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Debenhams certainly hasn't done Boo any good SP collapsed more than Cine over the last 3 years.
Looking forward to a increase in Cine SP over the next few months with some brilliant films 'coming to a Cinema near you ' just want this bloody appeal to be over soon so we can move on, looks as though the Ducati Panigale is go to have to wait until 2023 .
Thanks Hexam it makes sense. So with my regression comparing the B.O. and the turnover with $7.5bn Cine should reach $830/850m of Adj. EBITDA which is more than the financial expenses. Which is not bad at all.
Sure AllKap,
YTD is $2.4bn.
I think the last week of May will be excellent with Top Gun and June should be at least $800-900m with Jurassic and Lightyear both coming out earlyish in the month and Top Gun still running.
So perhaps $3.6bn+ by end of June.
Q1 was basically a write-off aside from Batman because of Omicron/lack of films so would think H2 would be better than H1 by at least 10% so $4bn maybe? Put another way surely we should expect at least $650-700m a month after June? I know some months are looking sketchy at the moment but there are some monsters in there like Avatar and Black Panther.
I would certainly be disappointed if numbers go backwards in H2. Just can't see it.
Great to hear @Hexam, let’s hope for the best :)
Hey Hexam can you please breakdown your estimation for the B.O. for 2022? You are very close to Bloomberg but when I calculate on my own I found $6.7bn.
Cheers
"I think that Debenhams is a completely incomparable company."
I agree. I wasn't comparing it. I should not have said 'Debenhams' but 'Company X' or something - i.e. any company that was open for business but is now not.
Thanks for the comments though and to improve my 'positivity rating' would just like to add that in my view US Box Office this year will exceed $7.5bn and will be enough to make CINE both cash positive for 2022 as a whole AND be profitable (i.e. positive net income). Then I'll definitely be satisfied :-)
@Hexam, I think that Debenhams is a completely incomparable company. Yes, you are correct in saying that operating does not equal profitability, but CINE as a business has much higher operating margins than a company like Debenhams. The two are country miles apart.
I don’t believe you are a deramper, I believe you have a genuine invested interest in this company, and you frequently post very useful information. I do believe we have very different perspectives as to how we look at this company’s performance, and that is ok. Disagreement is what makes the stock market run :)
Lmil13 I have calculated $6.7bn for the B.O. as of 2022 so very close to yours ($6.8bn) Bloomberg forecast stands at $7.7bn for 2022. I have made a simple regression from the US B.O. to calculate Cine turnover which is 40.25%. So if we reach $6.8bn Cine turnover would stand between $2.7bn/$2.9bn with an EBITDA margin of 27.5% Cine will stand at $750m/$800m which will cover the leases and the financial costs. Again for 2022 I am expected a negative net income which is ok as Cine will receive Tax credit for the next financial years. If in 2023 the B.O. increase by only 20% to only $8.2bn the EBITDA will reach c. $1,000M then we will have cash positive and start to reduce our debt. Even for Airlines they are expecting to reach the same level of 2019 in 2024/2025 I think the same will be for Cinemas. One more thing that is really important if you read the financial reports you will see that the number of IMAX 4DX and VIP and X screens have increased in 2022 which means more profits margin.
For goodness sake mountainous read my posts properly. The ONLY reason I mentioned Debenhams at all was that someone basically said that CINE is open for business so everything is alright. It is not - a business not only has to be open it has to be doing enough business to pay its debts and make profits which at the moment it is not. I have also said repeatedly though that I believe it is only a matter of (a short amount) of time that it becomes profitable - which is very positive.
CINE is a very different business to Debenhams and a much better one as I made clear so please don't twist what I say - you're normally a much better poster than that.
@hexham and @Allkap, thank you very much for insightful replies. It is much appreciated. Still not profitable is my concern and with disposable income shrinking, I feel, the recovery, if any, may be longer than expected.
