The announcement today includes the numbers from Regal Entertainment – which Cineworld acquired earlier this year. Revenue and adjusted earnings jumped by 252.4% and 284.7% respectively, and on a pro-forma basis revenue jumped by 10.8%, while earnings rose by 14.1%. The US division was the standout performer as revenue increased by 14.3% on a pro-forma basis. The UK & Ireland division saw revenue rise by 2.5% on a constant currency basis – which is respectable given England’s strong performance in the World Cup and the recent heatwave.
The company’s expansion continues as it added 6 new sites and 56 new screens in the past six months, and an additional 12 sites and 111 screens are planned for the second-half of the year. Cineworld also have a refurbishment programme in place, and the aim is to create high quality cinemas with the latest audio and visual technology. The firm confirmed the integration of Regal is going well. The company has managed to renegotiate a more advantageous debt facility, and this is useful as net debt now stands at $3.8 billion.
The company had a respectable 2017 as revenue and pre-tax profit jumped by 8% and 22% respectively. The first-quarter of this year was subdued as revenue from the UK and Ireland division dipped by 2.1%. Cineworld has theatres in Eastern Europe and Israel, and this should help with revenue diversification. The group confirmed it changed its presentational currency to US dollars in order to give a ‘meaningful’ reflection of the company’s accounts. The British company switched to US dollars as its denominated currency as it now earns the bulk of its revenue in the US, thanks to the acquisition of Regal Entertainment.
The buyout was completed earlier this year, and Cineworld carried out a fully subscribed rights issue to fund the takeover. Cineworld shareholders were clearly confident in the transaction, and they will want to see a return on their investment. The company is now the second-largest since cinema group in the world, and the management are likely to use economies of scale and to boost the bottom line.
Today’s figures include the numbers from Regal, but is worth noting the Cinewolrd saw a steady rise in revenue, pre-tax profit and dividends between 2015 and 2017, so the company was clearly going from strength to strength in advance of the takeover.
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