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@Popeye what information are you using to say that CINE will be making a loss at 2019 revenues? The forecasts I have seen show a very different picture

I liken that to responses like “wouldn’t rule out using nuclear weapons if we had to” if you ask someone a question with an extreme enough scenario then they are bound to give an extreme response

In other words things would need to go very wrong for a lockdown to be considered

There are varying opinions from the usual sources (SAGE etc) on whether a temporary 2 week firebreak lockdown over half term would be beneficial - there is no consensus view that it would and it’s based on a hypothetical scenario of the NHS being at threat of overwhelming hospital admissions

It was only a matter of time:

Biden announces new vaccine mandates that could cover 100 million Americans

Whatever your opinion on vaccination and personal choice if this goes through it’l can only be good news for CINE to get those infection levels down and bring further investor confidence for a post pandemic future of fully occupied cinemas!

https://edition.cnn.com/2021/09/09/politics/joe-biden-covid-speech/index.html

Figures taken from Simply Wall Street

At December 2019 Cine had a dividend yield of 12% at $0.15 per share
For the same year Revenue was $4.37bn , Cash from Operations was $1.29bn and a earning of $180m
Based on forecasts provided Cine has a negative earnings until around Feb 2023 and December 2023 they expect to be at $4.28bn with earnings of $230m

My interpretation of this is that pre Covid Cine had debt but were able to service its debt at the levels of earning described and pay a Dividend. I know I have simplified this as debt has compounded but debt will be being paid as earnings start to trickle through and the company will continue to reporting losses.

As CINE move towards normal earnings with the assumption by December 2023 similar revenue and profit as 2019 and with no likely dividend being paid in the foreseeable future Cine has the ability to direct more cash towards reducing debt to a manageable level - this is all hinged on the ability to get to those previously levels of trading (obviously) which is why box office reports are a useful proxy to track this recovery.

So in reality by being long on Cine is as others have said to have a lot of patience and stamina as well as a dose of reality around how long it is likely to take but that's not to say we won't see decent rises in the meantime as long as there is a sustained period of good trading.

the only other point I would add to this is that the Cineplex litigation was known about both when Cineworld secured the $450m debt facility in November 2020 as well as the further $200m in Loans and Debt Covenant Amendments in July-

What this tells me is that the banks would have had to be strongly convinced that either Cine had a strong counter case or that the outcome of losing the court case or potential settlement was not going to be materially damaging to Cine in terms of any financial remedy they would have to make to Cineplex

I expect in the process of drawing up their agreements lawyers would have had a lot of dialogue on this and that provides me with some comfort that this won't be a major issue for Cine regardless of the outcome

Some interesting stats from the CDC (US equivalent to Public health England etc ) based on the latest data showing 2600 hospitalisation in the week 21/8

Of those hospitalised 62% were over 50 years old (the majority over 65)
34% are 18-49 – that is a wide category so I am assuming given the risk of hospitalisation by age for vaccinations that most of those are skewing to the over 40’s

Per 100,000 population the rates by main ethnic groups were 6.5 (White) 6.9 (Latino/Hispanic) and 11.3 (Black)

Now overlay some cinema attendance data…

In 2017 data showed that 58% of movie goers were under 40 years old - over 60s being the smallest group at 12%
Black (12%) and Hispanic (23%) make up combined 35% of the Cinema going population

So what do I take from this? - As 96% of hospitalisations (during delta) caused by covid could be occurring in populations that are least likely to make up cinema audiences by age and that the highest rate of covid is in ethnicity which are the lowest % of cinema goers – that’s before you even begin to factor in the skewing nature of this towards states where vaccine uptake has been lower and more unvaccinated people walking around getting seriously sick with Covid

This data is widely available and I would be very surprised if studios/cinemas are going to embark on major business decisions like closing/pulling films by reading tabloid headlines about Delta and disregarding the real underlying picture which on the whole shows that the vast majority of movie going population are unlikely to be impacted the disease in any seriously detrimental way.

