Blockbuster year for Odeon raises prospect of a £1bn sale
TERRA FIRMA has moved a step closer to a long-awaited sale of the Odeon & UCI cinema chain, after superheroes, fast cars and dinosaurs pushed the business back into profit.
Boosted by films including Avengers:
Age of Ultron, Fast & Furious 7, and Jurassic World, Odeon swung to a £14.5m pre-tax profit during the first six months of the year, reversing the £39.9m loss it suffered a year earlier. Revenues climbed to £348.7m from £317.1m, and paid attendance rose by 13.8pc, outstripping the 7.3pc increase in the wider market.
The chain, which operates 243 cinemas in the UK and Europe, is also forecasting a strong finish to the year, with the highly-anticipated latest instalments of the Star Wars, James Bond and Hunger Games franchises all due for release during the fourth quarter and expected to swell cinema attendances.
“It’ll be one of the biggest quarters ever in the UK market,” said Paul Donovan, who was appointed chief executive of Odeon last year to revive the company’s fortunes. Guy Hands, who owns Terra Firma, said in February that he would make another attempt to sell the business before the year’s end, a deal that could value the group at more than £1bn.
The financier put the business up for sale in 2013 but scrapped the disposal on the advice of bankers at JP Morgan and Goldman Sachs. An earlier attempt to offload the group in 2011 was also pulled.
Odeon and UCI were bought by Terra Firma eleven years ago for €650m (£474m at current exchange rates) and €350m respectively, and merged into one company.
Mr Donovan, who has scrapped online booking fees, refurbished cinemas and boosted staff training, would not be drawn on the private equity house’s current plans for the group.
“It’s completely up to Terra Firma when and how a sale of the business would be executed,” he said. “My job is to make sure that if that’s the case, there’s a business which is performing really well and delivering for customers and shareholders.”
He added: “I think we’re making good progress with our strategic changes. There’s a lot been done and a lot more to do.”