Member Info for RS2002

*90% of their money

Both Cineworld and rival operator, AMC have upped the price of admissions for CERTAIN movies.

The Batman had £1/$1 added and in the same form, Dr Strange MoM has done the same (when you compare like for like to other titles).

This is a subtle, intelligent way without raising prices across entire admissions.

We need to keep in mind, Cineworld have come to an agreement with studios, Warner Bros and Universal for a larger cut of theater tickets and potentially ancillary revenue from streaming after 45 days, thus the change from 90 to 45 days was something Mooky and the BoD have come to embrace. The fact that movies make 90% of their movies in the first 30 days and the remaining 10% over the rest of the earlier period has also played a part in that decision making.

Source: https://variety.com/2022/film/box-office/batman-amc-higher-ticket-prices-future-1235197362/

A reduced loss for the quarter (YoY) but ultimately guidance and forecast for return to profit at the end of this quarter (Q2) and expects to see 80-90% recovery of 2019 levels as the year progresses which is great.

€8bn cash position is also very healthy and doesn’t suggest any more capital raising.

I believe the market will like the news.

I should have added context that these markets have seen these losses since November 2021 (6 months) have wiped out so many gains.

Some useful data from CNBC and worthy of a read.

Have markets reached capitulation? Is the bottom here with upside to come?

For the S&P 500, it's a loss of $5 trillion. For the higher-risk Nasdaq, the drop peeled off about $7 trillion of value, including many names also in the S&P 500. To put that in perspective, one of the largest fiscal stimulus programs in the nation's history – the CARES Act of 2020 – engineered to save the country, was roughly $2 trillion.

The loss the Nasdaq has witness since a November is 1/3 the US GDP for 2021.

The reason I post this is wider global markets have suffered and Cineworld is by no means singled out as a stock down.

Source: https://www.cnbc.com/2022/05/04/op-ed-stocks-have-been-a-horror-show-heres-how-to-tell-when-the-market-is-near-capitulation.html

Lohen the point I am making is this has intricacies which mean news doesn’t come within 24-48 hours on a strategy or resolution.

This doesn’t help day traders who want to dip and in and out and have to content with large spreads which makes such a trading strategy difficult to execute and I couldn’t care less as I’m holding a modest holding as a higher risk investment, which means I can wait this out.

*there

Traveldol that is an interesting article.

It is suggesting an escrow account of some sort.

Creditors (like POG) pay into an escrow.

The escrow holds funds and then the borrower has an option to take the funds with an intermediary or chose to delay taking payments until sanctions are relaxed.

I would like to see POG pay into such an escrow and then state the payments will remain their until legally allowed to be credited.

For now, many need to appreciate this is not a residential house being repossessed. It has complexities that will see a long drawn out arbitration that could take months/years to resolve.

2330 BST, tonight (Wednesday 04/05/22)

Source: https://youtu.be/r2GZHjFBhp4

Algo sells are now Mooky’s doing? I’ve heard it all now. You will be telling me Rolls Royce is going to 50p next, Metom :-)

The $213 convertible loan has a maturity of 2025. Do you know what the share price is expected to be at this point? If Mooky and co want their bonus it needs to be north of 180p. That will do nicely for many.

If you want to look at futures, you conveniently seem to be discarding any positives. It cannot be one sided when forecasting. The news that Q1 was slow is nothing new. AMC have cited much the same. The movie slate just wasn’t there. At the moment it is picking up and when Q2 finishes reporting it should demonstrate May and June at 80% of 2019 levels which will analysts and the market to assess the recovery.

It was posted earlier that cinemas make 40% of their income during the summer weeks, as we approach that and with an attractive proposition of movies Inc MCU, Top Gun, Nope, Jurassic Park and more it bodes well for admissions to catchup.

Many don’t expect to see 100% of 2019 recovered, if 80% can be achieved and an increae in concessions and advertisement revenue, it will do very well.

“We found that Cineworld’s small bag of popcorn had an eye-watering mark-up of 1500%.”

Apologies, I posted 10,000% earlier.

1,000-1500% is a fantastic return though.

Source: https://www.bbc.co.uk/programmes/articles/1ty0bQlZXsgTwbhFVCyzNl6/mark-ups-popcorn-and-parking

I would recommend you look at margins for concession.

The popcorn kernels return 10,000% profit.

The drinks are usually the syrup kind with added carbonated water.

The result? Low consumables and operating costs. High profit margins.

Boohoo has been plagued by supply chain and high returns and delivery costs.

Netflix is facing an existential crisis. Growth was artificially fuelled during covid and now pandemic measures have relaxed, many of those who profited like Wayfair, Adobe, Peloton and others are seeing a significant correction.

The demographics of cinema going also doesn’t lie.

I do agree that we can only speculate right now but I’m comfortably remaining put.

