CINEWORLD GROUP plc interim results for 26 week period ended 30 June 2011

A strong finish to the first half with growth in revenues, EBITDA and market share

Cineworld Group plc (“Cineworld” or “the Group”) is pleased to announce its interim results for the 26 week period ended 30 June 2011. 

Financial

• Group revenue of £163.6m, up 1.0%  (2010: £162.0m);
• EBITDA1  £25.6m up 4.9% (2010: £24.4m);
• Operating profit at £13.0m after the impact of £3.2m of non-recurring and non-trade related costs (2010 operating profit: £14.8m);
• Reported EPS: 6.6p on a  proforma adjusted basis (2010: 6.8p)  and 3.6p on basic earnings (2010: 5.6p);
• Interim dividend of 3.6p per share up 5.9% (2010: 3.4p per share);
• Net debt reduced to £100.7m (June 2010: £115.5m);
• Successful refinancing of bank facility in March 2011 with a £170m facility over a 5 year term.

Operational

• Largest operator in the UK with a box office market share² of 26.4% (2010: 26.3%);
• UK/Ireland market share² increased during the period to 24.9% (2010: 24.2%);
• Box office receipts up 2.0% at £113.9m (2010: £111.7m);
• Admissions at 23.2m, up 2.2% (2010: 22.7m);
• Average ticket price at £4.91 per ticket (2010: £4.93);
• Average retail spend per person lower at £1.67 (2010: £1.71);

• Strong start to the second half of 2011, led by the success of Harry Potter: The Deathly Hallows Part 2.

Commenting on these results, Stephen Wiener, Chief Executive Officer of Cineworld Group plc, said:

“We are pleased to announce solid first half results where we achieved growth in both revenue and EBITDA despite a lower number of blockbuster and 3D film releases during the period. The resilient trading performance, together with a reduction in net debt, has resulted in the Group being in a sound financial position. Against this backdrop, we have again increased the interim dividend to our shareholders. 

The second half of the financial year has started strongly for the Group, with an excellent range of blockbusters and 3D films. The fourth quarter brings an exciting line up of releases with titles such as “Twilight Saga: Breaking Dawn Part 1”, “Mission Impossible: Ghost Protocol” and “Sherlock Holmes 2”, as well as a promising 3D film slate including “The Adventures of Tin Tin: Secret of the Unicorn” and “Puss in Boots”.  

The strength of the film line up in the second half, coupled with our solid first half performance, underpins our confidence in performing in line with market expectations for the year and delivering further value to shareholders.“

Digital Radio Struggling as Digital TV Universally Adopted...

The percentage of people that own a digital television has risen dramatically from 65.7% in 2009 to 72.2% in 2011 according to Digital Broadcasting, a Key Note Market Report. On top of this, subscriptions to paid-for digital television services such as Sky and Virgin Media have also increased as people move away from the digital set-top box used to receive Freeview. However, when compared to the digital television market, digital radio has seen only modest increases in consumer penetration. In 2011, only a slightly higher proportion of respondents said that they owned a digital audio broadcasting (DAB) radio when compared to figures in 2009 (48% compared with 45.2%). The digital radio industry’s problems are only increased by the fact that the Government’s pledge to switch over to digital radio by 2015 has been abandoned.

 

The reluctance by consumers to switch to DAB radios is somewhat of a mystery for the industry. For a small fee consumers can access hundreds more radio stations with no subscription, yet only there has only be a 2.8 percentage-point rise in the proportion of people who have invested in a DAB radio in 2 years. Clearly money is needed for a big awareness campaign to follow in the footsteps of the highly successful digital switchover campaign, which is coming to an end in 2012.

Key Note’s 2011 Market Report, Digital Broadcasting, considers the UK digital broadcasting market, focusing on the switch from analogue to digital television and radio, but also touching on other issues surrounding the digital broadcasting market.

In June 2011, Key Note commissioned NEMS Market Research to conduct an exclusive survey to understand the key issues associated with digital media and to assess its uptake in the home, questioning 1,000 adults aged 16 and over. Similar research can be found in previous Key Note reports.

Key Note Ltd has been providing commercially relevant market information to libraries, academia and businesses for almost 30 years. With over 1,000 titles available across 29 market sectors, and new or updated titles published every month, Key Note is one of the UK’s most prolific and respected business information providers. Within the range, some reports are written in response to particular market conditions, whereas other reports will be produced regularly year on year.

The Market Report 2011, Digital Broadcasting, is available to purchase from Key Note on 0845-504 0452, by e-mail at sales@keynote.co.uk or at , priced £460.