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Food and beverage spend per head over 1h22 was up 5% vs full year 2021 at Everyman Media group. It is a good indicator to what extent box office revenues can be compensated by other revenue streams such as F&B
Raising interest rate is having limited impact on interest rates of debt items of CINE
Bloomberg finally referring to the news of nhc reducing its short
US july box office crossed $1bn mark. With 5 full days to go (including one full weekend), $1.1bn is very feasible, $1.15 is likely and $1.2bn would be fantastic (it would equal levels of 2017, 2015, 2018 and only come in slightly below 2019).
It shows however that box office in general can return to pre covid levels. July month was by far the strongest performing month. With july 2022 nearing that level (without an extremely strong line up; dont forget july 2019 was fueled by two very strong performing blockbusters).
One more week until results of AMC, very good readx for CINE. Due to limited liquidity, and so far one company new holland capital reducing its short, shares could act volatile on these results.
As AMC is largely owned by retail investors, we have seen some recurring newsflow by the company that each time indicated a positive narrative. If the underlying business of the quarter / first half year would be largely underperforming on profitability or other metrics, their sounding would be much more balanced.
Everyman media showed today relatively good results. Absolutely it recorded strong growth vs pre covid. Anyhow their margin came down. Don’t forget that overall profitability levels of cinema operators in the UK are close to always lower vs US players (reason: typically higher rent contracts in general).
It becomes time for an update by CINE. Inform the market about the discussion with debt syndicate. Announce a refinancing of the RCF.
NHC reported further change to its short position in Cineworld. 23rd July, the company reduced its short by 0.09% to 2.19%.
@allkap
Also good to check to EBIT margin, as you filter out impact of D&A and depreciation of right of use assets. Some companies still own some assets so different patterns in depreciation amongst them.
But it is indeed a good reflection. Whilst some are angry on Mooky, and I think to some extent that’s fair, they also tend to forget that Cineworld as a company is much better ran than competitors operationally.
@giantsquid
You better start educating yourself somewhat more into finance instead of only referring to investopedia finance terms. Last week, you didn’t even know that also AMC had lease liabilities in their total gross debt number post IFRS16 and thought this was only the case for CINEWORLD. C’mon man, you can do better.
*assuming daily 15m for monday till thursday plus prudent 100m for next weekend —> arriving at $1.125bn
Correct. $965m at end of today. Assuming a prudent daily 15m monday till thursday, I arrive at $1.125bn, a decline of 12.6% vs July 2019. If we can post $1.15bn that would be good, only 10% decline vs July 2019. Yes, i know our base case is on admission levels, and knowing that ticket price levels are higher vs 2019, admission levels are lagging box office. BUT, it is key to understand what assumptions are included for other revenues in our base case. Is the food & beverage spend person significantly above the assumptions or not? What about advertising revenues? Positive note is that we see some inflationary effects leveling off (don’t forget most business of CINE is in the US where the energy crisis isn’t that bad as in Europe).
I feel it surprising that new holland capital is lowering its short. They haven’t been active for more than one year in CINE’s equity. My gutfeeling, as I repeatedly have shared on this board is that their short position is a hedge for their position in the convertible bond of cineworld. As they are starting to cover some of their position, could be read as they take profit on the short and are de-risking their hedge to a lower extent as they maybe don’t consider it necessary anymore to fully hedge their position in the convertible via shorting equity.
It is unpleasant we need to wait such a long period to get an update on what the situation is with regard to the RCF. But I believe the company is working on a solution. The first two months were definitely loss making, but I remain convinced as from March Cineworld is printing positive FCF. It was not yet sufficient likely to cover full repayment of what was needed at end June for the RCF, but we will get there. A new solution will be found even it will come at a cost.
As some have shared already a few times. Cinema industry is one of the few markets that are showing since January a monthly improvement each time. And not because of favorable pricing (like commodity businesses), not because od favorable product mix. No simply because the industry is recovering and yes there was and still is a long way to go. But there are positive signals. Movie studios are heavily investing again, streaming platforms are suffering and do realize that customers want entertainment and to get their attention you need to invest in marketing (this is why blockbusters score that well). Also cinema operators start to invest again at higher levels in upgrading equipment (eg recently some larger cinema chains announced large installments of laser projectors). Yes cineworld’s balance sheet is still screening weak. BUT don’t forget the underlying earnings of last six months are materially different from what they were in 2020/2021. That’s crucial when you sit around the table with your lenders syndicate. Don’t forget they all benefit if cineworld gets back to normal.
With some luck we end up by tomorrow evening crossing the $1bn mark for the US box office revenues for the month of July. With one full week to go, I think it is very feasible to reach more than 1.1bn this month
It is not that easy. NHC is likely involved in the convertible bond of cineworld. As long they have this quasi equity exposure, which is only convertible to equity at a higher share price level, they will likely stick to their short in the shares. They will only convert to equity if: 1) share price is at higher levels , and 2) if overhang of cineplex dispute is solved or cleared.
Dude if you include lease liabilities in your magic number for cineworld, don’t forget you also need to do it for AMC. As such, total debt for AMC is higher than cineworld, ******
@giantsquid
If you claim to do proper research, it’s time to acknowledge that AMC’s debt pile is higher than Cineworld’s. AMC total debt is >10bn, you really spread wrong information f*cking los*er
One main argument why CINE will definitely not end up like VUE is that there is still an overhang of the Cineplex dispute. Debt investors simply don’t want equity exposure in such a scenario
@mountainous
It’s not a debate whether it’s false or true.
The thing you explain is simply true. That’s also why cineplex is arguing in their appeal to have optionality to get rewarded differently given they acknowledge it could take YEARS, Decades, to see something coming their way…
@ocean ******
People writing for Motley are as worthless as your comment. Often consist of simply students or individuals that have been writing on financial markets for a magazine or blog with a general interest in stocks, no deep understanding of finance.
If someone can broadly explain me why we haven’t seen any major hedge fund heavily shorting cineworld over the recent months, than we can end this conversation. The majority of reported shares are hedged because of their exposure in the convertible bond. If cineworld goes bust, you won’t have increased your position in the bond recently. If you believe cineworld would go to zero, you would have seen companies such as citadel, marshall wace etc being short, it’s not the case.
65% of 456m; so 296m. But they have also a minimum liquidity covenant they need to comply with, which is $100m and they had $354m cash at hand.
That’s also why they are seeking deferred payment to regal shareholders. Since march, we are cash flow positive, so january and february were not great, but march-april was break even, to cash flow positive and may and june we should be able to print good cash, so it wont be easy, but also not impossible i believe
End of june… simply 30th of June, they check the convenants. How much is withdrawn… you can basically repay 65% on june 30 and withdrawn everything again the day after.. that’s how an RCF works
Yesterday after close, AMC reported that it global admission revenues for the weekend june 9-12 was 15% higher than the comparable weekend in 2019
Highlighting once more that the revenue recovery profile is stronger than ever at this moment for the industry.
I might sound over optimistic, but i remain aware of the risks around the court case. Around debt position, if cineworld experiences another strong two weeks and can play with cash (postpone payments to suppliers, postpone capex payments, natural inflow of working capital, defer payments to regal shareholders,..) we maybe might pay back the rcf sufficiently or get a waiver
US box office that is.. first time since covid