Cineworld considers US listing as Covid losses persist
Cineworld has revealed it is considering listing part of its business in the US, as the world’s second largest cinema operator reported a $576m (£416m) loss in the first half of the year.
Shares in the London-listed chain climbed as much as 7% in early trading as investors reacted to the prospect of a listing of Cineworld, or its North American subsidiary Regal, in the US.
“US equity capital markets are the largest and most liquid in the world and include a large number of publicly listed cinema companies including peer group companies,” said Mooky Greidinger, the chief executive of Cineworld.
“The board is therefore considering options to maximise shareholder value now and into the future by accessing this liquidity through a listing of Cineworld or partial listing of Regal in the US.”
The chain’s US-listed rival AMC, the world’s largest cinema operator and owner of the Odeon chain in the UK, has seen its share price rise dramatically after it became a popular socalled “meme stock” among investors.
Cineworld, which operates 789 sites in the US and North America, said the majority of its revenues and profits come from Regal, which it acquired for $3.6bn in 2018.
The company’s first-half results highlight the extent of the financial impact the pandemic has had on the sector with cinemas shut for months.
It reported a pre-tax loss of $576m in the first six months, an improvement on the $1.bn loss in the same period last year, as admissions slumped 70% year on year to 14.1 million.
Cineworld’s revenues fell 59% from $712m to $293m in the first half, and the chain again warned of a “material uncertainty” over its ability to continue to trade if there are further lockdowns.
“There can be no certainty around the recovery from Covid-19 in the short term, however we are encouraged by our return to trading,” Greidinger said. “Trading since our cinemas reopened has been encouraging and increasingly improving.”
The company said cinemagoers were starting to return in growing numbers, and admissions in July were at 57% of pre-Covid levels. It pointed to a strong slate of upcoming films including James Bond: No Time to Die, Matrix, Dune and Top Gun: Maverick, which are expected to drive business in the coming months.