Blockbuster film delays prompt Cineworld warning

Edmund Heaphy
·Finance and news reporter
LONDON, -, UNITED KINGDOM - 2019/01/27: Cineworld brand logo seen in London, UK. (Photo by Keith Mayhew/SOPA Images/LightRocket via Getty Images)
A Cineworld theatre in London, UK. Photo: Keith Mayhew/SOPA Images/LightRocket via Getty Images

Cineworld (CINE.L) on Tuesday warned that full-year revenues would come in “slightly below” expectations, in part blaming the delayed release of some “highly anticipated” blockbuster films.

The group, which is one of the world’s largest cinema firms, had already flagged that box office performance in 2019 would be “slower” than the comparable period last year.

But it said on Tuesday that revenue would come in even lower than management had expected.

“As anticipated, the box office performance for the reported period was slower than the comparative period in 2018 reflecting the phasing of major releases and postponement of some highly anticipated movies to 2020,” Cineworld said.

Revenue from 1 January to 1 December fell 9.7%, Cineworld noted, with US revenue falling by almost 11%. This was mainly driven by a nearly 13% fall in box office revenues.

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Cineworld said that the second half of the year started “strongly”, following the release of The Lion King, the latest Spider-Man film, Joker, and, more recently, Frozen 2.

It also said that the upcoming Jumanji and Star Wars movies would “continue the recent positive box office trend”, but that it would not be enough to offset the weaker full-year box office figures.

“Despite the challenging backdrop, Cineworld has continued to execute well and our strategy of focusing on optimising customer experience remains unchanged,” said Mooky Greidinger, the CEO of Cineworld.

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“I am confident both about the future of the theatrical business as a whole and most importantly our ability to be a leader in it,” he said.

The company did not given any guidance on its upcoming financial year, other than noting it would make a further $40m in synergies as a result of its $3.6bn takeover of US chain Regal.

“Many investors appear braced for slate weakness in 2020 and we are also concerned by fewer obvious sequels, but note the flow through from Star Wars should lead to positive trading in early 2020,” said Barclays in a note.