BENGALURU – Cineworld Group reported an 11.6 percent rise in revenue year to date on Thursday but its failure to raise its outlook disappointed some analysts and shares in the cinema operator fell 7 percent.
Action movies such as “Black Panther” and “Avengers: Infinity War” boosted revenues, and European markets saw an uplift in the second half, driven by films including “Mamma Mia! Here We Go Again”, “Incredibles 2” and “Bohemian Rhapsody” in the UK.
Despite the 11.6 percent sales rise however, London-listed Cineworld said it would deliver a performance in line with its current expectations for the year.
The company said its plans for US cinema chain Regal, which it bought for $3.6 billion (R51bn) earlier this year, were progressing well and it was continuing to review further opportunities for integration benefits.
“I think on the whole the market was expecting a synergy upgrade or at least a consensus upgrade today. Those are the two reasons probably why the shares are down,” said Investec analyst Alistair Ross, who rates Cineworld a “buy”.
Revenue in the UK and Ireland rose just 2.1 percent in the period, compared with a 5.9 percent jump this time last year.
“For this year, these factors (strong US and Regal) outweigh the impact of the UK and mainland Europe trading slightly behind as well as a rising cost of debt,” said Peel Hunt analysts.Reuters