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Saturday 20 July 2019

Cineworld posts mixed set of results following US deal

In the UK, sales were down 0.6% on a constant currency basis.

The cast and crew of Black Panther (PA)
The cast and crew of Black Panther (PA)

By Ravender Sembhy, Press Association City Editor

Cineworld welcomed a record number of film goers last year, even as the blazing hot summer and the World Cup hit sales in the UK.

The cinema chain said on Wednesday that 308 million people visited its outlets in 2018, a 2.6% increase and a record number.

But this was mainly driven by the US, where sales jumped 8.6% following its takeover of Regal Entertainment for £2.7 billion.

In the UK, total sales were down 0.6% on a constant currency basis, with box office revenue falling 1.5%.

Ed Monk, associate director at Fidelity Personal Investing, said: “It’s been a transformative year for Cineworld following the purchase of the much larger US chain Regal. Today’s trading update shows the importance of that deal.

“In the UK, 2018 was disrupted by a long, hot summer and an attention-stealing World Cup run for England.”

Shares were down over 4% at 264.8p in midday trade.

Nevertheless, Cineworld is on track to meet its full-year expectations.

The strength of the US market, which now accounts for 70% of Cineworld’s income, was driven by the success of films such as Black Panther, Avengers: Infinity War and Incredibles 2, Cineworld explained.

By division, the firm’s Box Office revenue was up 4.8% overall, while retail increased 6.9%.

During 2018, Cineworld opened 13 new sites, with six each in the UK and US and one in Romania. It now operates across 790 locations with 9,518 screens.

Looking at 2019, Cineworld said it is well positioned with a strong film slate for the year including Avengers: Endgame, Toy Story 4, Spider-Man: Far from Home and the latest Star Wars.

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