Monday, September 29th14.4°C
22738
22455

Cineplex Q4 profit falls despite higher revenue, misses estimates

TORONTO - Cineplex Inc. (TSX:CGX) turned in mixed financial results in the fourth quarter, with the national theatre chain's revenue up significantly but earnings falling short of estimates due to higher expenses.

The quarter ended a year of growth for Cineplex, which bought most of the Empire theatre chain to expand into Atlantic Canada, as well as indoor sign operator EK3 Technologies, now called Cineplex Digital Network.

"During 2013 we executed two significant strategic acquisitions and implemented a number of key initiatives in our existing and emerging businesses," Cineplex president and CEO Ellis Jacob said in a statement.

"These actions have resulted in meaningful new opportunities to drive growth in 2014 and beyond."

Among the initiatives for Cineplex: more VIP theatres that include amenities such as alcoholic beverages, Bollywood movies from India, and a digital signage collaboration with Tim Hortons (TSX:THI).

"The in-restaurant television channel will show Tim Hortons content in a creative, informative and entertaining way in more than 2,200 existing restaurants in Canada," Jacobs told analysts in a conference call.

"Cineplex Media will sell advertising for the network, which provides our media sales force with yet another national out-of-home advertising option for clients."

Still, rising expenses and other factors combined to produce a fourth-quarter profit for Cineplex that was down from the comparable period of 2012 and below the estimates of analysts as compiled by Thomson Reuters.

Cineplex earned $20.2 million for the quarter, or 32 cents per diluted share, down from $32.7 million, or 52 cents per diluted share, a year ago.

The average analyst estimate had been for a profit of 48 cents per share.

The company's expenses for film, concessions, depreciation and amortization, interest and other costs were higher. Cineplex's adjusted earnings were also reduced by a higher payout under its long-term incentive program, in response to the company's higher stock price.

On the other hand, revenue for the last three months of 2013 rose 8.2 per cent from a year before to $323.2 million.

Box office revenue totalled $177.6 million, or $9.42 per patron, up 2.6 per cent from a year earlier, while sales of snacks and other concessions totalled $93.3 million, or $4.94 per patron, up 6.2 per cent.

Revenue from other sources such as media, a small but growing part of Cineplex's business, totalled $52.2 million, up 25 per cent.

The company's stock gained about 38 per cent last year, ending 2013 at $44.06. Its shares closed Monday at $41.50 but fell about three per cent in early trading after the financial results were released.

Jacobs told analysts that stormy weather in December did have an impact on attendance and that acquisitions added one-time costs, but he stressed that a bigger factor was a relatively weak film lineup.

"This year was impacted by certain movies that basically did a lot of money in the U.S. but did not perform the same way in Canada," Jacobs said.

"Best Man Holiday," a Tyler Perry Christmas movie, and "Saving Mr. Banks" were among those that didn't fare well in Canada, especially compared with the successful James Bond movie "Skyfall" in 2012.

Similarly, he said this year's Oscar-nominated moves "American Hustle" and "Twelve Years a Slave" didn't perform as well as "Argo," "Life of Pi" and "Silver Linings Playbook" a year earlier.

"Our whole focus, moving forward, is to become less dependent on Hollywood product, which is why we look at diversifying away into the digital signage business, alternative programming . . . to offset the weaker slate (of Hollywood films)."

Another new source of revenue involves Scotiabank (TSX:BNS), which has naming rights for some of Cineplex's theatres, higher-priced menu items and a stand-alone frozen yogurt location.

Cineplex announced last week that Scotiabank would be the presenting sponsor of its Cineplex VIP Cinemas, which feature specially designed auditoriums for adults, licensed lounges and other amenities for a higher price.

Some of Cineplex's locations have also been branded as Scotiabank Theatres, including three additions announced last week for Saskatoon, Halifax and St. John's, N.L.

The Canadian Press


Read more Business News

22625


Recent Trending




Today's Market
S&P TSX14976.92-49.85
S&P CDNX912.76-6.66
DJIA17071.22-41.93
Nasdaq4505.853-6.341
S&P 5001977.80-5.05
CDN Dollar0.8969+0.0011
Gold1217.80-1.00
Oil92.81+0.03
Lumber334.30+5.40
Natural Gas4.138-0.016

 
Okanagan Companies
Pacific Safety0.135-0.02
Knighthawk0.01-0.005
QHR Technologies Inc1.23+0.01
Cantex0.09+0.03
Anavex Life Sciences0.185-0.01
Metalex Ventures0.0550.00
Russel Metals34.49-0.54
Copper Mountain Mining2.52+0.11
Colorado Resources0.150.00
ReliaBrand Inc0.020.00
Sunrise Resources Ltd0.065+0.045
Mission Ready Services0.34-0.02

 



22625

FEATURED Property
195161523 1925 Baron Road
3 bedrooms 1 baths
$59,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Power-save your way to a down payment

Part 2 of 2 to read Part 1, click here. 5. Dial down your vacations. New York is out. Maybe Buffalo. For West coast, maybe Seattle instead of Hawaii. Use sites like Airbnb (aribnb.ca) to find ch...


A wildly successful manufacturer

Niche food producer “Sweets from the Earth” thrives using innovation, uniqueness and an unwavering focus on quality. A neighbour’s stew turned Ilana Kadonoff off meat at the age of s...


Finding the smart money

Recently I had the privilege of working alongside André Voskuil, a local guru in the world of Alternative Financing. André has quite the reputation in the world of direct investments as ...

_



23499




Member of BC Press Council


22814