The deal completed last February and transformed Cineworld into the second-largest cinema chain in the world, with almost ten thousand screens throughout the US and Europe.
It was met with concern from some in the City though, given the heavily-discounted rights issue and billions of dollars of debt needed to fund the deal.
But the addition helped Cineworld to deliver pre-tax profits of US$349.0mln in 2018 – more than double the US$155.1mln it achieved the year before.
Revenue soared by 259% to US$4.12bn (2017: US$1.15bn) as the number of admissions swelled to 272.6mln (2017: 103.8mln).
Regal synergies upgraded
Chief executive Mooky Greidinger said the Regal acquisition had “exceeded [management’s] expectations”.
Cost savings was always one of the main reasons for pursuing such an expensive acquisition and Cineworld had expected to realise synergies of US$100mln this year. It said today that figure would be closer to US$150mln.
Even when the impact of Regal is stripped out, revenue climbed by 7.2% while underlying earnings (EBITDA) rose 9.4%.
Among the most popular films on both sides of the Atlantic were Avengers: Infinity War and Incredibles 2.
Current trading in-line
Net debt stood at US$3.73bn at the end of December, almost ten times what it was at the end of 2017 (US$375.8mln).
“We are pleased to announce strong full-year results following the successful acquisition of Regal,” said CEO Greidinger.
“We are well on our way to achieving the successful business integration following a strong performance and record box office results in the US.”
He added that trading for the current year is in line with forecasts.
‘The tricky bit in the middle’
“Every movie plot has a tricky bit in the middle so that everything can get sorted out in the end,” said Peel Hunt analysts in a note to clients.
“2019 is Cineworld’s tricky bit when it carries on with Regal refurbishment and, with a backend weighted release schedule, can’t decisively prove the payback on investment. Upgrading synergies is a hopeful sign.”
The City broker repeated its ‘add’ recommendation and 320p target price.
Shares rose 7% to 309.1p in on Thursday morning in London.
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