Cineworld gains from Empire acquisitions, hikes dividend
Cineworld’s revenue grew in 2016 as it made several acquisitions of Empire cinemas, including the iconic Empire Leicester Square, and the cinema operator hiked its dividend 8.6%.
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Revenue increased 13% in 2016 to £797.8m, or 8.7% on a constant currency basis, compared to the previous year, as Cineworld reached over 100m customers.
This included 6% growth in the UK and Ireland and 26.6% growth in the rest of the world, or 13.3% in constant currency, with record performances in Poland, Romania, Hungary and the Czech Republic.
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 13.2%, or 8.4% on a constant currency basis to £175.8m, while adjusted pre-tax profit increased 12.5% to £111.4m and adjusted diluted earnings per share grew 16.8% to 34.7p.
The FTSE 250 company declared a final dividend of 13.8p making the total dividend for the year 19p, up 8.6%.
Cineworld generated net cash from operating activities of £150.1m, down from £165.9m), while net debt increased to £282.3m from £245.2m due to several acquisitions with the EBITDA to net debt ratio remaining at 1.6 times.
Last year, Cineworld bought fiver Empire cinemas containing 64 screens, including Empire Leicester Square, and opened four new sites in the UK and four in the rest of the world, which added 78 screens, bringing the total to 2,115.
Chairman Tony Bloom said: “The future looks bright and I look forward to 2017 with confidence. There is a strong film release programme planned for the year, we have an excellent estate which will continue to grow, with a further 13 cinemas due to open, and a number of major refurbishments are planned.
“Importantly we have a strong balance sheet and can undertake our strategic objectives without financial strain. We are at the forefront of providing the latest technology to our customers and most of all we have an outstanding management team with extensive experience.”
Analysts at N+1 Singer said that a 16.8% growth in earnings per share was a great result in a quiet year for film releases.
"The driver of the growth was the ex-UK business which we believe illustrates the strength of their business model. Not a lot of information on how 2017 has started but they do say that they look forward to the year with confidence with a strong film slate as we have previously highlighted."