Cineworld pins earnings hopes on autumn 3D blockbusters

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The Independent Online

Cineworld blamed the World Cup football for a slump in June cinema attendances as it reported that its operating profits fell marginally in the six months to July. But it said it expected a series of blockbuster films to boost earnings in the second half of the year.

The UK's biggest listed cinema chain saw its operating profit drop to £14.8m in the first half from £15.2m in the same period a year earlier. The chief executive, Stephen Wiener, said heavily promoted 3D releases such as Harry Potter And The Deathly Hallows and The Chronicles Of Narnia: The Voyage Of The Dawn Treader, as well as the Wall Street sequel Money Never Sleeps, were likely to lead to a strong financial fourth quarter.

"These are great results, especially considering we knew we were going to lose the month of June to the football," Mr Wiener said. "We have got a great slate for the rest of the year. Take the Harry Potter film. The movies usually make about £50m at the box office but, with this being the first in 3D, we're expecting at least a 20 per cent uplift and even more, given that it's the first part of the final book."

Despite the effect of the World Cup, Cineworld's revenue in the first half rose 3.8 per cent to £612m. The company increased its interim dividend as it reaffirmed its full-year profits expectations.

Cinema chains professed confidence during the recession, arguing that consumers were likely to continue their smaller spending habits. But they also warned that the popularity of individual films was a key factor in determining takings. In the first six months of 2010, movies such as the record-breaking science-fiction epic Avatar helped to boost box-office receipts.

Despite overall admissions falling by 700,000 in the first half, takings jumped to £112m from £107m a year earlier. Cineworld suffered a marginal fall in customer spending on items such as popcorn and other merchandise. Advertising takings rose to £11.6m from a record low of £8.7m in 2009.

Cineworld's shares fell 4.9 per cent to 199p yesterday, valuing the business at £282m. They are up almost 30 per cent since February.