Member Info for HNS_77

Thanks Cruis!

With the film pipeline we have coming in the next few months “Things can only get better”

A wise person once said “the only way is up”

Can’t remember their name - if it rings a bell anyone let me know

According to Simply Wall Street the average price target from 10 analysts covering Cine has been upgraded from 51p to 55p - a move in the right direction

It is sometimes made out to be much more complicated then it is but here it is from the man himself

"A company which has now a debt of $5bn needs to take care of that. First and foremost, we need to take care of it by selling tickets. We sell tickets, we sell popcorn, we sell Coke. It is, of course, a priority for us to take the debt down."

https://www.screendaily.com/features/cineworld-ceo-on-firms-challenging-pandemic-how-covid-settled-windows-debate-/5169778.article

@LPD and others. I wrote a while back that based on the previous decisions this case was likely going nowhere…sorry to be the bearer of bad news but it is official as per the summary judgment published 22/4 - the whole document is 10 pages long so just posting the last paragraph

For these reasons, the Court concludes that Regal has not and cannot establish that it is entitled to coverage under the Policies provided by Insurers. In light of Regal’s allegations and the undisputed language of the Policies, the Court finds that leave to amend would be futile. Accordingly, the Court hereby GRANTS Insurers’ Joint Motion for Judgment on the Pleadings and dismisses Regal’s Complaint in its entirety with prejudice.

We knew it was a long shot onwards and upwards with Dr Strange and the rest!

@KTP good luck in the future and hope your decision to sell gives you the peace you were after. This hasn’t been an easy hold so don’t blame you.

For those of us still waiting for the Cine rocket to fire up once more look optimistically forward to a bumper Q2 box office and a slow and steady recovery back to normality

@lpd and mountainous- couldn’t agree more, possibilities are endless as a win win - as well as film productions imagine screening season finales of popular series on the big screen to make a big event of it both as pr for the series but also revenue generators for both streamers and cinemas

Lots of ideas to exploit if the will is there

Thankyou mountainous, I would add that whilst most of the growth is predicted to focused in areas like China, it is safe to say that cinema as a global cultural experience is not on the decline or likely to disappear anytime soon. More so studious are working alongside exhibitors to make the experience even more immersive and preserve what is special about watching film on the big screen.

I happen to think on a good day there is more collective wisdom and insight on this bb to provide a richer picture of how well the cinema industry is recovering then a lot of reports but it is good to see the professional analysis backs it up.

I have posted this before but worth a re-post given the topic under discussion. Underlying research evidence shows clear growth trend expected to continue in cinema with 2024 being the first year forecast to exceed 2019. The real question is will CINE be a beneficiary of that growth?- I happen to think yes based on my DD.

Some people seem to be lashing out in frustration via this bb waiting for the SP to rise and as a result providing overly bearish opinions which with a clear head they probably wouldn't support else why even hold the share - why back an industry you think is in terminal decline - makes no sense.

https://www.pwc.com/gx/en/industries/tmt/media/outlook/segment-findings.html

Good afternoon

My view on the court case/ appeal position

If Cine lose the appeal we know that cineplex are an unsecured creditor

If other secured creditors are satisfied with Cine progress on paying down debt and they are happy to extend covenants (assuming Cine breaches them which they may not) it begs the question:

Why should cineplex jump a non existent queue of creditors - it is not possible

If for some bizarre reason a queue begins to form off the back of Cine losing the appeal even though the was no desire to do so by creditors as they are getting paid with interest then CP would get nothing as the rest would take priority

The same applies to any kind of equity swap - Cineworld cannot offer CP equity as payment for damages as (again) others take priority

So my reading of this now is CP are likely stuck with a bill that cannot be paid which is why mooky said what he did on the call

UNLESS as we and various press articles speculate that the sum owed to CP is reduced to such an amount that it triggers no such situation - as was the case with the regal payout - the provision was made and CW are making that payment alongside other debt provisions

I have come to the view there is simply no way CP will ever see the $1bn whether they are successful on appeal or not - the debt has snookered them it’s just not going to happen so they either accept a lower sum or a very minuscule instalment which does not destabilise Cine and kills the very source that can give them their grubby damages

That said let’s hope they lose so my theory isn’t put to the rest!

