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Debt covenants are not due till June. I fully expect court case to get overturned on appeal. Never has there been a single case of lost synergies for the selling company. The appeal court will take five minutes quashing this. Studios need cinemas more than ever. Market now realising the extent of the streaming wars and the many billions needed to just survive. Expect after March shorts to increase on studios and market to go long on cinema chains
@FunInvestor - CINE's base case scenario was that they hit 90% of 2019 levels by the end of 2019 (which as you rightly say they did - in October) but also that they maintain it (which obviously so far they haven't). I agree though it is not a bare minimum as this is a scenario in which they felt they would not breach the covenant - we don't know if 85% or whatever would also be enough. And as I mentioned in my previous post I think they will still be ok one way or another.
Base Case wording from the accounts below for info:
"The Group’s base case scenario assumes a continued gradual recovery from the current shutdown, with cinemas across all
territories remaining open. Admissions are forecast to return to levels representing 90% of comparable periods in 2019 by the end of the year. Admissions are then forecast to remain on average 10% below 2019 levels throughout 2022"
Mad, where is it stated Come need 90% as. Bare minimum?
It was one of a number of projections the business prepared some time back and was for them to achieve by end last year (which basically they did!!!)
The company, not a random BB poster or news source of unknown substance stated they were cashflow POSITIVE at most recent update.
Company achieved covenant waivers and extensions when required under worse circumstances so I personally have no reason to fear them not being able to do so again (should they required).
Quarter on quarter as they opened back up they have progressed.
Let's see March update and then where we are at end Q1 and then Q2 this year.
All have our own opinions and views and investment choices.
Not trying to get you to invest ;-)
Everyone run for the hills TheMadStork has spoken.
FunInvestor I make you right.
I believe that CINE will improve as we get nearer to the final results on March the 17th and into the popular run of film titles.
As the stock rises I believe more shorting companies will enter the market as the volatility in CINE is not going away any time soon.
Shorters will need to push the share down so that re-short again at the higher value.
GLA
"Debt covenant breach is absolutely nailed on."
No it isn't. Using CINE's own projections where they felt they needed 90% of 2019 revenues by the end of 2021 (and then to maintain those levels) to avoid breaching the covenant then there is still a good chance they'll be ok. Given recent figures they obviously need more than 90% now for the remaining months but with the films Fun has listed there is every chance they'll get enough.
Even if they don't, providing the run-rate and outlook by the summer is much better, another waiver will probably be given.
Funvestor:
It's of course true that one month in isolation means very little, but the overall trend speaks for itself given that CINE needs 90% of 2019 at a bare minimum:
Jul 21: 50%
Aug: 54%
Sep: 60%
Oct: 90%
Nov:56%
Dec: 88%
Jan 22: 50% (est)
These are disastrous figures when you consider that CINE needs to be trading at a debt:ebitda ratio of a max of 5:1 in order to maintain covenants. We shall see more on full year results but the figure for 2021 is more likely to be 10:1, which is plainly unsustainable, and the overall figures for Q1 22 are going to be similar.
CINE cannot maintain its existing level of debt and that is *before* the £700m judgement hanging over the company. D4E is absolutely nailed on in my view and exiting equity holders will be left with very little. There is too much debt and box office figures simply are not recovering at the pace they need to be in order for CINE to have any chance of repaying it, again *before* the Cineplex judgement is taken into account.
Jackass for Feb too. Might not be the next $bn BO, but from what I've seen and people looking forward to it, it will do well, hopefully!
Thankfully we are not invested in a one month business.
Like all businesses we require product - for January there was none of note.
Let's look ahead though to see if we have anything that will mean future months will take more than January.
February - maybe not great but we have Moonfall, Uncharted and Death on the Nile.
March - The Batman, Downton Abbey, The Lost City
April - Fantastic Beasts, Morbius, Sonic
May- Dr Strange, Top Gun
June - Jurassic World, Lightyear, The Black Phone, Elvis
July - Thor, minions, Black Adam, Bullet Train
There are a number of as yet unnamed big studio releases through year also and we get towards end year with some that might just take a bit money - Black Panther, Aquaman, Avatar (and some others).
I am under no illusions there is still further recovery required, but the picture is NOT represented by selecting the month that has no product of note in isolation.
I stand corrected on the weekends thing: there are only 4 weekends counted in the '22 figures and it is true we haven't had the last one yet. Can't see that adding much though as there are no big releases. YoY vs 19 and 20 it is still the case that 22 is a massive disaster and far below what CINE needs. Debt covenant breach is absolutely nailed on.
TheMadStork from what I see it seems the first weekend of Jan is actually recorded in December. Let me know if thats wrong. We are also yet to have this weekend.
Either way this was to be expected due to lockdowns and postponed films.
Tell us something we don’t know, it won’t pick up until feb
The UK box office figures for January are looking disastrous, as are the US figures. Looking at around 50% of 2019 or 45% of 2020, which is especially bad since Jan 2022 has 5 weekends vs 4 for 2019/20.
To say we're now well into a January with no big releases the latest data is interesting, comes out every Weds. Spiderman remains on top of the charts but Belfast has had a strong opening. Encanto has done a few million despite going to Disney + pretty early and good showings from Clifford The Big Red Dog, Scream, Kingsman and West Side Story. There's clear life in the cinema industry, it's just whether or not the debt is too great a burden. https://www.bfi.org.uk/industry-data-insights/weekend-box-office-figures