Mediocre movies see Cineworld suffer

 

The cost of going digital and a run of average 3D blockbusters have dragged Cineworld's profits down this year, but the group is confident that a strong slate in the second half will see it hit full-year targets.

The cinema chain, which is the largest in the UK by market share, saw operating profits fall to £13m in the six months to the end of June, down from £14.8m a year earlier.

The profits were lowered by the cost of the company's strategy to convert its screens to digital. By the end of June, 494 screens had been converted, with a further 80 due this year.

Also, despite the release of The King's Speech, at the start of the year "overall the film slate was weaker", the company said. While there were more than double the seven 3D releases of the first six months of 2010, none could match the popularity of Avatar or Alice in Wonderland. Admissions for 3D films dropped from 20 per cent a year earlier to 16 per cent. Yet group revenues rose 1 per cent to £164m as wider admissions rose 2.2 per cent.

Stephen Wiener, the chief executive of Cineworld, said that he was confident for the full year, pointing to forthcoming movies including The Adventures of Tintin: Secret of the Unicorn, Twilight Saga: Breaking Dawn – Part I and Mission: Impossible – Ghost Protocol.

"The strength of the film line-up in the second half, coupled with our solid first-half performance, underpins our confidence in performing in line with market expectations for the year and delivering further value to shareholders," he said.

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