Cineplex Inc. investors can thank The Hunger Games for a dividend increase, as the company credited strong box office figures for the increased payout as it reported its strongest first quarter on record.
Attendance increased by 12 per cent in the company’s theatres in the quarter, the company said. Revenue increased by 12 per cent to $248-million, and the company recovered from a small loss to post a $15-million profit.
Chief executive officer Ellis Jacob said the company would boost its dividend by 4.6 per cent to $1.35 a year.
“Film product during the current year period was stronger than the prior year period, with The Hunger Games recording the highest-ever box office revenues for a first-quarter release and the third-largest opening weekend of all-time,” the company said in a statement. “Attendance in the first quarter of 2012 also benefited from the first week of January being a school holiday whereas the first week of 2011 was not.”
The company said it was its strongest quarter for earnings before interest, taxes, depreciation and amortization, as it gained 31 per cent to $41-million.
But like other companies that sell advertising, Cineplex was hammered by a weak advertising market. Media sales – which includes on-screen advertising as well as sales in its in- theatre magazines – fell 29 per cent from the same quarter last year.
The biggest hit came from a pullback in government advertising, which accounted for 10 per cent of all sales in the first quarter. Last year, government ads counted for a 25 per cent.
The top five movies in the quarter were The Hunger Games (8.3 per cent of box office revenues), The Lorax (7.3 per cent), Mission: Impossible – Ghost Protocol (5.1 per cent), The Vow (4.7 per cent) and Journey 2: The Mysterious Island (4.6 per cent).
Those who flocked to see the movies also spent more on concessions, with revenues up 18 per cent to $77-million. The average movie-goer spent $4.50, up 5.4 per cent from last year.
“Cineplex believes a focus on revised concession offerings and better communication with customers through the expansion of a digital menu board program have both contributed to the higher [spending per customer]” the company said.