The FTSE 250 stock’s year has been defined by early February’s confirmation of its $3.6 billion reverse takeover of US firm Regal Entertainment, funded with debt and a £1.7 billion share sale. Creating the world’s second biggest cinema chain – when measured by number of screens at least –that rights issue roughly halved Cineworld’s price from £5.20 to £2.46.
Since then the stock has gradually risen, hitting a post-Regal deal high of £2.79 in the middle of July. Cineworld Group (LON:CINE) PLC now sits at a current trading price of £2.75.
The company’s last update came in mid-May, when it reported its first quarter statement. There it announced that, between 1st January and 13th May 2018, group revenue rose 10.1%, with a 10.2% jump in the US driven by Black Panther and Avengers: Infinity War. However, at a constant currency basis things weren’t quite as rosy; though total revenue was still up 6.7%, in the UK & Ireland it fell 2.1%, thanks to tough comparatives with Q1 2017’s Beauty and the Beast and The Fate of the Furious boosted box office.
As for Cineworld’s interim results on Thursday, the tail end of the reporting period faces stiff competition from the World Cup and heatwave, both of which caused some ugly box office numbers in the UK. Solo: A Star Wars Story, one of the Q2 films highlighted by the company back in May, also drastically underperformed expectations, though that should be somewhat compensated for by Jurassic World: Fallen Kingdom and Deadpool 2.
Cineworld Group PLC has a consensus rating of ‘Buy’ alongside an average target price of £7.53.
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