I asked this simple question this morning to see what people would say. I invested in YELL some time back and made a small profit before it went bust. Was thinking CINE is following that slide with massive debt (final figure still to be confirmed through the court case)
@dinosaur I'm just a private investor with a few K invested and didn't start the thread to "get retail investors out"
Goodness me. People will really search high and low to avoid looking at the positives. We have had a 131% increase in box office performance as well as a positive quarter last year and now we have comparisons between CINE to Debenhams.
How does someone look at Debenhams and Cineworld and say ‘those are easily comparative with each other’? You could probably compare Cineworld with the grass in my back garden and that would be a more accurate comparison than Debenhams.
Mooky could reach into a popcorn machine and find £100bn in cash and some people would still say that CINE isn’t meeting their base case. Lighten up a bit.
Watch out, because if/when CINE gets a positive outcome from the litigation, we will still have people expressing dissatisfaction. Some people are just impossible to satisfy…
Yes, everyone is entitled to express their own opinion. I am also allowed to express my counter-opinion as well.
Hi Beta - I used the H2 numbers as these are detailed - I'm not aware of any detail on a monthly basis in either Q4 or Q1 so not sure they can be used?
As to the improvements since H2 how do you know if any structural cost savings achieved, and not already in H2 2021, are greater than the inflationary cost pressures that we know are now hitting? Is there any evidence that the other revenue items this year are higher than late last year? And what about interest - that is surely higher than last year?
Also I don't see how you can say Q2 will easily outperform Q4 2021. Having said that I agree that Q2 could end of cash positive if June is good enough ($800m+ at US Box Office) but my point was we are not cash positive as of now.
I think though in essence we agree on the key thing though and we shouldn't get caught up too much in the detail - that is:
Providing Box Office improves as much as I think, and you suggest, then the business will soon be cash flow positive and making profits. Just have to see just well Top Gun, June and the following months all do. Early signs are promising though - especially with Top Gun.
Just in terms of US box office alone the box office for Q1 and 2 2022 will likely be the same as Q3 and 4 2021 at around $3.4 billion if not slightly less (not taking into account the other increased revenues which may well be higher as you suggest). At these levels and considering the lesser slate over August and September, the year will probably finish at around $6.8 billion - this is around 60% of 2019. Hopefully more films are added (e.g. from Netflix) and attendances continue to increase, but it wont likely be much more than that ($7.8 billion, for example, is 70% of 2019 which would be excellent progress but very unlikely considering the relative lack of depth in film releases).
@hexam
The way you should be looking at it is on a monthly base. October was cash flow positive; november was not, while december was cash flow positive again.
Q1 2022 was close to Q3 2021 (in terms of US box office) . Difference is howevern, in Q1 2022 we have higher spending per person on F&B, higher advertising revenues, structural cost savings, and a better performance at UK\IR & RoW.
So far we have for Q2, being at 53% of q4 2021 result, but we still have 1 week to go in May and a strong expected month for June. —> q2 will easily outperform q4 2021, so we will make more cash, and don’t forget the elements i posted for q1 also account for q2!!
Hi Allkap - Yes, the payment to Regal Shareholders was made in H2 but is excluded from the numbers I gave as it is an exceptional item (the footnote on the CINE slide clearly states this). So the cash flow I gave would be a negative of $150m or so if it (and other exceptional items) were included (as total adjustment for such items was £62m).
I agree it is not that much of a concern as things are now getting better but it is just a bit frustrating that some post here as if CINE is already cash positive and making profits which is misleading. Come Q3 though, and possibly even Q2 if June is good enough, I would hope that CINE will be positive on both metrics.
Thanks Hexam, more excellent posts.
Q4 2021 sorry
They paid Regal shareholders for $60.7M in Q4 2022.
The reason why they have postponed to pay Regal shareholders is to keep as much as cash possible to be in the positive territory and we are on the track.
I have invested in Air Lines as well for their Q1 2022 figures are above expectations but still with negative income.
2023 and obviously 2024 would be great for Cine. Even if we are losing $50/80M a year we still have $354M. We can survive until 2025 at least and negotiate with the lenders.
