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Research
Publication Date: 27 Jun 2019 - By Robert P. By Robert P.Equity Fundamental Equity UK Consumer
Cineworld, which recently acquired Regal Entertainment in the United States, is now the second largest theater operator in the world. The company has about 9,500 screens across roughly 800 sites. Cineworld gets 75% of revenue from the United States where Regal, AMC Theaters, and Cinemark operate in a dominant position. The second largest market is the UK and Ireland representing about 12% of revenues. The rest of the revenue comes from other countries in Eastern Europe and Israel.
Cineworld, even accounting for the recent special dividend, continued to fall as Vision Research finalized the report. However, Vision believes there is still downside and the disappointment of Toy Story 4's opening weekend could indicate the industry pressure highlighted in the report is already starting to have an impact. YTD box office revenue is down about (9%), despite the fact that for the first time since 1993 the average ticket price has fallen year-over-year.
Please download the full report for details on the Bear Case outlined below.
Bottom Line: Leveraged cinema operator facing intense competition and a changing industry from OTT products and Disney consolidation