Member Info for mountainous

Good morning all.

I partially agree with the statement that Mooky has not been doing well.

On one hand, this is the same guy who led CINE (which was highly leveraged following multiple acquisitions) out of the pandemic still alive. I genuinely don’t think that many CEOs would have managed to do that. They got the company through it (albeit by the skin of it’s teeth).

However, I agree that the communication has been extremely unsatisfactory. We have not heard anything at all so far. We have lost another court case with a landlord and it was posters on this bb that uncovered it for us.

Mooky needs to up the communication. He needs to talk with Investor Relations and say to them ‘we need more information out to investors’. It really is that simple. On days like this where the sp is down in excess of 7% how can he think that investors are just sitting there all happy?

At the AGM, there was definitely an aura of togetherness when I spoke to Mooky. I just wish that it would translate into more information being relayed to investors. Other than that, I am not unhappy with the performance of the CEO himself.

@LTHcine, sorry to hear that you believe that the idea to temporarily sell off and then re-enter after the RCF announcement is idiotic.

The way I see it is that there are 3 potential scenarios:
1. CINE pays down the RCF sufficiently and avoids the covenant test.
2. CINE doesn’t pay the RCF sufficiently and is subject to the covenant test (which I think we agree that they would not pass). They seek a waiver. They are successful in doing so.
3. CINE doesn’t pay the RCF sufficiently and is subject to the covenant test. They seek the waiver and are unsuccessful in doing so.

So now, which of those three scenarios would yield a substantial rise in the sp? In my opinion, none of them. Even if CINE is able to pay down the RCF, Cineplex still exists and is a problem for us, which continues to inhibit the increase in sp that CINE deserves.

However, which of those three scenarios would yield a negative impact on the sp? Well, I think we can agree that if CINE defaults on the covenant test and is unsuccessful in obtaining a waiver then they are finished. I do not need to describe what would happen to the sp.

If CINE seeks the waiver and is successful, then great. But once again, it would make no difference to the sp imo.

The chances of CINE going bust is low imo, especially now that money is flowing. I think it is almost a certainty that CINE would be able to get the waiver if they need it, but let us be honest here that if the lender responsible for the RCF decides to pull the plug for everyone, then they can do it if they wish.

Once again, I think that the chances of this is low. My point is that I think by staying in CINE now, there is very little upside to see in the near future. My guess for the next big catalyst is the completion of the appeal, which is due by the end of the year.

Nevertheless, I think I will stay and perhaps not attempt to trade around the RCF announcement. I was simply pointing out that it is not a bad idea in my own opinion.

@Srini, that’s great. I’ll do it later on.

@Srini, I think it’s a decent idea.

If you wish you can send an email or I can?

@shazabo, any moment now. It is June.

It is possible that CINE might not even tell us if the RCF has been passed successfully or if we got a waiver. They couldn’t tell us they lost the landlord court case, so I don’t know what hope to have that they will tell us about the RCF.

@TommyD I think it’s a genuine question.

61.89% is still a bit off, it is possible that it could be enough if you include all of the concessionary income too. We will just have to wait and see.

To be honest, your idea of cashing out and then coming back in after the RCF announcement isn’t a bad idea at all. If CINE manages to pay it down sufficiently I don’t think it will affect the sp that much at all due to the court case still being on our heads, but if CINE doesn’t manage to pay it off and gets a waiver or even worse, doesn’t get a waiver, then that will certainly affect the sp negatively. So in a way, I don’t see any massively positive rise in the sp in the short term.

I will have a think as to whether I should temporarily sell off and wait until after the RCF is dealt with. I think there is a heck of a lot more to lose than gain there.

Just my opinion.

@BlueBuxton, it may shock you to find out that I’ve never watched Star Wars either lol

Prior to the pandemic, I didn’t go to cinemas as frequently as I do now :)

If/when the next one comes out, I’ll be first in line!

@RS, from memory, yesterday also had a lot of families in 4DX. CINE also have some great deals for families with children, in particular the munchbox is a good offer.

It makes the customer feel like they’re getting a good deal, and people are definitely taking it. Yesterday was a big mix from what I saw, some with nachos, some with popcorn, some with ICEEs etc etc

Good afternoon @BlueBuxton, great to hear from you.

To be very honest, this was my first ever Jurassic film. I loved it personally. The plot line was easy to follow and filled with suspense.

Considering it was my first, I went in with neutral expectations, and it blasted them out of the water.

Same here @Hussart, that should hopefully be what we get. The box office has been really great recently.

