Member Info for HNS_77

The only thing that is guaranteed in business is there are going to be surprises

The skill is how to deal with the surprises when they arrive and overall they did the best they could in the circumstances although I’m sure resident armchair CEOs would have of course done so much better

If the lenders are only interested in getting back their money they will inevitably have to risk it again on some other business venture to get a yield - so perhaps they will weigh that up against the vastly improved box office predicted for 2023 -2024 and continue to support Cine’s journey back to profitability

you do not get 3 of the top 15 grossing films of all time in 2021/2022 by accident

Not sure what reference you are using Hexam but just looking at 2018 the Operating Profit from the 2018 annual report pg33 shows £125m for U.K. and ROW at £129m (US was 670m)

Either way I am not suggesting the retaining the U.K. only is preferable to RoW only but that as a combined entity makes for a more viable business without Regal

Will continue to keep fingers tightly crossed either way!

Hexam - ROW accounts for 13% of revenues and U.K. is 19% unless they operate a significantly higher margins I can’t see how RoW is more profitable

My aim was to try to understand the latest statements not try and make up a theory I would like to see - from the argument you and others have set out seems viable what you are suggesting as opposed to just selling regal - hope it is wrong or if not that no good offers are forthcoming - retaining a business generating 13% revenue would have a tiny valuation and certainly obliterate shareholders - why that is a viable option for Mooky and his 20% shareholding if baffling

If that is the case I revert to my previous post which is I hope they get no “value maximising “ interest from the process and can get on with the recovery as a whole entity - I can’t see how retaining a business with a few cinemas in Israel and Eastern Europe will end well for shareholders

Also the carve out of ROW at the beginning could be a red herring if we believe the lawyer that they have only recently come to accept this option and that this idea or transacting an asset sale has been resisted up until now

@Hexam I may have missed this but isn’t the US business the only part included in C11 not the U.K. or ROW so your quote about the group being defined as those in C11 is the US regal cinemas?

Also the only business that trades as Cineworld is Cineworld U.K. perhaps that is irrelevant but surely makes more sense they would want to reverse out of the US only - would a buyer like Amazon/Disney etc really be interested in a small market like the U.K.?

Fun No need to be upset I was parodying your straw manning of my original point as I didn’t mention
56p “arriving this year”

That said if my theory pans out to be correct pre regal Cine sp steadily tracked over £2.40-£3 with less shares hence the “dilution” in sp if returned with current shares outstanding - this is reflected by the revenues/ divi it generated - its never been a growth stock

At 65% of box office revenue using 2022 performance figure it would give a sp of circa 37p not quite cartwheels at that price but I could probably squeeze out a forward roll :)

If my understanding is correct Mooky is looking to turn back time and sell the regal part of the business and use proceeds to pay down the debt out that will still sit with the existing Cineworld

This would leave us as shareholders in the smaller Cineworld

My back of *** packet calcs - Cineworld pre regal had 270m shares outstanding vs the 1.4bn now - back then the Mcap was £800m which if we assume it all went back to previous would leave us with a sp or around 56p

Patience thanks for sharing this really good to get some info from the horses mouth for once

A few things about this still confuse me

The article talks about a “holistic going concern asset sale” but my understanding of the definitions are the asset sale is not a going concern that would refer to a share sale eg the business as Cineworld itself transferring to the purchaser not just parts of it that it owns

At the same time they talk about this not being sold piecemeal but as a “group”- so by group do they mean the entire regal group of cinemas rather then the Cineworld group - and that this is seperate to the U.K. and ROW operations would remain as Cineworld given that the Regal is the only bit in C11 and is treated as a separate entity?

If that were true would we end up as shareholders of a much smaller Cineworld and that somehow would result in the significant dilution they have been warning in every RNS they put out?

If any of this plays out who assumes liability for the outstanding CP judgement I assume this still sits with Cineworld if it continues to exist

You realise “this guy” has been whoring across any platform that will listen to him and that he is well known for shorting Cine hardly going to paint a balanced picture!

Whilst he will clearly have done better then any of us from his short I would argue he has been very lucky particularly with the fraudulent judgement that went his way - without that Cine’s position would have been very different indeed as confirmed in the opening C11 statement choking off investors and any hope of negotiating terms with lenders

Box office is over 3x the pandemic year and likely to continue retracing - the streaming argument is done and given more time Cine can recover - whether that is with shareholder in tact only the almighty knows !

