Cineworld Share Discussion Threads

[soundbuy] 10/3/2016 16:02

“The assumption was that a strong, UK plc experienced finance director, independent from the old Cinema City business, would be appointed on a full-time basis. The proposed management changes have partly overshadowed an excellent set of results.”

[soundbuy] 10/3/2016 16:01

Ah.....

Cineworld’s pick of Nisan Cohen for finance chief causes concern

[soundbuy] 10/3/2016 15:58

CINE - results weren't going to be much better - Canaccord none too chuffed re strategy over pricing for blockbusters - couldn't ask for more IMO......



One of the 'suitors' may be taking a glance in CINE's direction

[weemonkey] 10/3/2016 15:30

results often take a few days to bed down and get context. .

it is a busy day today with lots to think about all over the market.

[weemonkey] 10/3/2016 15:29

I think look at the growth and the ambition. .

Neither are questionable. .

management have lots of stock and are fighting our corner.

[grahamburn] 10/3/2016 15:09

But Cannacord only reckon the shares are worth 500p.

Take your pick on the advice.......

[lauders] 10/3/2016 13:49

Pretty amazing that a broker down grade a few days ago to a target price of 490p took the shares down over 30p and now good results have been issued and Cazenove have issued bullish words it is hardly up. Go figure!

[undervaluedassets] 10/3/2016 13:43

market somewhat churlish.

There may be a better cinema stock stateside.

But This is the stock if you want uK exposure.

No currency risk either.

Growth impressive

progressive divi welcome

[soundbuy] 10/3/2016 12:52

Cazenove.

Cineworld had what we regard as a very strong year in 2015. EBITDA
was up 18.5% on a proforma basis to £155m, 1% above our estimate. A
record 18 new sites were opened across the estate. 2016 has started well,
especially in CEE and Israel, but the UK has also been solid and in line
with expectations. Our EPS estimates increase by 3% in both FY16 and
FY17. We remain Overweight with an increased price target of 610p,
March 2017 (was 600p to Dec-16).
 Solid headline performance. Revenue was up 13.9% (12.4% proforma)
to £706m, in line with our estimate of £707m. EBITDA was £155.3m,
1% above our estimate of £154.2m. Adjusted PBT was £102.8m, up
37% and above our estimate of £94.1m and Bloomberg consensus of
£96.2m due mainly to a lower depreciation charge. Adjusted EPS was
31.7p, which was above our estimate of 27.9p and Bloomberg consensus
of 28.3p due to lower depreciation and a lower effective tax rate.



 Margin expansion. As well as increasing overall admissions by 6.5%,
Cineworld achieved growth in average ticket prices and retail spend per
person. This, coupled with operating cost efficiencies, allowed the
EBITDA margin to expand from 20.4% to 22.0%.
 Outlook is positive. We believe the outlook for further growth in 2016
is very positive. We expect a further 13 new sites to be opened (6 in the
UK and 7 in CEE/Israel). We also believe that Cineworld's business
model will see it outperform the UK box office in 2016.
 Changes to earnings estimates. There are no material changes to our
adjusted EBITDA estimates, which remain £170m in FY16 and £185m
in FY17. The assumption of a lower depreciation charge means our
operating profit estimates increase by 3% from £114.1m to £117.4m in
FY16 and by 2% from £125.3m to £128.4m in FY17. Our adjusted EPS
estimates increase by 3% from 32.3p to 33.2p in FY16 and by 3% from
35.4p to 36.4p in FY17.



Canaccord.

Cineworld's FY15 results were slightly ahead of consensus driven by the UK Other line
which includes film advertising. But we believe it could have been so much better.
Cineworld lost UK box office market share in FY15 and we estimate that it could be
missing out on as much as £2.2m of additional EBITDA per blockbuster in the UK.
Assuming a blockbuster/quarter that puts Cineworld’s missed UK opportunity at £8.8m.
For Bond, Hunger Games and Star Wars, the scale of the missed opportunity could have
been as much as £6.6m. The FY16 film slate is weaker and we do not expect consensus
to change materially. We retain our HOLD recommendation as the share price is below
our target price.
Detail
Cineworld reported FY15 EBITDA of £155.3m (+22.7%) and Adj PBT of £102.8m
(+37.15) with both reporting divisions performing equally well. To put performance into
context, Cineworld lost UK market share with box office revenue +8.0% versus market
+17.4%. Q1 has been saved by Deadpool, but the film slate is weaker this year with
the mix to more family films and less blockbusters, no material change to consensus is
expected at this stage.
The openings programme is on track: 18 new cinemas opened in FY15 and Cineworld
will continue to open 13-14 new multiplexes per annum from now on. The dividend was
+30% to 17.5p and net debt/EBITDA reduced by £37m to £282m. Cineworld can fund all
requirements from cashflow.
Cineworld has appointed Mr Dean Moore as interim CFO for 12 months pending the
promotion of Nissan Cohen to the job, who becomes deputy CFO.
Valuation
Yesterday's closing share price of 480p values the stock on a P/E of 16.1x for FY16E and
15.1x for FY17E, and EV/EBITDA of 8.9x falling to 8.2x, and FCF yield of 9.2% rising to
9.9%. Our 500p share price target is based on a PE of 16.8x, an EV/EBITDA of 9.2x and
8.8% FCF for FY16E. The default Quest® valuation is 302p. The stock has performed
relatively well compared to IMAX and Cineplex. Our CG preferred stock remains IMAX
(IMAX : NYSE : US$32 | BUY, TP: US$37).

