Cineworld shares jump 14% as audiences flood back and revenues bounce to 90% of pre-Covid levels
- Box office and concessions revenues jumped to 90% of 2019 levels in October
- Cineworld’s UK and Ireland business was at 127% of 2019 levels during the month
- The firm was buoyed by the release new blockbusters like Venom and Dune
Cineworld shares jumped 14 per cent higher in early trading on Monday, after it revealed box office and concessions revenues jumped to 90 per cent of 2019 levels in October.
The cinema operator said that was up from 60 per cent in the previous month, sending investors flocking to snap up shares that are still trading at a fraction of pre-Covid levels and have been heevily shorted.
But the firm’s UK and Ireland business was at 127 per cent of 2019 levels in October, as the British and Irish public flocked back to the cinema to see new blockbusters like James Bond’s No Time to Die, Venom and Dune.
Cineworld’s performance and attendances ‘have steadily grown’ since its venues were able to reopen in April, and the firm told investors on Monday it was upbeat about the outlook in the months ahead amid the arrival of hotly-anticipated film releases.
Dune, featuring Timothee Chalamet (right) and Zendaya (left), was among the recent blockbusters that bolstered Cineworld in October
It expects to be further boosted by the upcoming release of Ghostbusters: Afterlife, Spider-Man: No Way Home and The Matrix Resurrections, among others, which it anticipates ‘will perform very well subject to there being no deterioration in the Covid-19 situation.’
Cineworld, the second largest cinema exhibitor in the world, was badly affected by the pandemic and the forced closure of its cinemas for much of the time since March 2019.
Following the ‘period of unprecedented disruption in our industry and the world at large’, Cineworld’s share price remains around 80 per cent off its pre-Covid heights.
Cineworld is the UK’s most shorted stock, according to Financial Conduct Authority disclosures, with hedge funds betting against Cineworld representing 7.9 per cent of its stock.
New Holland Capital and Whitebox Advisers hold the largest short positions, representing 2.4 per cent and 1.7 per cent of Cineworld shares, respectively.
But Cineworld hailed October as ‘an important milestone in the company’s recovery’ as revenues grew and cost measures were implemented, allowing it to generate positive cash flow for the month.
The funds with the largest short positions in Cineworld
Revenues were at 80 per cent of 2019 levels in the US and 84 per cent for the rest of the world.
CEO of Cineworld Mooky Greidinger said: ‘Our partnerships with the studios are as strong as ever and with the incredible movie slate to come, there are real grounds for optimism in our industry.
‘I would especially highlight the great performances we saw from our newly refurbished cinemas in the US. These new cinemas clearly support our strategy to enhance the cinema experience for all our customers.
‘Whilst there are challenges ahead, I believe these efforts have positioned us for great success in the future and we are all looking forward to continuing to welcome our customers to the best place to watch a movie.’