Regal Owner Cineworld Posts Higher First-Half Results

Cineworld cinema - H 2013

The U.K. company highlights the success of 'Black Panther' and the latest 'Avengers' film and discusses the impact of the World Cup in the U.K.

Movie theater giant Cineworld Group, which earlier this year completed its acquisition of Regal Entertainment Group, on Thursday reported improved financials for the first half of the year.

The largest cinema operator in the U.K. posted first-half revenue growth of 252 percent, or 10.8 percent on a pro forma basis adjusting for the Regal deal, to $2.46 billion. Adjusted earnings before interest, taxes, depreciation and amortization, a key profit metric, jumped 285 percent, or 14.1 percent on a pro forma basis, to $553.8 million. 

The financials include the results of Regal following the completion of the acquisition on Feb. 28. Pro-forma figures reflect the performance had Regal been consolidated for the entirety of the periods covered.

"The results for the first six months of the year, along with the completion of the Regal acquisition demonstrate continued delivery of our strategy to create value for our shareholders," said Cineworld CEO Moshe "Mooky" Greidinger. "Although the group has expanded significantly, our strategy and vision remains the same, to be 'the best place to watch a movie' by continually focusing on providing the best customer experience, maintaining technological leadership, expanding and upgrading the estate and training and retaining highly motivated, experienced and loyal staff."

He added: "Following the completion of the transaction, I have spent a lot a time in the United States getting to know our U.S. business and implementing our strategy. I am very pleased with the Regal acquisition. We have already identified a significant number of opportunities. We are focused on delivering on the full potential of the combination through the strengths of our brands, focus on customer experience and investment in technology."

The second half of 2018 has "started well" with the release of Mission Impossible: Fallout, Mamma Mia! Here We Go Again and Equalizer 2, he said. "Based on the film slate in the second half and our first-half results, we remain confident of delivering a performance for the year as a whole in line with management's expectations."

Added Greidinger: "The film slate in the U.S. performed particularly well in the [six-month] period, largely driven by the success of Black Panther and Avengers: Infinity War. The latter exceeded the previous opening weekend box-office record in the U.S. Our European markets had a very strong comparative film slate in first six months of 2017, which included Beauty and the Beast and The Fate of the Furious, and as expected this presented a challenging comparable admissions basis."

Cineworld's box-office admissions and revenue increased by 9.2 percent and 14.3 percent, respectively, on a pro forma basis. "These results reflect the strength of the U.S. cinema market in 2018 compared with 2017," the company said.

U.K. box-office admissions for the company decreased by 2.7 percent during the six-month period ending June 30, but box-office revenue increased 1.3 percent on a constant-currency basis. "In the context of challenging weather conditions in the period and the popularity of the World Cup, this reflects a steady performance for the six-month period, compared with a very strong comparative period in 2017," the company said.