Given the nationwide restrictions placed in 2020, the world’s second-largest cinema chain remained closed for the majority of the year, only re-opening for brief breaks in-between lockdowns. Annual revenues declined to $852.3m, compared with $4.37bn for the previous year. The company’s debt currently sits at approximately $8bn and expectations for 2021 revenues are in the region of $2.5bn, with hopes that there will be no further pandemic induced setbacks.
As a result, Cineworld slashed its annual dividend in order to improve its cash flow and hasn’t yet announced a date for when it will start re-offering quarterly payouts to shareholders. Given this slumping performance, Cineworld stock has seen an increase in short sellers over the past year, although there is still hope that the re-opening of the world’s entertainment centres may have a positive effect on Cineworld’s share price, as lockdowns start to ease across the UK.
Mid-2020, the company also pulled out of its $2.3bn proposed Cineplex acquisition and in 2021, it has been the subject of takeover speculation, further adding to the company’s volatile price action. Therefore, it’s worth keeping an eye on company news when trading Cineworld shares.