Cinema group Cineworld blamed a weaker box office as the company said it expected trading for the full year to be below expectations.
Shares in Cineworld rose nearly two per cent in the morning’s trading.
Total group revenue fell by 9.7 per cent, with revenue losses in the US and UK divisions at 10.9 per cent and 9.7 per cent respectively.
Box office takings fell 12.8 per cent overall, which Cineworld said was due to postponement of some highly anticipated movies to 2020.
However the group added that integration benefits from the acquisition of Regal had been greater than expected, increasing from $150m (£115.8) to $190m.
The company also said that its unlimited membership programme, which launched in the US this year, was on track to reach higher levels than expected by the end of the year.
Why it’s interesting
The company said that despite a slow start to the year, the releases of “Spider-Man: Far from Home”, the record-breaking “Joker”, and “Frozen 2” had helped to reverse the trend.
With “Star Wars: The Rise of Skywalker” and “Jumanji: The Next Level” to be released in December, the company is hopeful that it will end 2019 on a high.
Michael Hewson, chief markets analyst at CMC Markets, said: “Takings for Frozen 2 saw a Thanksgiving record in the US, and as such Cineworld is likely to reap the benefits of that along with the latest Star Wars film which is also set to be another blockbuster.”
Russ Mould, investment director at AJ Bell, said:
“Expectations were already low for Cineworld’s earnings and so today’s mild profit warning doesn’t come as a major surprise.
“A lot of people have been betting on the share price falling, known as short selling, partially because of concerns around the company’s very large debt. A weak film slate will have also been behind the negative view as well.
“Big hits like Frozen 2 and The Joker aren’t enough to guarantee blockbuster sales for Cineworld. It needs a constant flow of popular films throughout the year and sadly 2019 hasn’t been a vintage period for the silver screen.”
What Cineworld said
Mooky Greidinger, Cineworld’s chief executive, said:
“Despite the challenging backdrop, Cineworld has continued to execute well and our strategy of focusing on optimising customer experience remains unchanged.
“There is an impressive selection of movies to come, which coupled with our extensive premium technology-led offering and exciting food and beverage offerings, will contribute strongly to our operating results and underpin our mission to be “the best place to watch a movie”.