Member Info for mountainous

Derampers already arrive bright and early to discourage you. Read the report and judge for yourself, don’t let someone else play with your perspective

Don2003 - just because cineworld took on more debt doesn’t mean that we will instantly reap the rewards of what they used that debt for. When you acquire a company, you have to come up with a great price to please it’s shareholders, that’s how you get it approved. Cineworld paid a large premium for Regal, so it will take time before the deal pays itself off and cineworld actually begins to make real money from it (in the form of paying off the debt they got from Regal using the increased revenue). People on the bb like to have ‘realistic expectations’, so is it realistic to believe that the Regal acquisition will instantly yield cineworld enough money to pay off the debt they took out to buy it??? Regal has only had about 2 years of normal trading so far since their acquisition.

Regal is the second largest cinema chain in the US, which was a massive undertaking for cineworld. The fact that they decided to take that up means that the company was in a solid financial position to start with imo. All well and good having tons and tons of cash from profit, but it means nothing if you don’t use it to expand your business.

In addition to that, cineworld refurbished cinemas and made improvements to their screens, particularly during the pandemic.

It’s also worth remembering that shortly before the pandemic, the Cineplex acquisition was on the cards, which would have made cineworld the largest cinema chain in the world. Cineworld would have, of course, taken some more debt out so they could finance that acquisition. Combine this with Regal and you begin to see how the debt has accumulated.

100% agree that losses will remain FunInvestor, and that it will take some time before we return to normal.

Let’s see what happens tomorrow, I’m not expecting a full recovery to be announced but at least some kind of improvement would be fantastic.

Hi Bonkers, thanks for your reply.

By the word ‘bumper’ I was suggesting that we are going to see a report that is hefty and large, with lots of news coming out both in the report itself and the following conference call.

I fully agree with you that tomorrow’s results will be impeded by the closures we had for Q1 of this year, and therefore the results will have taken a big hit. It is probably too early to talk about H2 2021, but I am very optimistic for that as long as nothing out of the ordinary happens.

With regard to your comments about the recent debt facility announcement, I’d suggest you go and read AMC’s report and go to the section about cash and liquidity. AMC has raised about $1.3B in additional liquidity this quarter. They do not need that much money by any stretch of the imagination when virtually all of their cinemas are open and their attendance and income is improving. So why did they do it? Probably because they had the opportunity to do so and they took it to cover themselves. Because AMC stock has gone up so much this year, AMC has banked the opportunity to finance themselves heavily via their equity. Similar to cineworld, they have also had a chance to finance themselves, not through equity but rather their highly understanding borrowers. The end result is that they are both trying to cover themselves because we don’t know what the future holds. If cineworld really needed this money on the spot, suggesting that something else is going on behind the scenes, this would not be the sort of loan that they would go for.

Hope this answers your questions.

Basing this from Cinemark’s and AMC’s recent earnings report, I think CINE is in a very good position right now. I’m very optimistic that Mooky is going to highlight this to the max tomorrow. Very limited communication coming from the company, which makes me think that they’ve left everything for these results so we have a bumper report tomorrow.

I don’t think there’s any chance for another lockdown in the winter. One thing that Boris has been able to make his mind up on is the need to get on with our country’s recovery and it’s return to normality. We have the vaccine, quick access to tests and now boosters are en route too. If we still need another lockdown after all of that, I don’t see what else we can do to better the situation.

One thing I would like to highlight is just how strong Cinemark’s and AMC’s domestic (US) segment has done. Both companies have reported a massive increase in attendance, concessionary spending and admission revenues. Regal Cinemas, Cineworld’s US subsidiary, is right in between them in terms of market share, so cineworld absolutely must have benefitted from the increase in demand too.

In Mooky we trust, everything is going to be ok in the long run imo. Very large film slate ahead of us, I heard that 2 years worth of movies are coming out in a space of 18 months. Once Cineplex is out of the way and we enter winter without another lockdown (hopefully), I think that the outlook of this company will become much clearer and sentiment will improve drastically by the end of this year.

Have yourselves a pleasant day :)

Not related to cineworld directly, but just seen that Cinemark has nearly 30% of its float short.

Suddenly, 7.7% short interest on cineworld doesn’t seem like that big of an issue lol

Thanks for your comments Rick.

I definitely think so CapitalistPig, bear in mind that AMC also owns Odeon in the UK, so I think it will be an even more accurate representation of cineworld compared to cinemark last week.

Yes, AMC is reporting today after market close. We can expect the results sometime after 9pm tonight.

I remember seeing the drops happen day after day after day and wondering where the end would be. That turned out to be about 57-58, and we bounced back to 60s.

I remember that essentially nobody on this bb knew what was going on, and there was no real news to justify the drop. I’m still very confident in the stock, and I feel like this price is incredibly undervalued, however ever since that large drop, we haven’t surpassed 70p, something that we were constantly trading above at since March before the drop.

So my question is, why do people think it happened? Do you think some institutional investors found out about the $200M loan facility before us and didn’t find the situation palatable? Something must have happened for a drop like that to occur, surely?

PrettyWild - spot on. Nobody expected anything close to 2019 levels from the results and it’s the same thing for cineworld. What matters from the results is that we’re seeing a recovery, that news is sufficient to spur up my confidence in the industry, especially in cineworld.

