Box-office hits boost Cineplex stock
Big draws like ‘Lion King’ and ‘Spider-Man’ buoy results, push shares up about 5%
Cineplex Inc. shares rose about five per cent after the company reported record high revenue for its third quarter and outperformed analyst expectations, helped by a strong film slate including “The Lion King” and “Spider-Man: Far From Home.”
Shares in the movie theatre chain rose $1.14 or 4.94 per cent to $24.24 in early afternoon trading on the Toronto Stock Exchange. They reached a high of $24.99 earlier in the day.
The jump came as the company reported higher-than expected thirdquarter profit and revenue.
Cineplex reported Thursday that its third-quarter profit rose to $13.4 million or 21cents per share this year compared with $10.2 million or 16 cents per share in the same quarter last year.
Revenue totalled $418.4 million, up 8.3 per cent from $386.4 million, as theatre attendance increased1.8 per cent due to what Cineplex called a stronger film slate compared with last year.
CEO Jacob Ellis said on a conference call with analysts Thursday that the result marked a “record total revenue” for the company.
Analysts on average had expected Cineplex to report a profit of 14 cents per share and $418 million in revenue, according to financial markets data firm Refinitiv.
Box-office revenue grew to $177.9 million compared with $173.3 million a
year ago, which RBC Dominions Securities analyst Drew McReynolds wrote was “slightly lower than expected.”
In addition to “The Lion King” and “Spider-Man,” Cineplex attributed the strength to films such as “Fast & Furious Presents: Hobbs & Shaw,” “It Chapter Two” and “Once Upon a Time in Hollywood.”
In addition to the improvement at the box office, Cineplex said food services revenue totalled $125.6 million, up from $115.6 million. Media revenue rose to $43.4 million compared with $33.5 million a year ago, while amusement revenue increased to $58.1 million compared with $53.8 million. Other revenue, which includes the Cineplex Store, promotional activities, screenings, private parties, corporate events and other items, rose to $13.6 million compared with $10.6 million a year ago.
The results come as Cineplex faces growing competition from streaming services.
Earlier this week, The Walt
Disney Company launched its new subscription platform, Disney Plus. The Canadian offering spans nearly 500 films and 7,500 TV show episodes.
Disney Plus is the latest entrant to a packed streaming space. Its competitors in Canada include Netflix, Bell Media’s Crave service, Amazon’s Prime Video and Apple’s TV Plus.
Ellis said the industry has faced disruptions over the years including VHS, DVD, the internet and now streaming.
“But time and time again, over the past 30-plus years, moviegoing has long excelled amid changes in the industry,” he said, noting the company is still focused on experiences that can’t be replicated at home, he said, such as IMAX, 3D and other types of viewings.