Cineplex profit jumps on higher Q2 attendance, more spending per person
A helping hand from the Avengers, Incredibles and Deadpool resulted in record revenue for Cineplex Inc. in the second quarter.
The Toronto-based entertainment giant said sequels to the superhero hits delivered increasing audience numbers and money spent at concession stands, bringing the company’s revenues to an all-time high of $409.1 million for the quarter ended June 30, up about 12 per cent from the year before when it made $364.1 million.
The company’s net income also jumped significantly, increasing 1,670 per cent to $24.4 million, or 38 cents a share this quarter from $1.4 million or 2 cents last year. Analysts had estimated $414 million of revenue and 24 cents per share of net income, according to Thomson Reuters Eikon.
Ellis Jacob, the president and chief executive officer of Cineplex, said there wasn’t a single factor that prompted the strong performance.
“We had a lot of stars aligning,” he said. “The box office did well (and) the food side of the business did extremely well with a significant increase in our concession revenues per patron.”
Cineplex shares added more than two per cent in morning Toronto trading before sliding back. They ended the day at $29.10, down 3.96 per cent.
The only “blemish,” he said, was that the company’s revenues were slightly lower than it expected for its Rec Room gaming restaurants, which brought in $15.7 million in revenue in the quarter.
His comments came as Cineplex has been focused on minimizing the unpredictability of the box office and competing with the popularity of on-demand streaming services by putting attention on its signage business and expanding gaming and restaurant brands it operates, including the Rec Room, Playdium and forthcoming virtual sports complexes Topgolf.
There will be nine Rec Rooms and two Playdiums open by the end of 2019 and that an announcement around Topgolf ’s first site is coming soon, he said.
Cineplex is also looking at food as a way to nab more customers.