Cineworld beats piracy to have blockbuster year

Back in the 1980s, the local fleapit cinema looked to be in danger of going dark as the public turned their backs on the big screen in favour of video.

Nowadays the main threat is online piracy, which allows viewers to download the latest Hollywood film from an illegal site with just the click of a mouse.

Despite the rise of downloads, cinema is bouncing back. The industry is having a blockbuster 2015 as films as diverse as Fifty Shades of GreyJurassic World and Inside Out have helped to push admissions to the highest levels since the early 1970s.

The largest players are dashing to open more multiplexes and bijou arthouse cinemas to take advantage of the public’s renewed love affair with the silver screen.

That much was evident in Cineworld’s first-half results, which showed a 22.5 per cent jump in revenue to £329 million.

According to The Times, pre-tax profit more than trebled to £47 million, and the company, which has opened three multiplexes and one Picture-house cinema this year, raised its dividend by 32 per cent to 5p.

The sharp rise in results reflected a bounce back from 2014, which was a poor year for the box office due to a number of high-profile flops such as Pompeii. This year’s hits Minions and Avengers: Age of Ultron have offset the letdown of potential blockbusters such as Terminator: Genisys.

With new James BondStar Wars and Hunger Games movies all lined up for the second half, the sector is bracing itself for a strong finish to the year.

Cineworld, which is Britain’s largest cinema operator, said the strong turnout would mean it was “marginally” ahead of plan for the year, which was enough to send the shares 6 per cent higher. It added 32.5p to 581p.

Israel Greidinger, the deputy chief executive of Cineworld, said of the company’s outlook: “It all depends on the movies. We don’t produce them and you don’t know until the movie is out whether it will do well.”

Cineworld’s admissions increased 5.4 per cent in the first half of the year but its box office revenue rose 11 per cent.

Mr Greidinger said that the disparity was not due to price rises but to more people buying expensive tickets on weekends, for 3D films and more recently on 4DX — where audience members pay extra for a seat that rumbles and thrashes around while water and scents are sprayed at them to reflect what is taking place on the screen.

He also hit out at his competitors that charge an extra £1 to see a blockbuster. “The bad thing is not just the price but that you are identifying the weak movies,” he said.

The company made £50 million at the food and drink counter, with average retail spend per customer up 8 per cent to £2.02 in the period. Mr Greidinger said this reflected its partnership with companies such as Starbucks, which has set up coffee shops in the foyers of some Cineworld multiplexes.

Odeon, one of Cineworld’s biggest competitors, reported a pre-tax loss of £119 million for 2014 yesterday, with sales dropping to £683 million from £731 million. Paul Donovan, chief executive of Odeon, said the results reflected a poor box office last year and that its first half results had “shaped up pretty well”.

He insisted that the industry has shaken off the threat of piracy. “People understand it is more of a leisure experience. We are not competing with Netflix or mobile phones.”