Thursday 08 August 2019 5:36 pm

Cineworld sets hopes on The Lion King as first half revenue drops

Cineworld has posted a sharp drop in revenue for the first half, which it blamed on the unfavourable timings of major film releases.

The cinema chain reported revenue of $2.2bn (£1.8bn) in the six months to the end of June, down 11 per cent on the same period last year.

The FTSE 250 firm, which bought rival Regal in a $3.4bn mega-merger last year, also suffered a 13 per cent drop in pre-tax profit to £139.7m. Shares in Cineworld closed down just under 1.5 per cent.

Cineworld said the “softer” revenue was expected, due to major film releases in the comparative period last year, such as Black Panther and Avengers: Infinity War.

But the company said it has posted strong box office admissions in July, and is pinning its hopes on the success of hit Disney remake The Lion King.

“As expected, revenue was softer on a comparative basis for the first half of the year due to the difference in timing of major releases,” said chairman Anthony Bloom.

“We are pleased with the progress in achieving the synergies and costs savings in the US and anticipate achieving full year results in line with our expectations.”

Cineworld completed two sale and leaseback transactions on 35 US sites for a total of $556.3m, which the firm said was in line with its operating model.

The company also announced a one-off dividend of 20.27 cents per share, in a welcome move for investors.

“Cineworld posted a subdued set of first-half numbers, and it appears the costly decision to acquire Regal is still hanging over the group,” said David Madden, market analysts at CMC Markets.

“The group cited the poor timing of films for the figures, but that is the nature of the beast. Consumer spending in the UK has been fragile, and there is a perception the US economy will cool down, which doesn’t bode well for the group as the regions are the firm’s biggest money spinners.”

Main image credit: Getty