@Stanley

For me not selling seems the best of all outcomes -in Jan 2022 I put together a spreadsheet of all cinema releases forecasts a range of 7.2bn- 8.3bn) us domestic was close to where it ended up

I did the same thing today with 2023 release and I’m getting 8.3bn - 9.8bn

these numbers chime with industry and would be a decent improvement on 2022 and further evidence Cine continues to March out of the covid **** storm back to business as usual

@link op

If the business was sold at the cost or less of current debt levels equity value would be worth 0 = total wipeout

If it was sold for debt + current value or equity eg plus the 50m market cap then for those with higher averages we still get smashed

That’s my understanding of the possible outcomes

Yes the key word being “if” - so as I see it 3 scenarios could come of this

1. It attracts a low valuation from interested buyers
2. No interest at all
3. Bidding war arises from various interested buyers

This would be a distressed sale of a company not in the best health particularly with the CP court case still lingering

In the instance of scenarios 1 or 2 creditors could

1. Decide not to bother initiating a sale due to the low value and simply wait it out with Cine recovering and paying its debts plus interest

2. Use this as evidence do D4E as it would now be proven to be worthless

3. Compel a sale at a low price and take whatever it can get

Given the warning statements from Cine about major dilution/no recovery etc while others argue this is legal ass covering it could also be argued this reads as it reads - eg these action will lead to obliteration of shareholders

My reasons to remain optimistic

1. Mookys 20% might mean he is fighting for a better deal ?
2. Since this all went to **** To there has only been a 7.5% swing in ownership from institutional investors to retail - why have they not all rushed for the door or chalked this up as a loss?
3 Why did creditors bother agreeing the DIP financing 1.95bn - what made them convinced this was worth doing if ultimately they thought the business might be sold for a pittance and lose further good monies after bad

Just my musings no gospel truths here

@Willow..Think of it like a house repossession the bank that is owed money doesn’t care if the homeowner gets any equity when it puts the house up for auction - the repossessed house is sold for as much as to clear as much of the debt as possible - eg in this instance if after marketing Cine it was worth say 5bn then it would lead no 0 value in equity as only enough to cover debt owed

That’s my understanding as to why a sale of the business is likely to be bad for shareholders if creditors have control over determining how much it can be sold for

@AllKap - sounds good happy to round $8.6bn up to $9bn

I remain cautiously optimistic, but also realistic on the time horizon for recovery - amazon and others recognising cinema as part of their future strategies is very welcomed alongside the improving box office figures.

2023 is forecast at around 8.6bn with 2024 pegged as the year when the box office finally gets back to baseline eg 2019 or average of the previous 3 pandemic years - a long recovery ahead

So yes agree Bonkers that’s a heck of a lot of 10 minute checking for price changes with that kind of recovery timeline

I’m strapped in for the long haul - If our shares are still worth anything by that time and those distant dreams of £1 realised I can safely say any remaining long term holders will have well deserved profits off this.

@bullsbears - good observation there - one analogy would be seeing two ill people in hospital and automatically assuming the cause of their illness is the same just because they both happen to be ill - the diagnosis or cause is individual to them - could be related but also could be entirely different

To stretch the analogy further Cine is suffering a fracture from a fall (Covid) that is taking time to heal, whereas reading the background on Revlon looks more like a degenerative disease that has been caused over many years losing market share to new cosmetic brands

Hexam - perhaps people are typing too fast and accidentally strawman-ing each other - you said "It’s still a very big number for Avatar though which is good and though it may be lower than expectations it won’t make or break what happens in the Ch 11 which is far more important."

If you're argument above is C11 is more important then what Avatar does as the box office that is pretty obvious but that isn't the same as setting out a long list of films that have the potential (read potential) to continue to lead a big recovery at the box office and further address Cine's financial woes.

Domestic saw 4.4bn in 2021 and if it had been around the same again in 2022 I would be buying adult nappies for fear of the consequences as it would be a strong indication that cinema has found a new peak - the fact is we are seeing what is likely to be a $3bn uplift - not enough and not what Cine predicted either in their previous forecasts for various reasons

In terms of SP recovery if the C11 Judge can somehow force a reduced Cineplex award I think that would be a massive gain I still to this day do not know if there is a way of that happening (that doesnt involve shareholders being put out to dry also )- anyone with insight on the legals on that I would welcome a pivot to that discussion

Of course film releases matter. It is why we have gone from (US Domestic) 2bn in 2020, 4.4bn in 2021 to just under 7bn with a good few weeks and releases to go. So to say film releases do not matter it is all about C11 seems a bit of a odd argument as both are clearly linked - i.e. if the business is showing viable signs of profit and recovery and an ability to service its debts that provides argument to keep the business alive - ideally for us in its current legal status

The list of big films that came and went - yes on their own did very little but I don't think anyone is saying one film will save Cine - the slate for 2023 has demonstrably more films then previous years - that is just counting so more films overall plus more blockbusters should in theory continue to push the overall revenues closer to 2019 which is what everyone in the industry is predicting - a far cry from the "streaming killed cinema" narrative.

Whether the films are any good and therefore generate the revenues remains to be seen - whether Cine can hang on long enough to profit from the continued recovery is also one we are all watching with our negative holdings