Blockbusters not enough to stave off cinemas’ losses

Box office receipts from the latest Batman and Avengers blockbusters were not enough to prevent a 37% drop in operating profits at cinema chain Irish Multiplex Cinemas last year.

New accounts filed by the Ireland-based cinema group show that operating profits dropped from €948,736 to €600,121 in the 12 months to the end of October last.

The figures lodged with the Companies Office show that the firm recorded a pre-tax loss of €5m after booking a €5.8m impairment charge on the firm’s properties.

The cinema chain recorded the decrease in profits after its gross profit declined by 10% from €3m to €2.7m. The revenues for the cinema chain included box office receipts from The Dark Knight Rises, The Hunger Games, Ted and The Amazing Spider Man.

According to the firm’s directors’ report: “The profitability of the company in 2012 suffered as a result of the downturn in the general economic climate.

“The directors anticipate that 2013 will be a difficult year, but they expect the company to achieve profits similar in 2012 by focusing on retaining existing business and tightly monitoring all costs.”

The firm — controlled by members of the Ward family — has multiplex cinemas in Dun Laoghaire, Tallaght, Athlone, Dundalk, Killarney and Ballymena.

On the property write-down, a note attached to the accounts states that the value of the properties was reviewed in light of the poor state of the economy and the fall in property values.

The note adds: “The directors think it appropriate that provision be made for the impairment in value of certain of the company’s properties and they have written them down to amounts which they deem to fairly represent the current value of those properties.”

The filings confirm the directors have declared and paid a dividend of €216,000 during the year in relation to the year ended Oct 31, 2010.

However, they state that they “have deferred the decision on the payment of a dividend in relation to the year ended Oct 31, 2012, until a later date”.

The figures show Leo Ward and Paul Ward each owned 28% of the firm at the end of Oct 2012 (Leo Ward died last January).