New multiplexes to drive cinema business
Belying the notion that Australia is a mature cinema market with little room for growth, Event Cinemas plans to open eight multiplexes in the next two years, most in partnership with Village Roadshow.
These locations will add 70 screens to the 492 operated by Event Cinemas’ parent Amalgamated Holdings Ltd.
The new sites and a seemingly strong film slate for 2015-2016 are highlighted by Ord Minnett analyst Nick McGarrigle in a bullish report on AHL issued today. McGarrigle has a buy rating on AHL’s shares, which he values at between $10.57 and $13.97, compared with this morning’s price of $8.98.
Industry-wide, box-office revenues are up 5% on last year, boosted by the lucrative Easter/Anzac Day holidays.
He believes the Event Cinemas/Village circuit is taking market share from Hoyts thanks to its superior offering in premium concepts and food and beverage. If so, that’s an issue that Hoyts needs to address given the IPO planned for later this year.
In the next few months he’s bullish about the prospects of Godzilla, X-Men: Days of Future Past, Maleficent, How to Train Your Dragon 2 and Transformers: Age of Extinction.
Among the films slated for 2015-2016 which McGarrigle highlights are Star Wars Episode VII, The Hunger Games: Mockingjay Part 2, The Avengers: Age of Ultron, Fast & Furious 7, James Bond 24, Fifty Shades of Grey and Avatar 2.
The new locations are in Palmerston in the Northern Territory, Brisbane’s Springfield and North Lakes, Townsville, Smithfield near Cairns, Kotara near Newcastle, Miranda in southern Sydney (refurbishment), and Plenty Valley in suburban Melbourne.
Also planned is a new cinema in the Auckland suburb of Newmarket.
McGarrigle estimates AHL's cinema businesses are worth between $1 billion and $1.3 billion and he values its 3,000-room hotel empire at $545-$648 million.