[weemonkey] 10/3/2016 09:45

good results - great even

And down a touch

Added - makes sense

[philo124] 10/3/2016 08:05

Don't hold but v good results.

[soundbuy] 10/3/2016 07:47

Financial Times ‏@FinancialTimes 28 secs28 seconds ago

Cineworld hikes divi 30% after Star Wars boost

[capercaillie] 10/3/2016 07:41

Nice juicy rise in dividend

[soundbuy] 10/3/2016 07:35

CINE - look ahead to me (DYOR), UBS worries re CEE misplaced, excellent divvy growth/debt reduction, much to like.....

[lauders] 10/3/2016 01:30

Good luck holders! Let's hope the results and figures are positive/encouraging. Not really sure why RTN numbers would have such an impact on CINE. Restaurants & cinema may be related to some extent but cinemas have their own food and those who go out to the cinema do not necessarily spend extra money on a meal afterwards if they have been snacking through the film (more money to the cinema). We also have the European countries included with CINE as we know, and so it does not follow that they do the same as those in the UK. Since the DB downgrade has now reached the level stated pretty swiftly they can upgrade later today and make themselves look really clever ;-)

[sharw] 09/3/2016 15:30

RTN says "The growth of online shopping, resulting in lower footfall at some of the retail schemes where we operate has clearly had an impact"....

i.e. retail parks not leisure parks.

I think any reaction tomorrow will be to the tone of the outlook statement.

[lauders] 09/3/2016 11:12

I am hoping CINE will surprise and we will go up tomorrow, but probably being way too optimistic and will regret my long-term non-trade stance. Think I should start being like the rest of the market. Does anyone hold long-term anymore?

[philanderer] 09/3/2016 10:30

Down with those RTN numbers today ......lower footfall in retail parks
L for L down. Grim.

[lauders] 05/3/2016 02:40

Thanks SoundBuy! Not sure why brokers can't wait until AFTER results to issue such notes? They would surely have more "facts" to use than predicting beforehand? Looks like the price was rising "for no apparent reason" and UBS took advantage of that to knock them back a bit. The cynic in me would say this was done so one of their clients could load-up before results, but what do I know? They may well be turning around and issuing a buy note next week and then the share price will hardly move. Quite amazing how the market works sometimes.

leadersoffice - Very astute investment advice LOL! Perhaps you should provide a bit more substance than that, looks rather weak and rampy IMO. To their credit UBS do hit on an interesting point and that is the demographics of CEE countries may be changing and this might have an effect. Not sure about the children's films point. The CEE have their own productions and not sure how many are children focused ones. The point about lower admission fees in the UK is also interesting, but surely that would attract MORE people and thereby keep their premises busier than their competitors? Arguments for and against as usual!

The other side of the coin and more positive opinions:

Numis was the most recent with "add" before UBS came along to spoil the "party"!

All will be revealed on 10th March when results are released!

[leadersoffice] 04/3/2016 16:29

Take advantage of any weakness in share price and buy

[soundbuy] 04/3/2016 12:06

UBS

We initiate coverage with a Sell rating and 490p price target. We are cautious on the
remaining growth opportunity in Central Eastern Europe, given the roll-out focus on
Romania which accounts for just 9% of screens, and signs of maturity elsewhere in the
region. In our view, 2015 was an exceptional year for the film slate and new openings,
but we now see a more limited long-term growth opportunity. We forecast a 5.5%
2015-18 revenue CAGR, and a 7.0% adj. EPS CAGR, driven by our below-consensus
forecasts for cinema roll-out and same-cinema sales growth.


Potential risk to roll-out strategy in CEE
CCE is a roll-out story, with growth predominantly driven by new screen additions. We
see risks to growth that make us more cautious on this opportunity; (1) the roll-out is
not evenly distributed, with Romania accounting for two-thirds of the new screen
pipeline, and whilst underpenetrated would have more screens per urban capita than
Poland if Cineworld opened their signed pipeline for 2016/17 (2) a 25% decline in
Polish revenues between 2009 and 2014 is a sobering reminder that an
underpenetrated market does not guarantee growth, (3) Romania pipeline risk given
the reliance on the real estate market to provide new site opportunities, (4) relatively
immature local film markets in some CEE regions, (5) declining population trends in
Poland, Romania and Hungary.
Weaker film slate and limited price optimisation to drive UK business
In the near term, we believe the 2016 film slate will disappoint, against a strong 2015.
The 2016 slate looks skewed towards children's titles, which we believe will have an
impact on average ticket price, and a lack of blockbusters and franchises with a strong
track record may act as a drag on admissions growth. We also believe Cineworld is
missing an opportunity in its UK business to optimise pricing on blockbusters: its prices
were on average 16% lower than Odeon and Vue's for the recent Star Wars release.
Valuation: Our 490p target price is based on a FY16E PE of 16.4x
We value Cineworld based on a DCF, assuming a WACC of 8.0% and a long-term
growth rate of 1.5%. On a relative multiple basis, our 490p price target implies a FY16
PE of 16.4x and PEG ratio of 2.5x, versus a peer PEG average of 1.7x.

[lauders] 04/3/2016 11:24

Broker downgrade I believe :-( Hope the results blow their downgrade, whoever it is, "out the water"!

[lauders] 29/2/2016 11:19

Should have added at the recent lows and brought my average down but did not have the courage at the time!

[gswredland] 26/2/2016 09:29

Let's hope we can get through 550

[soundbuy] 26/2/2016 08:58

Looks like another broker rec though none showing as yet.....Hmmmmmmmm