VUE, the private equity-backed cinema chain, is set to ramp up its expansion plans as Britons spend more on affordable luxuries in the economic downturn.
The chain, bought by Doughty Hanson in a £450m deal nearly 18 months ago, will open two sites this year and two next year as part of a development pipeline of 15 new cinemas, founder and chief executive Tim Richards told City A.M.
He said the group had experienced a “phenomenal” 12 months in the period to November 2011, despite a dip in profits.
Turnover fell 4.1 per cent to £291.97m and operating profit dipped 16.9 per cent to £30.98m, according to the accounts of Vue Entertainment Holdings (UK), which were published last week.
The results cover two spells of record snowfall in Britain, however, which hit receipts, as well as the end of a contract with advertising business Pearl & Dean. It also represents a comparison with 2009-10, which included the release of science fiction record breaker Avatar.
“If that weather had not impacted our business we would have had the biggest year ever,” Richards said.
In the accounts Vue’s directors write: “2012 is shaping up to be another good year, with a number of proven successful franchise titles on the slate. 2D releases include (James) Bond 23, Skyfall, Batman: The Dark Knight Rises and The Twilight Saga: Breaking Dawn – Part 2.”
At its year-end Vue had 71 sites, including one each in Ireland, Portugal and Taiwan. Its domestic cinemas include the nation’s highest-grossing complex at Westfield in Shepherd’s Bush, while its site at Westfield Stratford is among the top five in Britain.
Doughty Hanson agreed to buy Vue from Cavendish Square Partners, a joint venture between private equity group Coller Capital and Lloyds Banking Group, US hedge fund Och-Ziff and the management, in November 2010. The management re-invested at the time of the deal.
Doughty beat rival offers from BC Partners and the private equity arm of Canadian pension fund Ontario Municipal Employees Retirement System.