You are here: Home - Investing - Experienced Investor - News -

Stock of the week: Cineworld

0
Written by: YourMoney.com
14/08/2017
Ian Forrest, investment research analyst at The Share Centre, picks Cineworld as stock of the week.

It seems as though a lot of people have been spending their Saturday night at the movies in the first half of 2017 as one of the leading cinema groups in Europe, Cineworld, reported last week that first half earnings had increased by 13%. Revenues for the period rose 18% to £420.2m while pre-tax profit was up 22.4% to £50.2m.

The group also highlighted that blockbusters including Beauty and the Beast and Guardians of the Galaxy were part of a line-up of films that contributed to admissions growth of 10% to £50.7m, which investors should note was far greater than the 2.7% growth rate reported in the previous year.

This is a business that has been expanding its operations across the UK in recent years and has boosted its growth further with acquisitions in Central and Eastern Europe where it sees good potential. As well as this, Cineworld has increased the amount of retail sales at its sites by introducing outlets including Starbucks.

Interested investors should appreciate that the company, which was founded in 1995 and floated in May 2007, was keen to highlight that the positive first half results posted last week reflected its investment in its ‘next generation cinemas of a high quality with the latest audio and visual technology’.

The good news doesn’t stop there as the company informed investors it had made a good start to the second half and there is further potential due to a number of blockbuster films still to come in the run-up to Christmas.

The fragmented nature of the European cinema market means there is plenty of scope for acquisitions and the benefits of scale that brings. Moreover, a good track record of growth organically and through acquisitions has led to strong cash flow helping to lower debt, increase dividends and fund further expansion.

As a result, we believe the force is strong at Cineworld and we continue to recommend the shares as a ‘buy’ for medium risk investors with a balanced portfolio.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
studentaccount
Student bank accounts: how to find the best deal

With the academic year soon upon us, students up and down the country are faced with a host of possible...

Close