Opinion should be informed by facts. Choppy waters for Cine no doubt but future for the cinema as a whole looks good

https://www.pwc.com/gx/en/industries/tmt/media/outlook/segment-findings.html
https://www.statista.com/statistics/192868/consumer-expenditures-on-motion-picture-theaters-in-the-us-since-1999/

Sort of follows if they were signalling to acquire the business in part or whole they would stand to be in line to benefit from the damages award but certainly agree it’s likely to be nonsense either way

Fun even that AMC but was being considered a while ago - you may have forgotten this article when the verdict was announced - rumour created by AMC themselves as this article attests

AMC has cash available for reinvestment and expansion,
“He may also be implying that AMC is interested in acquiring some Cineplex assets,” she said.

https://www.google.com/amp/s/deadline.com/2021/12/amc-entertainment-adam-aron-cineworld-regal-amc-stock-1234891902/amp/

You can read a version of the article here - can’t see anything new here that hasn’t been known/ speculated about already

https://villageofwauwatosa.com/cineworld-chiefs-quest-to-remain-mr-invincible/

Additional link with relevant case law

https://www.dentons.com/en/insights/articles/2022/february/3/federal-courts-are-right-venue-for-covid-insurance-cases

The regal court case was recently moved from state to federal court so this may change the hearing dates previously reported to take place in April - I haven’t been able to find a revised date

The sum of $640m has been misreported in the press - reading the documents again that’s what the assessment of losses were for a part of 2020 but the papers state they would be seeking losses on the same basis but at a [likely] higher sum as losses were ongoing due to continued closure.

My humble assessment of success reading the various documents around this (links below) is that it is virtually impossible that there will be a successful outcome here. Looking at the arguments already rejected both on first decision and appeal these mirror what Regal are arguing which is that the Virus physically altered its premises to the point it was damaged property and rendered uninhabitable.

The recent successful case in the U.K. had a specific “Non Damages” clause that was the based on restriction of access not physical damage to the property

Would be great to hear other views on this to put forward any point I may have missed but I have significantly lowered my expectations of success here.

The only thing I can see a clear payout for is the costs covered for alterations and disinfection of premises which might run into the low millions so at least some pocket change to cover the lawyers fees

https://law.justia.com/cases/federal/appellate-courts/ca7/21-1186/21-1186-2021-12-09.html

https://www.judiciary.uk/wp-content/uploads/2022/02/CorbinKing-v-Axa-judgment-250222-2.pdf#page117

Message to any de-rampers (or anyone else for that matter). If you want to put forward an argument why Cine is a poor investment could you please model what the SP is likely to be from the following worst case scenarios

1) Cine hits its revenue/EBITDA projections but loses appeal - requires debt to equity swap of $2bn to reduce debt pile to $4bn (assuming the full $1bn damages needs to be settled immediately and in full)
2) Cine hits 85%-90% revenues but wins appeal- still needs to do debt to equity swap of $1bn to reduce debt pile to $3.5bn going forward - i.e. back to 2018 levels
3) Cine gets to 70% of target revenue and loses appeal - $2.5bn of debt to equity

I have tried to model each of these and I am getting to an end result of anything between 30p-45p a share

So while that is a terrible outcome for those at high levels (unless they can average down) coming in at this current price is quite low risk. Personally I would still be in a loss but the business could continue to recover with a more manageable debt pile and shareholders would need to hang on as the debt pile continues to fall, dividend reinstated and business solidifies its position again.

The scenario I haven't modelled is a total collapse in box office revenues and no recovery- if I believed that I wouldn't even be on this board - there is simply no evidence that is likely to happen given the growth back to baseline that we have seen so far.

In short this is where Cine is:

Pro's - Past history of deleveraging, historic cashflows, revenues from big films showing return to business as usual
Cons - Court case judgement, over leveraged business, bumpy recovery due to Covid resurgences

With the headwinds the business faces even if they believe it will eventually recover many investors are not going to bother waiting for the recovery in the business which could take 2-3 maybe even 4 years to materialise.

Presuming you do actually believe Cine will recover to historic levels and return to the $1bn of EBITDA then retail investors like us who have patience to wait stand to be rewarded handsomely as the business shows it can hit the box office targets, pay it's debts and reinstate it's dividend - these will be reflected in the share price performance over a period of time

Although it's easy to forget sometimes, a share is not a lottery ticket... it's part-ownership of a business. - Peter Lynch

Simply Wall Street ( the authors of the article ) recently downgraded their assessment of fair value from 380p to 340p

@psvrichard - Box office mojo has Batman Begins at $200m domestic total ( would need to adjust for inflation from 2005 and as the debut for that trilogy which went on to pick up larger box office later on) vs $300m for this first Batman and the Joker in 2019 took $335m which should on current performance The Batman should be equal or better.

You are right in that people are hoping for films like these to exceed previous performance but the data suggests that these franchises are now performing to pre-covid levels which is all that is required to get things back on track