Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
RS202 and from the same RNS..
“ This analysis does not take account of the fact that in the case of widespread site closures the films scheduled to be released during this period of closure could be moved to later in 2020. These downside scenarios are currently considered unlikely, however it is difficult to predict the overall outcome and impact of COVID-19 at this stage. Under the specific downside scenario, however, of the Group losing the equivalent of between two and three months' total revenue across the entire estate there is a risk of breaching the Group's financial covenants, unless a waiver agreement is reached with the required majority of lenders within the going concern period.
Only the specific downside scenario detailed above would indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The Consolidated Financial Statements do not include the adjustments that would result if the Group was unable to continue as a going concern.”
Now the situation is far worse than that demonstrated above and accordingly the covenants have already had to be re-negotiated.
Cineworlds admissions are going to be a far cry from those they were in Jan/Feb infact they are going to be a far cry from anything they have ever seen!
How does that fit with the model you are trying to push as positive RS?
Why will it gap up?
And you aren’t ramping?
indepthwins - it is like I said earlier, the rampers are the dangerous ones. If the shares collapse further which is what I see as a strong chance then why are they not touted as being the issue since it clearly shows they’ve already lost investors money on their “guess work” predictions.
Those posting about real concerns and valid points such as debt and the headwinds CINE are currently facing are “thrown in the bin” meanwhile those postings “it’s gonna fly high” with absolutely no factual evidence receive recommended posts.
Head buried in the sand.
IG technical target of 19.2p.
https://www.ig.com/uk/news-and-trade-ideas/cineworld-shares-could-return-to-march-low-of-19p--says-ig-analy-200804
The facts are all over the internet and near everybody (except a few disillusioned dreaming rampers) on this board would have you believe. There is zero counter argument and there is a reason it is one of the top shorted companies with those shorts increasing (not decreasing).
UK cinemas began reopening in July, but consumers are still reluctant to return. The months of screen time at home have perhaps taken the shine off paying to watch yet another screen, even if it is in a different location. Worries about hygiene, mask wearing and proximity to strangers are also off-putting.
Streaming services have undoubtedly become commonplace in recent years, and never more so since lockdown. Several of them are now opting to release straight to the small screen, foregoing the traditional cinema route, while other new releases have been postponed or cancelled completely. Disney opted to release its live-action version of Mulan straight to its streaming service Disney+ much to the dismay of British Cinema regulators.
Disney+ has in fact benefited from the pandemic, illustrating the stark difference between the corporate winners and losers of the unfortunate situation. Its timely launch in the UK, a day after lockdown began, led to many more subscribers than expected.
Cineworld’s acquisition anguish
Cineworld’s acquisition of Regal Entertainment two years ago set it up to be the second-largest cinema chain on the planet. It then set its sights on Cineplex, which excited shareholders and could have set up the Cineworld share price for a big boost as it would have brought it into first place as the world’s biggest cinema chain. Unfortunately, the pandemic panic snatched this dream away and Cineworld pulled out of the deal. On one hand, it was unlikely to be able to afford the acquisition, but now it has saddled itself with the threat of a lawsuit, as Cineplex states it had no right to withdraw.
In many ways, I think Cineworld’s ambition should be respected. It was taking a risk in attempting to corner the market. Had it pulled it off, shareholders would have been delighted. Unfortunately, it was not to be.
Cineworld, a £483m company, now has a debt liability approaching $4bn (it reports in dollars), not a figure to be taken lightly. It does have debt and credit facilities in place, but their repayment surely depends on visitors returning to screens as soon as possible.
AMC-Universal deal represents ‘paradigm shift’, says Morgan Stanley
The new deal between AMC Entertainment and Universal Pictures is the ‘crystallisation’ of the worst case scenario for Cineworld, according to a recent note from analysts at Morgan Stanley.
The US-based investment bank had previously calculated that the rise in PVOD platforms represents a potential 10% to 30% threat to EBITDA for Cineworld, with earnings likely to be hit even harder this year due to lower-than-expected revenue and profits for cinemas as a result of Covid-19.
Morgan Stanley admitted that other studios and movie theatres were likely to replicate deals similar to AMC Entertainment and Universal Pictures, ‘ending a decades old theatrical model’.
‘AMC is the largest US exhibitor, and it is hard to see this paradigm shift not being replicated by other studios and exhibitors such as Cineworld,’ Morgan Stanley added.
However, AMC Entertainment believes that its deal with Universal Pictures is a win-win situation that will help improve the profitability of both theatres and film studios.
‘We are participating in the entirety of the economics of the new structure, and because premium video on demand creates the added potential for increased movie studio profitability, which should in turn lead to the green-lighting of more theatrical movies,’ AMC Theatres CEO Adam Aron said.
Cineworld shares fall further than Morgan Stanley forecast
Analysts at Morgan Stanley clearly saw the writing was on the wall for Cineworld and its peers back on 1 June, downgrading it to ‘underweight’ and slashing its target price for the stock from 180p to 60p per share.
On 1 June, Cineworld was trading at 79p per share, with Morgan Stanley’s price target representing a potential downside of 24%.
However, the beleaguered cinema chain has seen its share price shed more than 50% of its value since then and looks capable of returning to March lows where it hit 21p per share.
