3-D releases keep Cineworld profits as pretty as a picture

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AUTUMN releases of three– dimensional films – including James Cameron's eagerly-awaited Avatar, which is being previewed in Aberdeen today – will keep Cineworld on track to meet market expectations this year, the UK's second largest cinema chain said yesterday.

Cameron's science fiction film, the trailer for which was released online yesterday and is due to hit cinemas on 18 December, is his first major work since 2003's Terminator 3 and is set to be a big draw for audiences.

The teaser trailer is being shown in six cinemas today, including Cineworld's complex in the Granite City, in special 15-minute showings.

Other 3-D titles, including children's hits Bolt and Monsters Vs Aliens, have already proved popular, and Cineworld looks set to capitalise on its market-leading position in 3-D.

The London-listed chain yesterday raised the curtain on a 13.8 per cent rise in revenue to 161.9 million, with box office receipts up 19.8 per cent at 111.4m, aided by 28m of 3-D ticket sales.

Blockbuster releases – including Star Trek, Angels and Demons and Slumdog Millionaire – helped the group to increase operating profit by 12.8 per cent to 15.9m, with the average ticket price rising by nearly 6 per cent to 4.59, reflecting the higher ticket cost for 3-D shows.

Admissions increased by 18 per cent to 24.3m, with Cineworld retaining its 23.6 per cent market share and number two ranking behind Odeon, which is owned by private equity group Terra Firma.

The number of customers signed up for the company's "Unlimited" card – for which visitors pay a monthly fee in return for unlimited cinema access – rose by 18 per cent to 225,000.

Subscriber numbers were boosted by a tie-up with the Prudential, under which the Unlimited card is promoted to the Pru's customers, while a separate promotion also involved cinema tickets being offered in exchange for vouchers from Tesco's Clubcard loyalty scheme.

Tony Meehan, chairman of cinema consultancy RAAM Management, said that Cineworld had done well to keep the average retail spend – a measure of how much cinema-goers fork out for popcorn, pick-and-mix and soft drinks – at 1.71 during the recession.

He added: "A drop in average retail spend of only 2p is a very, very good result. The whole industry has had a very good year so I'm not surprised Cineworld's figures are as good as they are."

The cinema industry, as a whole, has seen attendance at its highest level for seven years, with ticket sales up 14.5 per cent according to the Cinema Advertising Association.

Meehan said: "Under chief executive Steve Wiener, Cineworld has been innovative. The fact they've locked in with the Pru and with Tesco shows how dynamic they are.

"They've had the top two cinemas in the UK and Ireland – on Glasgow's Renfrew Street and in Dublin – for the past five years and were the first off the mark with digital projectors and now 3-D projectors."

Meehan added: "3-D is the way ahead, with Paramount recently announcing all its films by 2010-11 will be in 3-D."

Cineworld – which has six cinemas in Scotland and is opening a second in Aberdeen in late October – yesterday said the recession had resulted in a shift of customers from weekends to midweek screenings, with cheaper tickets on offer as part of its "Bargain Tuesday" scheme.

The difficult economic conditions also meant revenues from advertising, screen hire, sponsorships and games machines dropped 23.7 per cent to 9m.

Last year, Cineworld made a pre-tax profit of 28.4m on turnover of 298.9m. James Wheatcroft, an analyst at Evolution Securities, has predicted Cineworld will return a profit of 31.4m this year, on the back of 329.4m in revenue.

He added: "The 3-D roll-out is gathering momentum, with more and higher profile content due in the second half. We argue that 3-D will attract more customers at a higher ticket price. Cineworld is the number-one UK owner of digital projectors."

Shares in Cineworld closed down 5.25p at 156.5p.