British movies buoy Cineworld earnings

The success of hit British films such as 'Hot Fuzz' and 'Mr Bean’s Holiday' helped cinema chain Cineworld swing to a profit during the first-half of the year, the company said today.

The group, which made its stock market debut in April, said a strong performance by the UK film industry helped to attract growing numbers of movie buffs to its cinemas in the six months to June 28.

Blockbuster box office hits such as the latest Pirates of the Caribbean film, Spiderman 3 and Shrek The Third also helped admissions rise 8% on a year earlier to 21.7 million.

Pre-tax profits for the period rose to £5.1m (€7.3m) from a loss of £6m (€8.5m) a year earlier while group revenues increased 4.1% to £135.7m (€194m) as Cineworld benefited from weak comparisons with trading in 2006 when hot weather and the World Cup kept film fans out of cinemas.

Chiswick-based Cineworld today added that future instalments of film franchises including James Bond, Harry Potter, Batman and the Chronicles of Narnia had led to increasing confidence for its performance in 2008.

Chief executive Stephen Wiener said: “It has been a strong first-half performance from the group and we are making good progress in growing sales and profitability on all fronts.

“The second half of the year has started well for the group and we have some exciting new releases ahead of us in the remainder of the year and beyond,”

The company added that its strategy of offering a broad array of films had been successful, driven by demand for foreign language films such as the German-made The Lives of Others and French films Tell No One and La Vie En Rose.

It also said it was now offering more Indian-produced Bollywood films at its cinemas than in previous years.

Cineworld was set up in 1995 and operates 758 screens across 73 sties, with its most recent cinema opening in Didcot, Oxfordshire, in May.

The firm’s shares have risen strongly since its listing on the London market - climbing from 170p at flotation to high of 227p on Wednesday.

However, investors gave a frosty reception to today’s figures – sending the shares down more than 7% as the firm said figures in coming months would face strong comparisons with trading at the end of 2006.

Cineworld, which bought rival UGC in 2004, is the UK’s second-largest cinema chain behind Odeon.