Peter Rabbit helps Cineworld hop to bumper reopening weekend

Movie theatre chain Cineworld reported a strong opening weekend in the UK after Covid-19 restrictions were lifted, led by the success of Peter Rabbit 2: The Runaway and popcorn-munching patrons.

“This weekend's performance went beyond our expectations as customers were eager to return to the movies and enjoy the full movie experience, including the traditional popcorn which led to strong concession income,” the company said on Monday.

Britain last week relaxed bans on indoor gatherings in the latest stage of the government's pathway out of a national lockdown imposed in January.

The UK's biggest film outlet operates the Cineworld, Picturehouse and Regal brands, operating 793 venues worldwide and has around 5,500 UK staff.

Cineworld said more than 97% of its US cinemas, or 502 sites, had resumed operations after the opening of an additional 167 cinemas In the rest of the world, Poland and Israel would be opening at the end of the coming week and the most of its cinemas will be up and running by the end of the month.

The group added that it had received the full $203m tax refund under the US CARES Act.

Chief executive Mooky Greidinger said he expected next weekend's results to be strong with the releases of Cruella, and A Quiet Place 2.

“When combined with improving consumer confidence and the success of the vaccination rollout, we expect a good recovery in attendance over the coming months, noting the record breaking success of F9 in the Asian market,” he said. boosting revenues as they splashed out on popcorn buckets.

SUSTAINABLE RECOVERY?

Cineworld in March said it had had secured extra funding and was looking to lift debt limits after a huge annual loss due to the Covid-19 pandemic, while also warning any tightening of restrictions would force it to seek further cash.

The company reported a pre-tax loss of $3bn, compared with a profit of $212m a year earlier as revenue collapsed to $852m from $4.3bn in 2019. It also announced a binding commitment from a group of institutional investors for a new $213m convertible bond due in 2025 and said it would ask for shareholder approval to temporarily suspend the company's borrowing limit.

Cineworld at the time said it expected "strong pent-up demand for affordable out-of-home entertainment" post re-opening. The company closed its UK and US cinemas in October as studios delayed major box office releases.

Analysts have expressed concerns about the pace of recovery in the industry with more people turning to streaming services for their entertainment while stuck at home during lockdowns.

AJ Bell investment director Russ Mould noted that Cineworld had not provided any figures for sales or admissions, "so we’re only going on the word of the management that performance was good. Yes, the company said UK trading beat its expectations – but what if they were extremely low in the first place?".

“The weather was atrocious in many parts of the UK and so going to the cinema would have been a welcome relief, particularly to keep children entertained. But what happens if we finally get some good weather this weekend and from then on?

“The nation might prefer to enjoy the great outdoors and associated leisure activities, instead of sitting in a dark room with strangers and worrying about whether the ventilation system is up to scratch.