Cineplex Inc. jumped to record revenue of $345.5-million in the second quarter, spurred on by a trio of blockbuster film releases that helped push attendance, concessions sales and profits higher.
The company, which is Canada's foremost owner of movie theatres, has enjoyed a rebound after last year's weak film slate dragged on results. All of Cineplex's revenue categories improved compared to a year earlier.
Yet despite the record-breaking numbers, and packing three of the highest-grossing films of all time into a single quarter, the box office revenue Cineplex earned per patron edged up only slightly. That highlights the continuing challenge ahead for the company as it seeks to boost box office returns without raising ticket prices, and to diversify revenues to be less dependent on Hollywood's cycles.
The Avengers: Age of Ultron, Jurassic World and Furious 7 led at the ticket office, each cracking the list of the 10 highest-grossing films ever.
"We had a great quarter," chief executive officer Ellis Jacob said in an interview, while acknowledging that "I know some of the expectations were higher."
Cineplex recently promised to shrink the size of drink cups, rather than charge more from them, as a way of continuing to drive higher food and beverage revenues – concessions per patron hit an all-time high of $5.50 in the second quarter, up 8.3 per cent from the prior year.
And the company will soon rescale the way patrons of its Scene loyalty program can earn and redeem points, which should boost this quarter's record box office per person of $9.45 still higher. Cineplex continues to expand its premium theatres such as Imax, UltraAvx and VIP – which offer better seats, screens and sound systems, and accounted for more than 46 per cent of the total box office this quarter.
Through it all, what Cineplex has sought to avoid is raising ticket prices, but the industry has faced pressures ranging from lacklustre film slates to hikes in the minimum wage.
"We will continue to evaluate all of the options, but I'm not going to tell you categorically that we will never increase our prices," Mr. Jacob said.
Same-store box office – which leaves aside the addition of new theatres – was up just 0.8 per cent, "surprisingly below the Canadian industry growth of [2.6 per cent]," Aravinda Galappatthige, an analyst at Canaccord Genuity Group Inc., said in a research note.
Help is on the way in the back half of the year, however. The fall and winter film slates could be huge, with the new James Bond flick Spectre, the final instalment of the Hunger Games series, and the latest in the Star Wars franchise all set to open before the end of 2015.
Second-quarter profit increased 9.8 per cent to $25.5-million or 40 cents a share, up from $23.2-million or 37 cents last year, and revenue rose 6.8 per cent. Attendance continued to climb, up 2 per cent for the quarter to 19.7 million.
The company's media businesses, which include digital signage and in-theatre advertising, collectively brought in $4-million more revenue, a 13-per cent rise from the same quarter last year.
Cineplex also confirmed plans to test "a new distribution model" for movies with two horror films that will be made available for digital purchase at home just 17 days after their theatrical run – much sooner than the typical three-month window.
But Mr. Jacob said the model is intended to boost films in "certain genres" that tend to have short theatrical runs. And despite growing pressure from digital streaming services and advances in TV technology, he has no plans to extend the experiment to the most popular films. Cineplex and its studio partners remain "steadfast in what we are doing," he said.