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- Cineworld Group to re-open UK cinemas by May and US cinemas by next week.
- The leading cinema house has clinched an agreement with Warner Bros Group for theatrical exclusivity.
- The company stock price dropped by over 8 per cent in early deals despite the positive developments.
Cineworld Group plc (LON: CINE) announced on Tuesday, 23 March, that it would be re-opening cinema screens in May across Britain, in line with the current government guidelines. Despite the announcement, the company share price fell by over 8.00 per cent in morning deals.
The film giant would also be re-opening its Regal branches in the US next week. A subsidiary of the Cineworld, Regal operates a large theatre network in America. The leading cinema exhibitor chain had to shut down 660 branches worldwide seven months back.
Mooky Greidinger, CEO, Cineworld, said that the company would closely monitor developments across the UK and Europe, as it plans to re-open theatres in line with government guidance. The world’s second largest cinema chain (market cap at over LSE: £1.5 billion) operates over 9500 screens across nearly 770 sites across the globe.
The British cinemas are not scheduled to re-open until at least 17 May, according to the latest official update with the next announcement due on 5 April.
Agreement with Warner Bros
The cinema chain has also signed an agreement with Warner Bros. Pictures Group, the global film production house. Under the agreement, the group’s films shall be exhibited in Cineworld's cinemas in the US with 45 days theatrical exclusivity window.
For the UK market, the two firms have agreed to an exclusive theatrical window of 31 days for the films before they are released on a streaming service. Greidinger said that the agreement reinstated the studio's commitment to the theatrical business.
The company, in its half yearly results for the period ending 30 June 2020 stated that it earned a revenue of $712.4 million and an adjusted loss before tax of $567.7 million for H1 2020 (H1 2019 – revenue: $2151.2 million, adj. PBT: $156.1 million). The adjusted loss per share was $31.8c for the six-month period.
The group had secured a financial lifeline worth £550 million in November 2020 to help it weather the coronavirus pandemic. Throughout most of the pandemic led crisis, the company’s 5,500 UK employees remained furloughed.
The cinema chain will report its annual results this week, with analysts expecting a pre-tax loss of almost £500 million.
Cineworld’s shares were hovering at GBX 109.00 on 23 March at 12.47 PM, down 2.07 per cent from its previous day’s closing price. Its 52-week low/high range was recorded as GBX 15.64 and GBX 124.85, respectively with earnings per share of 0.13 per cent at the time of writing.