I went to watch Jurassic World yesterday in 4DX and the place was packed solid. Majority of people booked in advance, when I booked in person there were barely any decent seats remaining. Lots of people with snacks and drinks, CINE easily achieved several thousands of pounds just from that one screening.

@shazabo, that is what I would expect. Just had another look at the Annual Report and I’ve seen that it just says ‘June 2022’, it doesn’t specify a date for the RCF test.

So an RNS should be imminent. We are already halfway through June. I hope that as a result of the great box office as of late, perhaps we may have just scraped it.

@Danosaur most certainly, it is like Black Friday over in the US markets today.

@Hussart, this is not the case.

The court case is planned for mid-October from what I remember.

Definitely should be that H1 has been good though, maybe they need a bit of extra time to process all the zeros!

@D-G and @Heedless, you make a good point.

With EVE’s current cash balance, they could last another 6 months, or another 4 months, maybe another 2 months, we have no idea. It would depend on how much debt the business will be willing to take on. I was saying it more in the view of ‘if EVE has no choice left’. You are very correct in saying it could cripple the business, but as you say mood can chance quickly. It all depends on what happens. I can only assume that in a worst case scenario (no buyer comes forward and cash balance becomes critical), they would do a last ditch attempt and take on debt. If the company is going to go bankrupt, might as well try and give it a second shot and see if it works. It’s a PLC, so no personal liability for the directors in terms of debt unless if I am mistaken. And if it doesn’t recover (never becomes profitable and becomes crippled with debt), they would have been heading for bankruptcy from the start anyways.

However, my guess is that if EVE saw a financially suitable way of keeping the company going with some fresh debt, they would have done it. The fact that they have put the company up for sale shows desperation, either the banks have little hope that the business will reach profitability in the future or the BOD have sussed it out for themselves.

@BlueBuxton, doing fairly well thank you, hope you are doing good yourself.

Agreed about the popcorn, I usually go for the nachos.

@DGU and @D-G, I believe you are both very long-term holders.

In my opinion, EVE will not let the company go on the cheap. But in it’s current state it will not survive. In the RNS, there was zero mention of the cash currently available in hand. EVE were quick to mention the Belgian expansion, and the fact that they aren’t doing bad compared to the rest of the competition, but the reality is that if the cash balance was a good thing to talk about, it would be at the front and centre of that RNS. I don’t have a clue about how much is left, but I am almost certain that a high portion of it has been extinguished.

I think if a buyer is to come out, they will do so in the immediate future. Otherwise the state of the company will continue it deteriorate and eventually it will not be desirable to anyone at all. I think if worst comes to worst, EVE will go for debt. Rights issue is just not feasible at this current value.

Very sticky situation, but I think there is a way for EVE to make it out. It’s a narrow path, but a path nonetheless. Any investor who injects fresh capital into the company will not do it for free, they will need something in return. What that ‘something’ is remains a mystery.

Agreed. I also posted a few days back that EVE would not immediately put this up for sale like that.

Look at what happened with Casper, very lofty valuation but the direct-to-consumer model let them down. It is a high cost product to produce, and the 100 day trial also loses them money to an extent. A heck of a lot of these DTC companies have fallen flat.

In a way, EVE could be doing what is best for the company and us right now. I do genuinely believe that the Board sees no clear path to profitability from here on out, it has been several years and we have made no profit whatsoever. Not a dime.

Good morning @BlueBuxton, really great find here.

Definitely get a feeling of optimism from Mooky, doesn’t look concerned. With regard to popcorn, we will just have to wait and see.

Rest of the slate for the year looks fantastic, would not be surprised to see a fully cash flow positive H2 as long as the cost of living crisis doesn’t get too out of hand.

It also shows that the current position that EVE is in is serious. The fact that they have not yet disclosed how much money is in the account as of recent should concern us. My guess is that they have burnt through a lot of it by this point. Just 6 months ago they were telling us that the cash balance is sufficient for the year from memory.

A company like Simba or DFS or Emma etc have a lot to benefit from absorbing EVE as once undertaken, you achieve a good amount of cost synergies. You can get rid of EVE customer service and merge it with your own customer service, saving costs in the process. Same thing goes for manufacturing etc.

My concern is that, when a company is struggling the first option is never to put it up for sale. You would seek further funding from the banks, especially considering that EVE has close to no debt, now would be the time to take on some to survive. Is it the case that EVE has tried this, and have been unsuccessful in doing so?

First thing that comes to mind is that EVE management have simply given up. You don’t put a company up for sale in this current condition. In my opinion, they genuinely don’t see how this company can make a profit now or ever. Either too much expansion or the product has too high of a manufacturing cost and a low profit margin. Hence, no use in taking up debt if you won’t be able to pay it back in the future.