Rather I would expect they will have undertaken very detailed segmentation analysis far more then what has taken me a few minutes to put together to understand if profitability of their product i.e. films are likely to be affected by the demographic the film is largely aimed at.

Looking at box office figures for Wonder Woman 1984 it did $46m domestic US vs £181m for Black Widow - I would pitch the interest in these films about the same if not higher for WW given the success of the first film.

Given WW was released at the height of the pandemic and many cinemas closed it would make sense to me to re-issue these films as there is money on the table for this and other films like Disney's Mulan - I highly doubt everyone who wanted to watched it used streaming - I know I would watch it if it was released now especially if there are some gaps in the slate appearing

According to USA Today - The U.S. is averaging 900,000 vaccinations per day, up from 500,000 per day in mid-July

Polling show lowest opposition to vaccination since records began

Vaccine mandates flying in thick and fast

The tide will eventually turn for those willing to stay aboard the good ship cine!

Dedicated to all dearly departed CINE'rs

https://www.youtube.com/watch?v=AwD2IDKd3Cs

Biggest news this week was FDA clearance for the Pfizer vaccine age 16+. 90 million Americans still unvaccinated and there are reports making compulsory vaccine requirement for students to attend uni as well as millions of employees across state and private sector

Let’s not be naive Governments are not going to sit back and let “personal choice” risk wrecking business and economic recovery - the tide will continue to turn and with it confidence the trading environment for business like Cine look even stronger going into 2022

https://www.reuters.com/world/the-great-reboot/us-covid-19-vaccine-approval-is-seismic-shift-legality-mandates-experts-say-2021-08-24/

Just in time for Bond!

"The Medicines and Healthcare products Regulatory Agency (MHRA) said the clinical trial data they had assessed had shown Ronapreve may be used to prevent infection, treat symptoms of acute Covid-19 infection and could reduce the likelihood of being admitted to hospital because of the virus."

Hopefully not long before FDA and other authorities approve this and increases speed of our journey back to normality and with that back to usual levels of cinema attendance!

https://www.reuters.com/business/healthcare-pharmaceuticals/uk-regulator-approves-first-monoclonal-antibody-treatment-covid-19-2021-08-20/

Just trying to process the Cineplex logic here - reading these documents it seems that whatever the rights and wrongs of the case Cineplex are sueing for damages of $2.18bn - which was the value of the business at the time the sale was agreed as if the business ceased to exist as a result of the failure to complete the transaction.

If I understand this correctly an example might be if I failed to complete on buying a house then the seller gets to keep the house and sue me for the purchase price! That doesn't make sense at all and this quote from Cine in another article seems to bear that out

“In any event, Cineworld believes that Cineplex’s claim, if successful, would be limited to its costs and expenses incurred in relation to the acquisition and would not be assessed by reference to the consideration that was payable under the acquisition.”

It would be interesting to have an idea of what that might be but I expect it would be a much less scary number regardless of who is judged to be right or wrong in this case!

Anyone heard of Occam’s Razor? : The simplest explanation is usually the best one. If we woke up today to news that Covid cases had fallen to near zero and delta was not rising I can say with 100% conviction the share price would be through the roof on the anticipation of near guaranteed uninterrupted trading for the rest of 2021 and beyond - given that’s not where we are I expect very little movement either way from the results on Thursday as we can guess from box office revenues what the likely take has been and we already know that Cine have likely not met their base case projection of 60% of 2019

That said my personal view Is that as ****ty as it gets we will make it through delta/cases rising and will not interrupt Cine trading mainly because a) US cases are mainly rising faster in states where there are fewer Regal cinemas and b) Vaccination numbers are rising again as people slowly realise it’s idiotic to risk their life believing rumour and bs conjecture on social media

CDC data shows 99.999% of Fully Vaccinated Adults have NOT had a breakthrough case of Covid 19

The article goes on to state that of that tiny number those that have a breakthrough infections 75% of those were over 65

And to bore with one last statistic figures from Sunday 1st August showed over 800k vaccines part of an increase trend away from the slow down in vaccinations

