TORONTO – Cineplex says the weak economy has been good news for Canada’s largest movie chain, which posted its best-ever annual and fourth-quarter results Tuesday, helped by a big boost from the latest instalment in the “Star Wars” franchise.
“What we’ve seen normally in our business is that when there are recessions and the economy is down, people still want to escape the tough times, and this is a very reasonably priced treat that people can have,” said Cineplex president and CEO Ellis Jacob.
Cineplex (TSX:CGX) reported box office revenue of $196.3 million in the final quarter of 2015, up $23.8 million or 13.8 per cent from a year earlier.
Nearly a quarter of the revenue was driven by “Star Wars” ticket sales, even though the film only played for 14 days in the period. “Star Wars: The Force Awakens” was also the company’s top film for 2015.
Jacob said moviegoers still see the value of going to see a film during bad economic times, but may rethink purchases on higher ticket items like vacations, concerts and sporting events.
“When you look at it — where can you get for a cost of an hour of parking — (the chance) to see a movie that costs hundreds of millions of dollars to produce?” he said.
Cineplex’s total revenue from all sources, including concession sales, advertising and newer business initiatives was $407.4 million, up 22.6 per cent from the fourth quarter of 2014. Net income more than doubled to $76.8 million or $1.22 per share, from $32.1 million or $0.51 per share.
The company reported total revenues of $1.37 billion for all of 2015, up 11 per cent from $1.23 billion in 2014. Net income also climbed, up 76 per cent to $134 million from $76.3 million the previous year.
The company said it set records for both fourth quarter and full-year revenue, while quarterly attendance was a record 20.4 million — up 7.1 per cent from the previous year .
Box office revenue per patron was $9.63, up 6.3 per cent in the fourth quarter of 2014, and concession revenue per patron was $5.58, up 8.6 per cent.
Despite attendance records, Jacob said the company remains focused on diversifying its offering into more than that of a traditional movie theatre.
It plans on opening 10 to 15 locations of The Rec Room over the next few years. The first two locations — slated to open in Edmonton and Calgary — will offer casual dining, arcade and entertainment shows like a light show under one roof.
Diversification also means showing Bollywood movies and other foreign-language films, including some in Mandarin and Tagalog, and holding special screenings from the Metropolitan Opera and finales of popular TV shows like Game of Thrones.
Another big focus is its foray into eSports, which it hopes will continue to draw younger crowds into its movie theatres. The company is holding a number of regional video game tournaments featuring the game Call of Duty: Black Ops III, with its national tournament slated for March 6 at the Scotiabank Theatre in Toronto.
It plans on holding four national video game tournaments a year, and is eyeing expanding the idea to its theatres in the U.S.
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Note to readers: This is a corrected story. A previous version said Cineplex had record attendance of 20,383 for the fourth quarter.