Amusement, Rec Room businesses boost profits at Cineplex

TORONTO — The owner of Canada’s largest chain of movie theatres says its strategic diversification into multiple forms of entertainment helped drive the company’s second-quarter revenue to a record high $439.2 million.

In the main theatre business, Cineplex Inc. said a 1.7 per cent decline in attendance from last year was offset by higher box office revenue per patron and higher concession revenue per patron. Secondary businesses — including advertising sales and alternative forms of entertainment — helped push up total revenue by $30 million or 7.3 per cent from $409.1 million in last year’s second quarter.

Cineplex says its media increased 21.5 per cent or $8.8 million to a second quarter record of $49.6 million due to the growth in both in-theatre advertising and out-of-theatre digital signage.

Revenue from its amusement solutions business, which supplies equipment to third party arcades, bowling alleys and amusement parks, was up 16.8 per cent or $7 million to $48.4 million.

The Rec Room group of leisure locations grew revenue by 33.4 per cent or $5.2 million to $20.9 million.

However, net income was down compared with last year, a decline that Cineplex chief executive Ellis Jacob attributed largely to a couple of unusual circumstances. “Avengers: Endgame” — one of the biggest box office draws in history — added to expenses at its theatre business because it was three hours long.

“So to make up the revenue, you had to extend the hours ... and you end up with higher labour costs,” Jacob said.