Blockbuster price sours cinema trip
EXHAUSTED parents battl i ng t hei r way through the endurance test of the school summer holidays are a familiar sight at airports and tourist attractions.
Many could be forgiven for thinking that a trip with their offspring to the local multiplex might provide a couple of hours of cheap entertainment and a chance to relax.
after all, it’s possible to book tickets online and save money with the likes of london-listed Cineworld – worth an impressive £ 870m, based on yesterday’s share price of 330.8p. For an adult and two children visiting one of its cinemas in south east england, you can expect to pay about £20 for an afternoon screening, which is reasonable value.
In the first half of this year some 25million people passed through Cineworld’s doors in the Uk and Ireland alone. Once its operations in Israel and Central and eastern europe were included, admissions topped 35.8million.
yet one need not delve deep into the interim results to discover precisely how much revenue comes from ancillary charges – walk into any Cineworld foyer and it’s immediately obvious how important refreshment kiosks are to the bottom line.
During the first half a staggering £47m of sales came from the retail operation. In other words the nachos, popcorn and buckets of fizzy drinks on sale inside.
Cineworld jealously protects this revenue. Try to overtly take snacks or drinks into one of its venues and you’re likely to have them confiscated or entry refused.
But whether it’s the packet of sweets selling for around three times the price of a supermarket or the giant containers of popcorn at hugely inflated prices, you can see why, in cost- conscious times, some might be tempted to run the gauntlet and sneak in their own refreshments.
Surprisingly, retail spend per person during the 26 weeks to June 26 was £1.79, up from the £1.71 the previous year.
This figure is likely to rise with the continued roll-out of Baskin Robbins ice cream concessions across the Cineworld estate. The company has just opened a Starbucks branch in its Telford cinema with more in the pipeline.
The assault from high- calorie snacks doesn’t end once you sit down, however. On a recent visit I counted almost 40 minutes of adverts targeting minors, featuri ng j unk f ood, sugar- packed drinks and other ‘treats’ most responsible parents would baulk at their children consuming.
While the only alternative is to rent a DVD or online movie and control what your children are exposed to, a visit to the cinema remains a pleasant outing. It’s just a shame that the big chains are so desperate to suck every last penny from our pockets.
Placebo effect
DEFINED as a simulated or otherwise medically ineffectual treatment for a disease or other medical condition, the placebo effect is widely acknowledged.
yet for Glaxo Smithkline boss Sir andrew Witty, the placebo being employed by the embattled FTSe100 drug-maker appears to be having little effect on investors.
The group’s stock response has been wheeled out every time new bribery allegations have emerged but little seems to be happening to quell investor nerves.
To recap, GSK is facing bribery and corruption allegations in countries as diverse as China and Poland, Jordan and the Uk. The latest to emerge this week was in Syria, which accounted for just £6m of sales last year.
Once again GSK insisted that it has ‘zero tolerance for any kind of unethical behaviour’, and that all claims would be ‘ thoroughly investigated’ by the company.
There’s no doubting Witty is now under close scrutiny. The bribery allegations come on top of weak sales and a profit warning, while investors are waiting for promised new drug launches to start boosting revenues to replace big-sellers on the wane or falling out of patent protection.
Feted fund manager Neil Woodford, formerly of Invesco and now running his own Woodford investment management firm, has publicly backed GSK and Witty’s strategy. But more frequent rumblings among other investors and analysts suggest the pressure on Witty is increasing.
While trying to steer GSK’s dayto-day operations he also has to handle a potentially global criminal investigation.
In Britain alone the recent Bribery act can impose prison sentences or unlimited fines on bosses who failed to prevent corruption by even the lowliest employees, no matter where in the organisation they worked.
The shares have lost around 300p in the past 12 months, closing up 5p at 1394p last night. Witty will be keeping his fingers crossed that this time the drugs do work.