So all in all precisely a vanishingly small infection rate in number of the vaccinated cinema going population - let’s keep those vaccinations rising in time for Bond!

https://www.google.com/amp/s/amp.cnn.com/cnn/2021/07/31/health/fully-vaccinated-people-breakthrough-hospitalization-death/index.html

https://www.google.com/amp/s/amp.cnn.com/cnn/2021/08/01/health/covid-19-vaccine-doses-administered/index.html

Meanwhile across the pond more reasons to believe the continued recovery towards normality

Cali and NY are planning to mandate vaccination for govt workers or face weekly testing (two of Cine’s largest territories in the US)

Numbers of those coming forward for jabs is starting to increase as campaign from both right and left wing public figures

Also read in another article that Biden expects FDA approval for Pfizer/Moderna in August which will provide a stronger legal basis for mandating vaccination as well as polls that show a significant number of those hesitant to have the vaccine would if it had FDA approval

https://www.independent.co.uk/news/world/americas/california-nyc-to-require-employees-to-get-covid19-vaccine-california-white-house-joe-biden-bill-de-blasio-nyc-b1890926.html

https://www.reuters.com/world/uk/end-britains-covid-pandemic-might-be-near-epidemiologist-ferguson-says-2021-07-27/

Imperial College epidemiologist Neil Ferguson said the end of Britain's pandemic could be just months away as vaccines have so dramatically reduced the risk of hospitalisation and death.

"We're not completely out of the woods but the equation has fundamentally changed,”

@smalltrader thanks good to hear my findings reconcile with your analysis

My point to the original poster was that this isn’t as black and white as he seems to be making it out to be there is clearly a positive trajectory and story around how the business is recovering to 2019 levels which is the basis the business secured funding on - this matters when you are talking about debt covenants and the bearing it has on the business rather then seeing it as this nebulous thing

@Big plan I don’t think it is as black and white as you portray - you are right in that people on here will be emotional in the sense they are annoyed at seeing the value of their investment diminish but to make a broad brush statement that it is a bad investment is too simplistic perhaps it is if you bought at 300p rather then 22p - all depend on your entry point right unless you really believe this business is going to be worth zero in the near future which I happen to disagree with not because of emotion but looking at the figures the business is doing

For example having undertaken some analysis on the actual scenarios that Cine laid out in their 2020 results report and mapping across box office revenues the base case scenario is likely to be missed.

However drilling into the detail for example the data shows that the average revenue per film in June was about 82% of 2019 revenue (ref box office mojo) but the problem being that the number of releases is about half what it was in 2019 even taking account streaming/delta fears and all the other stuff that gets discussed here so in actual fact demand in terms of box office revenue is actually showing to be doing rather well just there isn’t the volume of films for punters to go and see

Does this mean all is rosy in the garden of course not , still many challenges ahead and Cine has obligations to its lenders that it has to satisfy but all things considered everything is going in the right direction and hopefully continues

I have been compiling data that looks at where the bulk of Cine’s Regal business takes place in the US by state (based on proportion of cinemas) and cross referencing this with vaccination data to build up a picture of how resilient the populations that Cine serve in its major market are likely to be in light of media reports of delta in the US taking hold in areas where there is vaccine hesitancy.

I am happy to share the full analysis once it is complete to anyone interested but so far the picture is very positive. For example in Regals biggest territories California (15%) , Florida (8%)and New York (8%)we see full vaccination rates of 51%,47% and 56% . For comparison the U.K. is at around 52% fully vaccinated

These account for 31% of all Regal cinemas and 70% across 13 states which so far look like states that will have similar levels.

Based on what we know of the effectiveness of double vaccinated populations and ability to reduce admissions and deaths this gives me confidence and reassurance that despite the increase in cases being reported in the US there is very little likelihood that this will take hold within the markets that make up the bulk of Cine’s US business which as we know is the main revenue source for the company as a whole.

As I work through this I will drop in an update

Not quite Yolo’ing but another £10k just before it went to 64p - done as much as I can today to help fuel the Cine rocket !