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Cineplex faces weak release slate in underwhelming first quarter results

David Friend, The Canadian Press

TORONTO - The absence of a blockbuster movie early this year left Cineplex Inc. (TSX:CGX) feeling the fallout as the exhibitor's profits weakened in the first quarter despite each moviegoer spending more money at the concession stand.

The company posted earnings of $8.8 million, or 14 cents per share, for the quarter ended March 31, down from $15.1 million or 26 cents per share a year ago when theatres were packed with fans of "The Hunger Games," which was the biggest first-quarter opening in Hollywood history.

Revenue slipped to $248.1 million from $249 million.

Cineplex president and chief executive Ellis Jacob said the company can only do so much to encourage customers to buy movie tickets, while much of the success relies on a slate of movies that people actually want to see.

"In this business we set the table, we don't serve the steak," he said in an interview.

In this quarter, the servings were meagre, with a number of holdovers from the holiday season generating the most ticket sales. Fantasy film "Oz: The Great and Powerful" drew the most audiences while Oscar nominees "The Hobbit: An Unexpected Journey" and "Django Unchained" were also major drawers.

Family films were sparse, with only "Jack the Giant Slayer" logging a spot in the Top 5 films of the quarter, while "The Croods" didn't even register, though it was a major release for kids late in the quarter.

"At the end of the day, the bottom line is that good films bring good crowds to the theatres," Jacob said.

"When you've got these soft spots you find out ways to market to them and bring them in."

Cineplex has actively tried to quell the slowdown of traffic to its theatres in the first quarter by launching promotional coupon offers on cereal boxes and snacks as well as a deal with a pizza chain.

Yet box-office revenues were still down 2.8 per cent for the period, with ticket sales dropping to $145.2 million from $149.4 million a year ago, while attendance fell to 16,191 patrons from 17,127.

Concession revenue fell to $75.9 million from $77 million due to fewer people at the movies, but on the positive side each person spent more money on food and snacks, rising 4.2 per cent to $4.69 per customer.

Cineplex's advertising division saw revenue improve to $16.3 million from $12.7 million, while games revenue grew to $2.1 million from $1.9 million. Other revenue, which included auditorium rentals, totalled $8.6 million, up from $7.9 million.

Cineplex operates 136 theatres representing 1,455 screens under brands that include Cineplex Odeon, Galaxy, Famous Players, Colossus, SilverCity and Scotiabank theatres.

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