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Cineworld fails to provide surprise twist at the end

Bulls hoping for an earnings upgrade on the back of the Star Wars blockbuster were disappointed
Cineworld fails to provide surprise twist at the end
Cineworld cited strong performances from three blockbusters in the fourth quarter: “Spectre”; “Hunger Games: Mockingjay Part 2”; and “Star Wars: The Force Awakens”.

The force was with cinemas operator Cineworld (LON:CINE) in 2015, though perhaps not as much as the market hoped.

Total revenues for 2015 were up 12.3% year-on-year on a pro forma basis (adjusting for the February 2014 acquisition of Cinema City).

Box office takings were up 11.6%, while cinema goers gobbled up the jumbo-sized popcorn, overpriced candy-covered sweets and fizzy drinks and pushed retail sales 13.7% higher than the year before.

The group had previously indicated that in the first 46 weeks of 2015 Total revenues were 11.9% higher year-on-year.

The group said it expects profitability for the year just ended will be in line with market expectations when the numbers are finally totted up.

“While low end consensus could increase and we have already upgraded +8% in 2015, this may disappoint the bulls,” suggested broker Investec, and it seems to have called that right, as the shares were off 3.7% at 517.5p in mid-morning trade.

Cineworld cited strong performances from three blockbusters in the fourth quarter: “Spectre”; “Hunger Games: Mockingjay Part 2”; and “Star Wars: The Force Awakens”.

Investec said the numbers suggested the Star Wars performed well in the period.

For 2016, the group reckons "Fantastic Beasts And Where To Find Them", "The BFG", "Star Wars: Rogue One", "Finding Dory" and "Captain America: Civil War" will be the big money-spinners.

The company said it is continuing with its strategic expansion and renovation plans during 2016 when there are 13 new sites scheduled to open, which was one less than Investec had been expecting.

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