CINEMA giant Cineworld has said it is considering a Wall Street listing in a move that would open up the potential to tap US investor cash as it posted debt of over $8.4 million.
It comes as the chain revealed the top performing movies of the year so far were Peter Rabbit 2, A Quiet Place Part II and The Conjuring: The Devil Made Me Do It grossed $49.4m.
It was significantly down on the $103.6m made by the biggest films in the first half of 2020, with movie studios holding back major releases until more clarity on the pandemic was known.
In the UK, Cineworld said the first six months of the year saw admissions hit just 2.6 million, down from 9.6 million in the same period in 2020, with box office sales down 61.9% to $30.2m, despite a hike in the average price of tickets of more than 40 per cent since screens reopened.
Announcing its results to the London Stock Exchange, the company said the average ticket price rise “was driven by a mix of customer behaviour and timing of film releases”.
It added that the decrease in admissions “was due to the impact of the temporary closure of our cinemas for significant periods” as well as the lack of major film releases.
It said plans are now under way for the possible US listing of all or part of business.
Shares rose more than 6% in early trading.
Cineworld said it gets the “substantial majority” of its revenues and profits from the US after the acquisition of Regal in 2018, and North America remains a key market for future growth.
“US equity capital markets are the largest and most liquid in the world and include a large number of publicly listed cinema companies including peer group companies,” Cineworld said.
“These companies are typically covered by a significant number of North American equity analysts with a wide domestic investor following.
“The board is therefore considering options to maximise shareholder value now and into the future by accessing this liquidity through a listing of Cineworld or a partial listing of Regal in the US.
“The board will evaluate these options over the coming months and will consult with shareholders in due course if any formal proposals are to be made.”
Globally, the chain said admissions in the six months to the end of June were 14.1 million, 70% down on the same period last year, which also included periods of closure due to Covid.
The firm said there was a “material uncertainty” around the company’s ability to continue if further lockdowns continued, with the potential to breach banking covenants on loans due next summer.
Total revenues in the first half dropped 49% to $292.8m compared with the same period a year ago.
However, pre-tax losses narrowed from $1.6 billion in the first half of 2020 to $576.4m in the current period.
Retail revenue from sales of popcorn and drinks also dropped 56.1% to $12.9m.
Harry Barnick, senior analyst at Third Bridge, said that “some estimates suggest that box office revenues will be 10% lower post-Covid permanently as customers have grown accustomed to watching films at home, studios have shortened the theatrical window and exhibitors have permanently closed the curtains on unprofitable cinemas”.
Julie Palmer, partner at insolvency expert Begbies Traynor, said “the pandemic has stalled the pipeline of many lower-budget films creating a dearth of range”.
Shares in Cineworld closed up 2.4p, or 3.92%, at 63.66p.