Cineworld opened a record 18 new cinemas last year taking its estate to 221 sites with 2,011 screens. The box office performance was also robust with pro forma admissions up by 6.5% to 93.6m. Looking ahead and Cineworld is set to increase the number of cinema screens by almost a quarter over the next four years.

Last year saw a blockbuster performance at the UK Box Office revenue up by 17.3% to a record £1.24bn. Box Office revenue does increase over time, given ticket price inflation, but this was nevertheless a strong result.

UK cinema admissions increased by 9% last year to 171.9m following a fall of 2.4% in 2014 and 1.6% in 2013. The 2015 movie releases driving the performance were Star Wars: The Force Awakens, Spectre and Jurassic World.

The Force Awakens is now the biggest ever box office hit in the UK with £ 122.6m of revenue at the end of February. Spectre is the third biggest ever UK box office revenue generator at £94.75m and Jurassic World is the tenth highest at £64.2m.  

Top ten all-time films by UK box office revenue

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Source: UK Cinema Association

This backdrop meant for robust trading at Cineworld, which is the largest cinema chain in the UK. The company is also the second largest Cinema chain in Europe due to the combination with Cinema City on 28 February 2014.

Cinema City was founded in 1929 by the Greidinger family and is focused on Central & Eastern Europe (CEE) and Israel. The CEE countries are less mature in terms of cinema penetration than the UK and have greater growth potential.

Cineworld’s cinema admissions by country in 2015

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Source: Cineworld investor presentation

Cineworld’s cinema admissions in the UK & Ireland were 50.9m in 2015 versus 42.7m in CEE & Israel. The group generated 62% of its EBITDA profit in 2015 from the UK & Ireland with the remainder coming from CEE & Israel.

The EBITDA margin in the UK & Ireland was 20.5% last year while in CEE & Israel it came in at 24.8%. The higher profit margin in CEE & Israel suggests that expansion in Central & Eastern Europe will be profitable.

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