Cineworld PLC (LON:CINE) played down the impact on its business of coronavirus and says admission levels are still good.
Shares in the cinema group plummeted when the release of the new James Bond movie ‘No Time to Die’ was postponed to November due to the impact of the virus on venues in Asia.
Broker Peel Hunt predicted that the postponement would be the first of many, but Cineworld today said there was no evidence of that so far.
“The studios have advised us that in the countries in which we operate, they currently remain committed to their release schedule for the coming months and remainder of the year,” Cineworld said in a statement.
Numbers of people going to the cinema have also not been materially affected.
“Following an increase in admissions in the first two months of the year against the same period in the previous year, we continue to see good levels of admissions in all our territories, despite the reported spread of COVID-19.“
However, the group said it was monitoring the situation
Cineworld generates 75% of its revenues in the US with the UK accounting for most of the rest.
No Time to Die was expected to be one of the highlights in this year’s release schedule alongside West Side Story and Maverick.
The top-ten films account for around 40% of box office revenue in a typical year.
Shares fell 5% to 115p or almost two-thirds lower than their 2019 high.
Peel Hunt suggests it is now “unlikely” that Cineworld can “re-equitise” in the current year to pay down debt, adding that a 20% decline in revenues could cut profits in half.
Cineworld might also not be able to delay its £1.6bn (US$2.1bn) acquisition of Cineplex of Canada as the purchase contract contained a material adverse change clause that “specifically excludes outbreaks of disease and other factors which impact the industry generally”.