Cineworld is trading at 38p at the time of publication, with the stock down 82% year-to-date.
https://www.ig.com/uk/news-and-trade-ideas/cineworld-shares-set-to-slump-after-amc-universal-deal-200731
Link below, I suggest people read pages 11, 12 and 13.
https://www.cineworldplc.com/sites/cineworld-plc/files/2020-03/preliminary-results-for-year-ended-31-december-2019.pdf
I also suggest the “consideration” made on the going concern basis and what scenarios were considered. Excluding the Cineplex points since the deal did not go ahead the COVID situation has played out worse than expected which resulted in the covenant waiver being structured since (as I said) these would have been breached.
“ The uncertainty as to the future impact on the Group of the recent COVID-19 outbreak has been considered as part of the Group’s adoption of the going concern basis. Thus far, we have not observed any material impact on our movie theatre admissions due to COVID-19. Following an increase in admissions in the first two months of the year against the same period in the previous year, we continue to see good levels of admissions in all our territories, despite the reported spread of COVID-19. Although the release of the new Bond movie has been postponed to November 2020 largely due to closure of cinemas in the Asian markets, the studios have advised us that in the countries in which we operate, they currently remain committed to their release schedule for the coming months and remainder of the year.
In the downside scenario analysis performed, the Board has considered the potential impact of the COVID-19 outbreak on the Group’s results. In preparing this analysis the following key assumptions were used: the impact of a total loss of revenue across the enlarged estate for between one and three months, no fixed costs reductions should sites be closed, run-rate combination benefits of c.$133m expected to be achieved as part of the Cineplex acquisition, forecast capital expenditure reduced in 2020 by 90%, and cessation of dividend payments from 1 July 2020. This analysis does not take account of the fact that in the case of widespread site closures the films scheduled to be released during this period of closure could be moved to later in 2020. These downside scenarios are currently considered unlikely, however it is difficult to predict the overall outcome and impact of COVID-19 at this stage. Under the specific downside scenario, however, of the Group losing the equivalent of between two and three months’ total
revenue across the entire estate there is a risk of breaching the Group’s financial covenants, unless a waiver agreement is reached with the required majority of lenders within the going concern period.
Only the specific downside scenario detailed above would indicate the existence of a material uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern. The Consolidated Financial Statements do not include
the adjustments that would result if the Group was unable to continue as a going concern.”
Hosai, or they share - bring their own and try and eat/sip with face masks on.
Brilliant.
Precisely shorterguy.
This is why I asked those to look at the operating costs, to seem stable and resume trading means absolutely nothing.
Costs will have increased and footfall will be reduced.
Add incentivised promoting such like odeon do, I.e bring a friend for free does not help it hinders
M00la there is a difference in securing further debt financing for an acquisition than for just day to day running costs.
Adding debt to service the mountain of debt they already have is NOT an option.
Nobody in their right might can continue doing that. Lenders have already pushed the covenants to an EBITDA to debt ratio of 9.0x.
Debt is already in junk bond territory and has been downgraded on the ratings board, who is going to continue doing that?
This is exactly what I am saying, they will want blood and it will be done via equity - that is where investors lose out.
M00la sure - list their other options for all to hear and to offer that balance.
freekick perhaps - but a simplistic approach, assume the following to balance your post.
Shares at 30p with 50% dilution leaves an end result of 15p.
Debt reduction and revenues resume, at 15p the company could return to 30p or evening 45p but that is 100-200% gain to the share price and the MCAP.
The level of dilution would be determined on appetite of the market, who knows.
Regardless there needs to be a huge uplift and turnaround for the level of debt sitting on CINEs books to be paid down.
Does somebody on the positive side (instead of posting silly comments) have any idea on the operating costs? All of which are also not going away even when opened, the reason I ask is even before debt servicing they will likely be running at a monthly loss.
M00la absolutely not, I will not be buying CINE since I stand by my views.
I don’t feel the company will go under I merely feel existing holders will be wiped out so why would I invest at any point or even want in lower?
Equally my views may make people sell at a loss and protect what remains of their investment but on the flip side constant bullish rubbish can see investors jump in to lose it all.
Balance is needed.
themuir my posts nor anyone’s here will have any bearing on the share price. This is not a micro cap. It is the institutions who move the market in CINEs case.
A bearish view is often welcome against a bullish so to offset the ridiculous posts of “big rise tomorrow” which is a finger in the air guess.
I am interested in the companies developments and I am entitled to post my views.
The post was to counter the argument of “the biggest holders and the board won’t dilute themselves at this low level”.
The debt and revenue structure (or lack of) is playing out in exactly the same way as CINE.
I am comparing the circumstances not the business sector.
RS202 one other thing, the results you commented on are for 2019.
2020 is where the focus is and your comments take zero effects of COVID into account.
Surely you know this before posting such comments?
M00la of course but similar scenario.
Over borrowed and no clear visibility on revenue streams.
Exactly the same - a recipe for disaster.
RS202.
Very simple to copy and paste extracts, I can quite easily find posts to counter your argument.
Look at what has now occurred, increased PPE and sanitary costings, face mask requirement, reduced visitor count to date, fear of second wave and now major films pulled from the screens until 2021.
Let us see who was right, I wouldn’t be so dismissive and open your eyes to reality.
M00la again absolutely no different to Hammerson.
When forced into a corner they don’t have much choice else the lenders call in their loans. Figure it out.