Cineworld Group PLC (LSE:CINE), the heavily indebted cinema chains operator, anticipates strong trading in March after a slow start to the year.
The group said in its results statement for 2021 it has seen a gradual recovery of admissions and demand since re-opening, but takings in January and February were affected by COVID-19 and the lack of major movie film releases.
Admissions in 2021 rose 75.2% to 95.3mln from 54.4mln in 2020; both years included long periods when cinemas were closed because of lockdown restrictions.
Revenue rose 112% to US$1.8bn in 2021 from US$852.3mln the year before leading to a return to profitability, with adjusted underlying earnings (EBITDA) positive at US$454.9mln compared to a loss of US$115.1mln the year before. Factoring in the payment of lease liabilities reduces the adjusted EBITDA to US$54.5mln (2020: US$313.7mln), while straightforward profit before tax was actually a loss of US$708.3mln, versus a loss in 2020 of US$3bn.
The group, which is appealing against the decision by the Ontario Superior Court to require it to pay C$1.23bn in damages to Cineplex (TSX:CGX) for pulling out of an agreement to acquire the Canadian company, said it does not expect damages to be payable while any appeal is ongoing. No liability has been recognised in respect of the judgement, Cineworld said.
Net debt (excluding lease liabilities) increased by US$492.7mln in 2021 to US$4.8bn. Cash and restricted cash stood at US$354.3mln at December 2021 (2020: US$336.7mln).
"Whilst our 2021 results still reflect the impacts of COVID-19, particularly at the start of the financial year, we are encouraged by the recent strong trading performance throughout the final quarter,” said Mooky Greidinger, the chief executive officer of Cineworld.
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“It is clear that our customers remain loyal and have missed the big screen experience as well as the sociability of watching a movie with others. Our strong final quarter performance reflects the pent-up demand for affordable out-of-home entertainment and the record-breaking film slate, including ‘Spider-Man: No Way Home’, which showcased the importance of cinematic releases,” Greidinger claimed.
“The business is well-positioned to execute its strategy and capitalise on the highly anticipated movie schedule, which includes ‘Avatar’, ‘Top Gun Maverick’, ‘Jurassic World: Dominion’, ‘Minions: The Rise of Gru’, ‘Doctor Strange in the Multiverse of Madness’, ‘Thor: Love and Thunder’, ‘Black Panther: Wakanda Forever’, ‘Bullet Train’, ‘Spider-Man: Across the Spider-Verse’, Pixar's ‘Lightyear’, ‘Fantastic Beasts’, ‘Elvis’ and many more,” Greidinger said.