Cineworld sales look sharp in 3D

By THIS IS MONEY
Updated:

 

Cineworld today said big draws such as Robert De Niro comedy Little Fockers and a remake of Gulliver's Travels saw admissions return to normal levels after a snow-hit December.

A scene from the 3D film, Avatar.

The company, which operates 801 screens in 78 sites, said the heavy snowfall and freezing temperatures last month had a negative impact on box office and retail revenues as travel to cinemas became difficult.

But Cineworld said as the bad weather eased, admission levels returned to normal, as movie-goers were drawn in by blockbusters such as the latest Harry Potter film. After a strong overall performance across the year, the company expects to meet profit expectations.

Cineworld reported a 4.2% increase in box office revenues in the 52 weeks to December 30, compared to 2.7% seen across the industry. But retail revenues, mostly from food and drink, were down 1.5% in the year.

The company enjoyed a boost to sales from 3D films in the year, including Avatar and Toy Story 3 - which became the highest and second highest grossing films respectively in the UK box office.

Cineworld is rolling out digital screens across its estate, with half the screens now using the technology. The company's box office share grew from 23.9% in 2009 to 24.6% in 2010.

The company's advertising division - Digital Cinema Media - had a strong year as well, boosting the company's 'other income' by 39.9%.

Looking ahead into 2011, the company said it was confident an 'attractive' release schedule - including the second instalment to the final Harry Potter film and Pirates of the Caribbean: On Stranger Tides - would maintain its performance.

James Cooke, an analyst at brokers Panmure Gordon, said profits before tax for the full year should be within £34.4m to £35.5m.

He said: 'Cineworld is a highly cash-generative business, consistently delivering substantial dividend payments to shareholders. We believe that investors should, if nothing else, consider this to be a reliable income stock.'

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