.3%) |
(11.0%) |
(12.1%) |
9.1% |
|
Box Office |
(13.1%) |
(15.3%) |
(13.6%) |
6.0% |
|
(13.1%) |
(15.3%) |
(14.6%) |
8.6% |
|
Retail |
(6.2%) |
(7.7%) |
(6.8%) |
7.5% |
|
(6.2%) |
(7.7%) |
(7.9%) |
10.2% |
|
Other Income |
4.9% |
6.0% |
(3.6%) |
7.4% |
|
4.9% |
6.0% |
(4.7%) |
9.1% |
(1) Pro-forma results reflect the Group and US performance had Regal been consolidated for the entirety of the period from 1 January 2018. For the purposes of percentage movements, the same comparative period has been applied.
(2) Constant currency movements have been calculated by applying the 2019 average exchange rates to the 2018 performance.
(3) ROW is defined as Rest of the World and includes Poland, Romania, Hungary, Czech Republic, Bulgaria, Slovakia and Israel.
As expected, the box office performance for the reported period was slower than the comparative period in 2018 reflecting the difference in the timing of major releases. The 2018 comparative period included “Black Panther” and “Avengers: Infinity War”, the top grossing films of the year, as well as the carryover of “Star Wars: The Last Jedi” and “Jumanji: Welcome to the Jungle” which were released in late 2017.
Over the past three weeks, all markets have seen a record performance driven by record-breaking “Avengers: Endgame” which has grossed over $2.5bn globally to date.
A strong line up of films is expected for the remainder of the first half, including “Pokémon Detective Pikachu”, “Aladdin”, “Godzilla: King of the Monsters”, “The Secret Life of Pets 2”, “X-Men: Dark Phoenix”, “Men In Black: International” and “Toy Story 4”.
During the period, as part of the Group’s proactive approach to estate management, four new sites (60 screens) were opened, one in Bulgaria and three in the US including Essex, our new 14-screen multiplex in the Lower East Side of Manhattan. Our selective site closure programme continued and we closed six of the Group’s sites during the period, all in the US. This brings the total number of sites in the Group as at 12 May 2019 to 788 with 9,503 screens.
The refurbishment and integration plans for Regal are progressing well and management is reviewing further opportunities. We have now signed over 30 agreements with landlords for several strategic sites to be refurbished in the US.
Investment in the latest technology continues to be a key pillar of the Group’s strategy. During the period, the Group opened 9 ScreenX and 10 4DX across the estate. We also recently opened the extension of our London cinema at The O2. It is now the largest cinema in London with 19 screens and 4,500 seats and offers ScreenX, 4DX, ViP and Superscreen formats making it one of the UK’s most technologically advanced cinemas.
The Group remains on track to deliver a full year performance in line with our expectations. There is a strong film slate for the second half of 2019 including “Spider-Man: Far From Home”, “The Lion King”, “Fast & Furious Presents: Hobbs & Shaw”, “It: Chapter Two”, “Joker”, “Maleficent: Mistress of Evil”, “Terminator: Dark Fate”, “Frozen 2”, “Jumanji 3” and “Star Wars: The Rise of Skywalker”.
The Company is also pleased to announce the signing and completion of a $286.3m sale and leaseback of 17 US cinemas. The details of this transaction are provided in a separate announcement released today.
Mooky Greidinger, Chief Executive Officer of Cineworld Group plc, commented:
“The relatively slow start to the year in the first four months has come as no surprise as the comparative period in 2018 was extremely strong; Avengers Endgame was always set to be the beginning of real strength in this year’s slate. The record breaking results of this latest Avengers movie prove the undisputed power of the theatrical business and its popularity around the globe.
Our strategy is unchanged and its implementation continues, with an exciting refurbishment programme, further installation of new technologies (an additional 40 4DX and 40 ScreenX auditoriums to be up and running by December), and our pioneering Unlimited scheme set to launch soon in the US.
We are confident that the strong film release line up in the balance of the year, which includes highly commercial titles, such as “Lion King”, “Frozen 2”, and the most anticipated movie of them all “Star Wars: The Rise of Skywalker” will enable us to achieve results which meet our expectations for the full year.”
The interim results for the six months to 30 June 2019 will be announced on Thursday 8 August 2019.
