Premium cinema group Everyman Media (EMAN:AIM) continued on its growth path after showing solid growth in the first half to 4 July 2019.
Revenues rose 16% to £28.9m and operating profit increased largely in line, up 14% to £1.6m, although investors have largely shrugged-off the figures, the share price nudging barely 1% higher to 184p.
With its share of the cinemas market at a record 3%, Everyman delivered across all of its key performance measures, including admissions up 9.4% to 1.5m, average spend on food and beverage 13.2% higher. Average ticket prices were flat although that's largely because of new cinema openings outside of London where pricing is lower.
Those openings included a new three-screen venue in Horsham and a four-screen cinema in Newcastle, taking the number of venues to 28 with 92 screens.
LONG RUNWAY AHEAD
The target is to open six to seven new sites a year and currently the company has committed to 15 venues to be opened by 2022.
Five new sites will be opened by the end of 2019, including London Broadgate, Manchester St Johns, Clitheroe, Wokingham and Cardiff.
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Management believes that in the long-run 100 venues is possible in the UK, while it also has international ambitions with plans to open a venue in Dublin.
The company uses strict financial criteria to ensure that each new venue is fully funded at the time of an agreement and meets a minimum financial return on investment of 20%, effectively a five-year payback.
BRAND DEVELOPMENT
The company’s marketing effort is focused on creating memorable events, so that an Everyman cinema is a venue in its own right, rather than being driven by film releases.
In the first half it hosted several events including the fifth annual Everyman film festival featuring high profile figures such as Danny Boyle and Alex Garland.
The current year’s film release schedule should provide a tail wind for the company with many family orientated films due to hit the screens, including Aladdin, Toy Story 4 and the Lion King.
