Cinemas operator Cineworld Group has bumped up its dividend by even more than its ticket prices after box office takings, rather than sales of overpriced sweets and fizzy drinks, drove earnings growth in the first half of 2012.
For the 26 week period ended June 28th, revenues were 1.1% higher after box office sales rose 4.1% from £113.9m to £118.6m year-on-year (y/y).
Retail sales dropped slightly from £28.8m to £38.0m, while income from other sources also fell, down from £10.9m to £8.8m y/y.
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Operating profit increased from £13.0m to £15.8m, with profit before tax significantly higher at £13.4m, compared to £6.9m for the same period the previous year. Basic earnings per share almost doubled from 3.6p to 6.9p.
The group's average ticket price grew by 4.9% to £5.15 (2011: £4.91). The interim dividend was increased by 5.6% to 3.8p from 3.6p last year.
Net debt was down slightly by £1.5m to £99.2m.
The timing of film releases during the second half means earnings are expected to be strongest in the final two months of the year. The firm said the line up of films gives it confidence that it will deliver growth in line with market expectations for the year.
Cineworld said: "The Box Office revenues were spread across a number of films in the period with the top ten highest grossing films accounting for approximately 40% of Cineworld's total box office. This was similar to the pattern last year. Film performance in the first half was underpinned by the phenomenal success of "Avengers Assemble", (grossing nationally in excess of £51m).
"The performance of 3D has been stabilising over the last 12 months. There were 15 3D film releases during the period, compared with 17 last year, representing approximately 15% of Cineworld's admissions for the first half, a little lower than the 17% in 2011. Film studios are becoming increasingly adept in discerning the genre and target audience of 3D films.
"Retail spend per person fell from £1.67 in the previous year to £1.65 during the period, partly due to the film mix, but also reflecting the difficult economic climate and its impact on consumer spending."
The firm added that its development pipeline for the coming years remains strong and is on track to open 25 cinemas by the end of 2017.
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