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Fewer people went to the movies in Canada last year, but revenue has
continued to rise for Cineplex Inc. as it charges higher prices for
premium movie tickets, and makes more money at the concession stand.
For the fourth year in a row, attendance declined at Cineplex in 2019. The
country’s largest movie theatre chain reported on Wednesday that it saw
66.4-million visitors last year, down from 69.3-million in 2018.
But revenues for Toronto-based Cineplex grew to $1.67-billion in 2019, up
from $1.61-billion the year before. While box office revenues declined 2.6
per cent to $705.5-million, Cineplex made more money per visitor on
tickets and saw foodservice revenue at its theatres grow by 1.3 per cent
to $446.6-million, a record for the company. Cineplex has been expanding
alcohol sales, and now serves alcoholic beverages at more than half of its
theatres, boosting concession spending further. It has also launched food
delivery partnerships with Uber Eats and Skip the Dishes covering more
than 100 theatres across the country.
The company reported its earnings the day after investors overwhelmingly
approved a sale of the company to Britain-based cinema conglomerate
Cineworld Group PLC. At a meeting on Tuesday, 99.92 per cent of Cineplex
shares that were represented voted in favour of the $2.2-billion deal,
which was first announced in December. Cineworld also held a vote on
Tuesday and received 99.95-per-cent support for the acquisition. Cineplex
expects the deal to close sometime between March 23 and June 30.
Acquisition costs pushed down Cineplex’s net income, which fell to
$3.5-million, or 6 cents per share in the three months ended Dec. 31,
2019, down from $29.3-million or 43 cents per share in the same period the
year before. For the full year, net income was $28.9-million, down from
$77-million in 2018. The declines were partly due to $11.7-million in
costs, including professional fees and some stock-based compensation that
was accelerated; as well as $12.1-million in non-cash interest related to
hedge accounting changes related to the proposed deal with Cineworld and a
debt repayment that is expected when the deal closes. Net income was also
impacted by an accounting change to transition to IFRS 16 reporting
standards.
“As the entertainment industry continues to transform, the pending
transaction ensures that Cineplex is part of the next era of global
entertainment. It means that our business, particularly our network of 165
movie theaters across Canada, has access to global opportunities in an
evolving entertainment landscape,” chief executive officer Ellis Jacob
said on a conference call on Wednesday, during which he thanked
shareholders for their support, and Cineplex’s 13,000 employees for their
work.
The 2019 results were aided by 20.8-per-cent growth in media revenues in
2019, to $196.8-million, due to higher advertising revenue in theatres as
well as a major increase in installations of digital boards -- including
menu boards, advertising and other signage -- at other businesses, such as
at roughly 630 AMC theatres in the U.S. and MEC stores in Canada.
Cineplex’s amusement business, which installs games in both its own venues
and other businesses, grew as well and Cineplex opened more entertainment
venues such as Rec Room and Playdium. Together, those amusement revenues
grew 10.9 per cent in 2019 to $228-million.
In the fourth quarter, the top-grossing movies for Cineplex were Joker,
Frozen II, Star Wars: The Rise of Skywalker, Jumanji: The Next Level, and
Maleficent: Mistress of Evil.
Cineplex’s revenue in the three months ended Dec. 31 was $443.2-million,
up from $427.8-million in the same period the year before.
continued to rise for Cineplex Inc. as it charges higher prices for
premium movie tickets, and makes more money at the concession stand.
For the fourth year in a row, attendance declined at Cineplex in 2019. The
country’s largest movie theatre chain reported on Wednesday that it saw
66.4-million visitors last year, down from 69.3-million in 2018.
But revenues for Toronto-based Cineplex grew to $1.67-billion in 2019, up
from $1.61-billion the year before. While box office revenues declined 2.6
per cent to $705.5-million, Cineplex made more money per visitor on
tickets and saw foodservice revenue at its theatres grow by 1.3 per cent
to $446.6-million, a record for the company. Cineplex has been expanding
alcohol sales, and now serves alcoholic beverages at more than half of its
theatres, boosting concession spending further. It has also launched food
delivery partnerships with Uber Eats and Skip the Dishes covering more
than 100 theatres across the country.
The company reported its earnings the day after investors overwhelmingly
approved a sale of the company to Britain-based cinema conglomerate
Cineworld Group PLC. At a meeting on Tuesday, 99.92 per cent of Cineplex
shares that were represented voted in favour of the $2.2-billion deal,
which was first announced in December. Cineworld also held a vote on
Tuesday and received 99.95-per-cent support for the acquisition. Cineplex
expects the deal to close sometime between March 23 and June 30.
Acquisition costs pushed down Cineplex’s net income, which fell to
$3.5-million, or 6 cents per share in the three months ended Dec. 31,
2019, down from $29.3-million or 43 cents per share in the same period the
year before. For the full year, net income was $28.9-million, down from
$77-million in 2018. The declines were partly due to $11.7-million in
costs, including professional fees and some stock-based compensation that
was accelerated; as well as $12.1-million in non-cash interest related to
hedge accounting changes related to the proposed deal with Cineworld and a
debt repayment that is expected when the deal closes. Net income was also
impacted by an accounting change to transition to IFRS 16 reporting
standards.
“As the entertainment industry continues to transform, the pending
transaction ensures that Cineplex is part of the next era of global
entertainment. It means that our business, particularly our network of 165
movie theaters across Canada, has access to global opportunities in an
evolving entertainment landscape,” chief executive officer Ellis Jacob
said on a conference call on Wednesday, during which he thanked
shareholders for their support, and Cineplex’s 13,000 employees for their
work.
The 2019 results were aided by 20.8-per-cent growth in media revenues in
2019, to $196.8-million, due to higher advertising revenue in theatres as
well as a major increase in installations of digital boards -- including
menu boards, advertising and other signage -- at other businesses, such as
at roughly 630 AMC theatres in the U.S. and MEC stores in Canada.
Cineplex’s amusement business, which installs games in both its own venues
and other businesses, grew as well and Cineplex opened more entertainment
venues such as Rec Room and Playdium. Together, those amusement revenues
grew 10.9 per cent in 2019 to $228-million.
In the fourth quarter, the top-grossing movies for Cineplex were Joker,
Frozen II, Star Wars: The Rise of Skywalker, Jumanji: The Next Level, and
Maleficent: Mistress of Evil.
Cineplex’s revenue in the three months ended Dec. 31 was $443.2-million,
up from $427.8-million in the same period the year before.