12th Apr 2023 10:29
(Alliance News) - Despite Everyman Media Group PLC posting a improved annual results on Wednesday, it still has potentially tough outlook ahead, according to AJ Bell.
In the financial year that ended December 29, the London-based independent cinema chain said its pretax loss narrowed to GBP3.5 million from GBP5.4 million.
This was as revenue soared 61% to GBP78.8 million from GBP49.0 million.
Everyman claimed this was due to strong growth in admissions during the year. But AJ Bell analyst Russ Mould still urged caution ahead for the "posh cinema operator".
"It needs to keep prices low enough that it remains an affordable luxury for a large enough audience, while at the same time maintaining the quality and standards which help incentivise film-lovers who can stream most films they want at the click of a button to go out and pay to see the latest releases on the big screen," Mould commented.
"The company's model is also reliant on people taking advantage of the opportunity to order food and drink to their seats. If people decide they can't afford to do anything other than rock up and watch the film, that could weigh heavily on profit."
While Mould admitted it appears to "for now [...] be doing a decent job by announcing a big jump in admissions in 2022 versus 2021", he argued this can be partly explained by its emergence from the pandemic.
In a sign of confidence, Everyman has increased its estate of venues. Everyman said two new cinemas opened in April and September 2022 respectively, taking the group to a total of 130 screens, up from 119 in 2021, across 38 venues, it said.
Looking ahead, Everyman added six new cinemas are confirmed to open in 2023, alongside an "exciting" pipeline of further opportunities for 2024 and 2025.
"We opened two new venues in Edinburgh and Egham in 2022 and are excited to welcome audiences to new openings in Durham, Salisbury, Northallerton, Plymouth, Marlow and Bury St Edmunds in the second half of 2023," said Everyman Chief Executive Officer Alex Scrimgeour.
"As a result of our strong performance in year, we are actively returning to an agenda of managed organic expansion. The company is also assessing acquisition opportunities of existing cinemas which are suitable to be converted into Everyman venues."
It said it anticipates continued financial improvement from higher admissions, strong management of costs and new site openings, despite the current difficult macroeconomic environment and its impact on consumer spends.
"We view our prospects with increasing confidence. Moving through 2023 and beyond, the Everyman proposition feels as relevant as ever," Scrimgeour added.
Shares in Everyman were down 0.5% to 65.15 pence each in London on Wednesday morning.
By Greg Rosenvinge, Alliance News reporter
Comments and questions to [email protected]
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Related Shares:
Everyman Media