But I will double check on the figures. I am sure that Cine paid partly to Regal Shareholders
AllKap - Thanks, I appreciate it but I am simply talking about cash (not EBITDA as this is just one of the starting points from which cash can be derived) and I understand fully how depreciation etc. works from my own background. By the way the finance expenses are large - mainly from the lease payments, which are not included in EBITDA, as well as the interest.
I worked out the cash flow from the accounts and this agreed very closely with the figure that CINE gave themselves in their presentation which was a negative of $89m for H2 2021. This is key for understanding whether they may need to borrow more or can start repaying debt and for the second half of the year they were still losing cash (and indeed they did drawdown more from their loan facility in H2).
The adjusted profit before tax is simply from got from deducting the half-year figure ($659m loss) from the full year figure ($823m loss).
These numbers are CINE's (not mine) and excluded one-offs (like the tax credit you mentioned, impairments etc). Of course there could be one-offs in 2022 as well but these could be positive or negative. At the moment though it seems clear (unless I've missed something) that normal operations are probably still cash negative at the moment and the company is still making losses BUT that this will change in the second half of 2022 IF the box office picks up as much as we hope.
Cine is one of, if not the most interesting stock for UK retail investors.
Threads like these are started to get retail investors out.
I know most see through them, but it's worth reminding.
Hexam I am happy to help. Regarding H2 2021. The Gross Profit was at $532M and the Adj EBITDA at c. $520M. The first thing you need to know is that investors looked at mainly at the Gross Margin & the EBITDA (those reflects if the company can generate cash). It was positive for Cine in the period. After the EBITDA you have 2 major costs the D&A (Depreciation & Amortisation) and the financial expenses (interest charges from debts, loans and the lease). But you need to know from here that only the financial expenses are a real costs. There is no cash out from the D&A. If you buy let’s say new Lasers for the screens so it’s an asset but you need to depreciate it for 5 years (if my memory is good from accounting at the Uni). So you will say that my assets have been depreciated for xxxM of dollar but it’s not a real costs it’s not a cash out I would say. So you need to be focus on EBITDA minus the financial expense it’s still positive so we are good. Cine didn’t need extra cash for H2 2021 only for H1 2021 because they were closed. The positive thing with a big D&A it will put our net income before tax in the negative territory and we will have a tax credit from the government. If you add the tax credit in 2020 and in 2021 we are almost at $580m. Don’t be surprised to see a negative income for 2022 as well. So once we will be in the positive territory we won’t need to pay taxes for that amount but instead the lenders without affecting the balance sheet of Cine.
Allkap - I have looked at the income statement and balance sheet.
The second half of 2021 showed adjusted loss before tax of $164m and negative cash flow of $89m. This period includes Regal of course as well as the uplift from the higher income per person (from concessions etc.)
The average monthly US Box Office in that period was $572m. Similar to both March and April this year and May is not likely to be that much higher.
I therefore cannot see how the company is generating positive CF or profit at the moment but if you think I've missed anything then would welcome it as even though nobody likes to be wrong this would be good news so would be more than happy to be.
Please forget Debenhams, I could just have easily picked any recent failed company and again to be clear CINE has a big advantage over those companies - a product that enough people want (we just aren't seeing it yet simply as there hasn't been enough films for them to see).
Hexam in 2018 the net income was negative -$460M. In 2018 Cine’s net income was positive $280M (without taking into account Regal). During the last 5 years the Gross Margin of Cine stands at 30% vs. 0.66% for Debenhams. In 2018 the operating margin was at -21.14% and for Cine in 2021 (knowing that it was closed almost half year) was positive 0.88%. Even if the shop is open you need to look at the income statement and Balance Sheet.
Cine does not need to be 100% of 2019 to be profitable. 85% is the base estimate but not reaching it does not mean the company will go bankrupt.
A cash positive April, May, and June will change the outlook of the company and will deserve a re-rate if CINE no longer needed to add into its debt and start the deleverageing.
*tom231 - apologies for getting your name wrong. As I said, agree with what you say. We're not at 2019 levels yet (and don't need to be in order to be profitable) and I'm more than hopeful that the rest of the year sees enough improvement to see CINE generating both cash and reported profits again.