By Brendan Swift
Entertainment company Amalgamated Holdings has warned that its first half profit will be at least one-quarter lower than a year earlier after a sharp fall in audiences attending its cinemas.
The company's Australian cinemas – which include Event Cinemas, Greater Union and Birch, Carroll and Coyle Cinemas – posted a 21 per cent fall in audience admissions in December while its German cinema chain fared even worse, declining by 30 per cent. The rising Australian dollar also hurt its German operations.
AHD managing director David Seargant warned that soft film product and flooding in NSW and Queensland will continue to affect the performance of its cinemas this year.
"The decline in admissions across our exhibition circuits has continued over January and this is being further impacted by the disruption caused by the flood crisis on our Queensland and Northern NSW cinema and hotel operations,” he said in a statement: “This, and the likely short term continuation of relatively soft film product, will impact on our first quarter trading result for 2011”.
AHD now expects its first half normalised profit to be between 25 per cent to 30 per cent lower than the same period a year earlier. (The $60.3 million profit from the sale of its 49 per cent share in the Middle East Cinema Operations is not included in normalised profit.)
The warning surprised investors, who drove the share price down by nearly 13 per cent after the announcement yesterday.
The annual Australian box office figures, which will be announced later this month, are expected to be slightly higher than last year’s record $1.09 billion performance, which was bolstered by James Cameron’s 3D epic Avatar, Harry Potter and the Half Blood Prince and Transformers: Revenge of the Fallen.
Private equity company Pacific Equity Partners is still eyeing up the market for a potential float of rival cinema chain, Hoyts Group, although if the market continues to weaken it may delay the sale.
Late last year AHL partnered with the IF Awards (which is run by IF magazine's parent company Intermedia) to co-present its Cine Buzz loyalty club screenings of local films.