An underwhelming lineup of movies cut deeply into Cineplex Inc.’s profits in the first quarter, despite a surge of in-theatre advertising and booming concession sales.
The Toronto-based theatre company posted an $8.8-million profit, 41 per cent lower than the same quarter last year as attendance dropped by 5.5 per cent and revenue remained flat at $248-million. Per-share earnings were 14 cents in the most recent quarter, down from 26 cents a year earlier. The company also raised its dividend by 6.7 per cent, to $1.44 a year.
Cineplex said box office revenues were lower than at the same time last year, chiefly because viewers didn’t have as many marquee titles to pull them into theatres. The biggest draw in the first quarter was Oz: The Great and Powerful , which couldn’t draw anywhere near the numbers posted by The Hunger Games last year.
“The decrease was primarily due to a 5.5 per cent decrease in attendance as a result of the current period lacking a blockbuster release similar to the prior period’s highly-anticipated release of the first film in The Hunger Games trilogy, which recorded the highest-ever box office revenues for a first quarter release and the third-largest opening weekend of all-time,” the company reported in a filing.
The problem was compounded by a lack of children’s releases during March break, a key week for Cineplex – only one of the top 5 films of the quarter, Jack The Giant Slayer , catered to children.
Cineplex averaged $8.97 in revenue per patron, compared to $8.72 a year ago, as more viewers opted to upgrade their tickets and visit the companies VIP theatres, which charge more for admission and offer perks such as enhanced menus and valet parking.
And while concession revenues decreased in the quarter because of lower attendance, the company managed to get more out of each customer that did visit its stands. The average visitor spent $4.69 in the first quarter, compared to $4.50 last year thanks to “a focus on revised concession offerings … and improved product promotion through the expansion of a digital menu board program.”
It also saw advertising revenue increase sharply, up 28 per cent as local and national advertisers bought space in its theatres and aired ads prior to the start of movies. The Top 5 movies in the quarter were Oz: The Great and Powerful, The Hobbit: An Unexpected Journey, Identity Thief, Django Unchained, and Jack the Giant Slayer.