Had a read of their press release and it looks very solid. Net loss is down, and pretty much ever figure is up. Attendance figures up, concessionary income up, total revenue up.

Looks very good indeed, looking forward to cineworld’s.

bullbears - Cinemark, another US cinema chain is also announcing this Friday, so that might be another one to look out for :)

In my honest opinion, streaming will remain inferior to cinemas as a means of revenue generation. As the technology evolves to allow online streaming, the technology to pirate also evolves, as we have seen with BW and JC.

At the end of the day, movie studios (and their actors) care about the money. Yes, they can try and push their streaming platform, but realistically it will never be pirate-proof, and they realise that. I also fail to see how they can realistically become profitable, when the possibility of sharing passwords and multiple people watching on the same account exists.

Box office figures are already recovering well and are reaching pre-pandemic levels. As someone (I think it was bullsbears) said, how are cinemas dying if the box office is recovering like that?

Nice to hear about the great facilities in your house, however not everyone has them, and for others the cinema is the best place to watch a movie. The general public, through the box office figures, appears to share the same sentiment.

This is just a reminder that H1 Earnings on the 12th will include the financial info for January-June only. H2 will cover July-December. Since we only opened the cinemas in April and May, I fear that the true uptake in demand for cinemas that we’ve seen with good films so far such as Black Widow won’t be reflected in the upcoming results.

H2 will give us a much better indication of how they company is recovering, assuming no lockdowns or new restrictions. H1 earnings will unfortunately reflect the impact of us being closed for 50% of the reporting period.

In addition to that, if the company structures this report in the way that they compare H1 2021 to H1 2020, it might actually look like the company is in a worse position that it was this time last year, which is not the case imo. I am considering that cineworld was operating at full for 50% of H1 2020, so of course their results for H1 of 2020 will be better than H1 of this year.

Hence, I would like to encourage everyone to prepare for that. Sorry, this is a bit of a deviation from the normal optimistic outlook of this forum, but I think it’s good to inform people of that possibility. If it helps, it will probably be more accurate to compare H1 2021 to H2 2020, as the lockdowns were October/November-April.

All the best, this is not intended to spread FUD in anyway, I just wanted people to be aware of how the report might look and to not judge the report based on its face value :)

Nice to see the Baskin Robbins inside one of my nearest cineworld’s open again (not too sure if they’ve been opened for a while), I remember that they were closed for weeks when the cinemas first reopened.

Must mean concessionary income is flying considering that Baskin Robbins have decided to ship in their product and staff to the cinemas, they wouldn’t have done that if the income from it was poor imo.

News outlets are now completely silent about the good news as the cases go down, just goes to show that the news will print anything that is intended to raise concerns and eyebrows. Not seen a single news article outlining just how positive this info is…

Thanks for your replies bonkers and FI. I think 150p in 2022 is realistic as well.

Hope you enjoy the movie FI, pls let us know how you find it because I was thinking to watch it sometime as well lol

With regard to the replies from Bonkers and FI, I retain my opinion that if the company had started to run low on cash reserves from previous lending, that the company would have sought a solid payout loan from its lenders, and not an incremental one as has occurred today.

In terms of what Bonkers has said, it’s anyone’s guess why the debt facility has been brought in. However the company’s base case scenario has pretty much been met as announced, with just about a month difference (if I’m not mistaken), so I don’t see where the sudden demand for $200M comes from. Your hypothesis may be true, my hypothesis may be true, or we may both be wrong. 12th August will provide us with more insight. However your comments are insightful and it’s good to see both sides of the bar. I agree with you that 150p by September is unrealistically optimistic, however I do believe that we can get to 150p at some point.

FunInvestor, I also appreciate your comments, however I’m still unable to fully wrap my head around your theory regarding the higher interest rates and how you’ve inferred it. Similar to the prior paragraph, we’ll find out more on the 12th though, and hopefully that clears the air a bit.

Thank you both for your comments, have yourselves a pleasant weekend and gl on your trading endeavours.

Your comparison regarding your use of a loan vs cineworld’s use is unreasonable and disproportionate. This isn’t a standard loan that Mooky and his pals went down to the bank for the fun of. It is an incremental facility. You can dip into it when you need it. It is more of a credit card rather than a full on loan. It may well be that he uses £50M out of it only. It may even be the case that he doesn’t need it at all, it’s simply additional liquidity that is there and ready to be utilised if required.

As he stated in the RNS, they are constantly monitoring how the virus is moving. Having seen that the US isn’t doing too well with their numbers, and given the uncertainty in the UK regarding COVID from the government, it is only natural for one to want to put safeguards in place to protect the company. If we see another situation which requires a lockdown in Q3 or Q4, then the great slate of films will likely be postponed or the UK/US may not be open when the great movies in question premiere/ may be moved to streaming etc, and cineworld will not benefit from it. That wouldn’t be great for the company, however imo we now have a safety net for that situation.

If this $200M was a straight up conventional loan, then I think it would be reasonable to consider your point of view. If the company was in deep trouble like that, I don’t think they would have gone with an incremental loan facility like this. All imo.