I was fortunate to buy at an earlier low price a year ago and sell for significant profit. This isn’t my first rodeo…

Have a safe journey, Mountainous and we appreciate your time and effort going there to feedback here.

I personally don’t see the risk.

1. The U.K. hosts 102 of the 751 cinemas (13.5%).

2. Whilst the U.K. may be facing a living cost squeeze, the majority of the cinemas operating in the US (75%) are not.

3. Cinema ticket prices remain flat

4. Fandango the leading ticket broker site in the US did a survey and revealed:

i) 83% of those will be going to watch at least 3 movies this summer in cinemas
ii) 99% are happy with the experience
iii) 89% said their favourite out of home experience is going to the cinema
iv) 93% buy popcorn and soda at the cinema

5. The peak demographics are 15-24 year olds, as posted before, they are a demographic with disposable income. They mostly live with their parents rent free and their only outgoings are clothing, leisure and food which means they are Cineworld’s ideal demographic during a downturn in the economy.

6. Staycations will encourage local activities in the US and U.K. Cineworld will form part of that.

7. Your argument concessions are expensive is not true. We know Cineworld have profit margins of 10,000% on popcorn but consumers will spend it. For the U.K. (because the US is not witnessing such a living squeeze), Cineworld offer family ticket deal for £23 for a family of 4. For these Family Ticket holders a concession deal exists, a Family Special includes 2 x Munchboxes, 1 x Regular Popcorn & 2 x Regular Soft Drink for only £13.90. That’s a saving of over 30%. Total spend for family of 4: £ 36.90. Per head £9.22. Spend £1 more and go large.

Question, what other outdoor activity meets this cost of <£10/head? Theme park tickets? Considerably more expensive when you factor food, drink and the time to travel to them. They are also outdoors where you are at the mercy of the elements. Too hot/sunny or raining.

I appreciate your opinion and thought process but I don’t see the risk for 13.5% of Cineworld’s estate.

What do you recommend investing in Bzohdan?

I am also invested in Rolls Royce btw and I considered 102p a good entry.

Virtually all equities are hurting because of wider macro issues. Conflict, supply chain, increased energy costs. Whilst Cineworld is working to recover admissions and we will await next earnings, we need to keep in mind:

1. There are no conflicts in territories it has its cinemas.

2. The supply chain crisis, global semiconductor shortage doesn’t impact them as they receive their movies digitally and their concessions have low costs (popcorn kernels, soft drinks) and high profit margins.

3. Cinema chains have received strong support from studios and they have committed to theatrical first in the wake of Netflix showing streaming churn and high subscription loss. Predicted 2 million more customers going by the end of June.

4. Target a peak demographic with disposable income who don’t have the burden of mortgage costs, school fees and will be out during summer when the majority of big budget movies will play.

I do agree that it is futile looking at charts and real value will be achieved once admissions is accounted for and the backdrop of geopolitical issues are resolved.

Was this posted by a BOT engine?

1. Regal was acquired 2017 by Cineworld taking on $3.6 billion (pre-IFRS 16) debt

2. Between 2017-2020, Cineworld reported profit and positive cash flow with a 3.4 ND/EBITDA ratio. Which was very low (under 5 is considered good) and was used to support covenant testing by lenders to install confidence that they were in a good place to pay back their debt.

3. Contrary to deluded posters with an agenda, Mooky was NOT responsible for Covid or the pandemic. He did not ask for governments to mandate the shutdown of all non essential business.

4. Net debt (pre-IRFS 16) now stands at $5bn. ~70% of the current debt was from 2017 pre covid when Regal was acquired. The comment from squib claims pre-IRFS $3.6bn debt then jumps ahead to new tax reporting which factors FUTURE operating leases and costs to post-IRFS 16 debt levels of $8.9bn. How utterly illogical and deceptive to use two different accounting formats to construed a significantly higher debt level. The reality is debt has gone up but by ~30%.

5. Mooky holds 20% of the companies shares and if he wants a bonus scheme that awards him a big reward when the share price eventually returns to 180p, as a legitimate shareholder he has my personal backing. Investors have a choice to remain for 180p and see Mooky handed a bonus and in turn see their entry of 30-32p 5-6x in the process.

The U.K. needs to witness two negative quarters of growth before it enters recession.

So far February has shown 0.1% growth, under 0.3% that was forecast but still positive.

Right now, I don’t think a U.K. recession will come until September if the trajectory shifts. By this time I will have expected the summer movie period to have completed and Cineworld to have reported positive cash flow during the busiest months.

The US saw a 3.5% drop at the start of this year but are claiming to see strong growth. Let us see if the FED decision helps to drive down costs and alleviate spiralling costs in construction and manufacturing.

Cinemas have traditionally faired well during recession. As was witness between 2008-2010. Attendance remained up whilst other luxuries declined.

Cineworld are not on a tracker or variable interest rate.

If the FED hike interest rates it will go somewhat to address inflation which many believe is 10% not 7% currently advertised.