Interim Report 2014
Our vision To be the best way to see a movie Contents Highlights ............................................................................. 1 Chief Executive Officers’ Review ......................................... 2 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income ..................... 12 Condensed Consolidated Statement of Financial Position ............................................................... 13 Condensed Consolidated Interim Statement of Changes in Equity .............................................................. 14 Condensed Consolidated Statement of Cash Flows ...... 16 Notes to the Interim Condensed Consolidated Financial Statements ......................................................... 17 Independent Review Report to Cineworld Group plc ..... 26 Risks and Uncertainties .................................................... 27 Responsibility Statement of the Directors in Respect of the Interim Report .......................................... 30 Shareholder Information ................................................... 31
Cineworld Group plc Interim Report 2014 1 Highlights 2014 • Combination with Cinema City Holding B.V. (“Cinema City”) completed on 28 February 2014; • Group revenue growth of 33.2% on a statutory basis and 1.5% on a pro forma basis 1 ; • UK & Ireland revenue growth of 0.3%, with increased market share of 27.9% (2013: 27.7%) 2 ; • CEE 3 & Israel revenue growth of 4.0% on a pro forma basis; • EBITDA 4 growth of 43.4% on a statutory basis and 5.1% on a pro forma basis; • Profit before tax of £13.9m stated after non-recurring costs and amortisation of £11.4m resulting in adjusted profit before tax 5 of £25.3m, growth of 46.2%; • Interim dividend increased by 2.7% to 3.8p on a rights adjusted basis 6 ; • Adjusted diluted EPS 7 growth of 18.7%; • Strong cash generation of £13.7m enabling deleveraging post Cinema City combination; net debt of £286.1m; • Synergies from Cinema City combination now expected to be £5m; £2m target already achieved. 1 Pro forma results refer to the Group’s performance had Cinema City been consolidated for the entirety of the period under review. Where percentage movements are given, these refmect performance on a constant currency basis. 2 Source: Rentrak. 3 CEE is defjned as Central and Eastern Europe and includes Poland, Hungary, Romania, Czech Republic, Bulgaria and Slovakia. 4 EBITDA is defjned as operating profjt before depreciation and amortisation, impairment charges, onerous lease and other non-recurring charges, transaction and reorganisation costs and refjnancing costs. 5 Adjusted profjt before tax is calculated by adding back amortisation of intangible assets (with the exception of fjlm distribution rights) and other one-off income or expense totalling £11.4m (please refer to Note 5) to profjt before tax. 6 The 2013 interim dividend per share has been adjusted to take account of the rights issue of 8 for 25 on 14 February 2014. The interim dividend per share for 2013 as previously reported was 4.1p. 7 The interim 2014 adjusted diluted earnings per share have been adjusted for the fjrst 48 days of the period to take into account of the rights issue of 8 for 25 shares on 14 February 2014. The interim 2013 and annual 2013 adjusted diluted earnings per share have also been adjusted to take account of the rights issue in order to present a comparator. The interim adjusted diluted earnings per share for 2013 as previously reported was 9.0p.
2 Cineworld Group plc Interim Report 2014 Chief Executive Officer’s Review Cineworld Group plc interim results for the 26 Box Offjce week period ended 26 June 2014 refmect the Film performance for the fjrst half of the year trading performance and fjnancial position was underpinned by the success of “The of Cineworld Cinema and Picturehouse (“UK Lego Movie”, “X-Men: Days of Future Past” & Ireland”) and Cinema City (“CEE & Israel”) and “The Amazing Spiderman 2”, all of which which together are defjned as the “Group”. grossed over £24m in the UK and Ireland. They were supported by a number of other good UK & Ireland fjlm performances including “The Wolf of Wall Cineworld Cinemas and Picturehouse achieved Street” and “Twelve Years a Slave”, as well as a solid level of trading in the fjrst half of 2014 the play-through from 2013 releases: “Frozen” and we remained the largest operator in the and “The Hobbit: The Desolation of Smaug”. UK & Ireland with an increased market share Cineworld Cinemas remained the leading of 27.9% (2013: 27.7%) (Source: Rentrak). exhibitor of Bollywood fjlms with a box offjce Total revenues were up 0.3% on the prior market share in excess of 55% in the UK. year. Box offjce revenues declined by 0.5% compared with a UK & Ireland market decline Cineworld Cinema’s average ticket price of 5.7% (source: Rentrak) over the same grew by 2.6% to £5.53 (2013: £5.39). period. Admissions were lower by 3.4% The increase refmects infmationary price rises, compared with the equivalent period last year, partly offset by a reduction in 3D admissions predominantly due to the impact of the World during the period. 3D fjlms accounted for Cup in June 2014. 16.3% of admissions in the fjrst half of 2014 (2013: 18.7%). Retail Cineworld Cinema’s retail revenue was 0.7% higher than the previous year. Retail spend per person increased by 4.6% from £1.71 in the Moshe Greidinger previous year to £1.79 during the period. The Chief Executive Offjcer increase was partly attributable to fjlm mix, as well as the positive impact of strengthening and broadening Cineworld Cinemas’ retail offering which included the roll-out of Baskin Robbins concessions across the estate and the full impact of the additional nine Starbucks outlets opened in the second half of 2013. We also opened a Starbucks outlet in the new 11 screen Cineworld Cinema in Telford this month, with further outlets in the pipeline for the second half of 2014 and 2015. Other Income Other income includes all other revenue streams outside of box offjce and retail. The largest single element of other income is screen advertising. Trading at Digital Cinema Media (“DCM”), our joint venture screen advertising business, was better in the fjrst half of 2014 than the comparative period and resulted in a 6.6% increase in Cineworld Cinemas’ share of advertising revenues.
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