The public’s fascination with dinosaurs, cars and bondage helped cinema group Cineworld (CINE) post another set of forecast-beating interim results, leading to analyst upgrades across the board. Sales are up 11.3% to £329 million in the 26 weeks to 2 July, driven by growth in admissions of 5.4%, higher retail spend and a 7.9% increase in the average UK ticket price to £6.02.
Cineworld’s share price slipped in June following the departure of its well-liked finance director Philip Bowcock, but it has since recovered and is now trading at a record 558.5p, 71% higher than a year ago.
2015 has seen the strongest film slate for several years, with Jurassic World, Fast and Furious 7 and Fifty Shades of Grey all breaking box office records in the first half.
Films in the second half, which include the latest chapters in the Star Wars, James Bond and Hunger Games series, are expected to result in a stellar year for the £1.4 billion cap. Canaccord Genuity has increased its 2015 pre-tax profit forecast from £90 million to £95.1 million and has hiked its target price from 540p to 620p.
‘Cineworld has recovered from its recent share price wobble and is set for another surge in performance,’ says analyst Nigel Parson.
The group has outperformed since reaching a low in mid-October but its valuation remains attractive on a 2015 price to earnings ratio of 19.7.