Cineplex says Q4 profit soars as Canadians find alternatives to hockey

TORONTO - A slate of Hollywood hits featuring superheroes and a secret agent helped exhibitor Cineplex Inc. deliver the best full-year results in its history, and an almost 200-per cent increase in fourth-quarter profit.

Chief executive Ellis Jacob said the NHL hockey lockout left Canadians with fewer options for Saturday night entertainment. He thinks that was at least part of the reason Cineplex saw quarterly attendance jump 23 per cent.

"I keep saying (it) helped us, but it's hard to quantify," Jacob said in an interview Thursday after the company reported its results.

"All I can tell you is personally when I asked people, 'What are you doing?' everybody on a Saturday night seemed to be going to a movie. When we checked the numbers it was hard to tell."

Fourth-quarter net income rose to $32.7 million, or 52 cents per diluted share, compared to $10.9 million, or 19 cents per share, in the 2011 quarter, the company said.

On an adjusted basis earnings were 51 cents per share, beating analyst estimates of 42 cents, according to a poll by Thomson Reuters.

A combination of high-adrenaline action movies like James Bond entry "Skyfall" and broadly appealing adventures like "The Hobbit" and the finale of the Twilight series gave hockey fans plenty of alternatives.

"The movies were appealing to a much wider demographic," Jacob added.

Quarterly attendance rose to 18,577 patrons who spent 2.9 per cent more at the concession stand per person compared to a year earlier.

Revenue was up 23.6 per cent to $298.7 million from $241.7 million, with part of the increase coming from more money spent at the concession stands.

The total revenues for food, drinks and other treats rose nearly 27 per cent to $86.4 million.

Cineplex is by far the country's biggest exhibitor and owns movie theatres from Quebec to British Columbia. The company draws about 70 per cent of Canadian box-office revenue, with its competitor Empire Theaters ranking a very distant second place with about 14 per cent.

The Toronto-based company has ramped up the expansion of its higher priced "VIP'' theatres that cater exclusively to adults by offering larger seats, menu service, and a licensed auditorium and lounge. The move is part of a broader expansion at Cineplex of premium priced ticket options, which have helped drive box-office revenue even during quarters when Hollywood movies fell short of expectations.

In the fourth quarter, about 29 per cent of box-office revenues came from premium-priced tickets, a decline of one per cent.

For the full year the company benefited from the popularity of hits like Marvel superhero combo "The Avengers" and the finale to the Batman trilogy, "The Dark Knight Rises."

Net income was $120.5 million or $1.97 per diluted share, a whopping 144.6 per cent improvement over the $49.3 million, or 85 cents per share it earned in 2011.

Revenue pushed above the billion-dollar mark to $1.09 billion from $998.2 million.

Box office revenues increased 10.6 per cent to $638.3 million from the previous year, while concession revenues came in at $329.3 million, up 12.9 per cent.

Meanwhile, theatre attendance reached a new all-time high of 71.2 million, an increase of 7.8 per cent over 2011.

Jacob noted that in addition to "very strong financial performance," the company completed a number of theatre projects and acquired four AMC theatres, three in the Greater Toronto area and one in Montreal.

It also completed the rollout of digital projection technology and added 16 UltraAVX auditoriums to bring its total to 39.

Cineplex, with about 10,000 employees, operates 134 theatres representing 1,449 screens under brands that include Cineplex Odeon, Galaxy, Famous Players, Colossus, SilverCity and Scotiabank theatres.

The company's shares rose 2.6 per cent, or 78 cents, to $33.24 in afternoon trading on the Toronto Stock Exchange.