Moviegoers who forked out a few extra bucks for a premium-theatre experience helped drive quarterly results higher at Cineplex Inc. as the summer movie season got underway.
Canada’s largest chain of movie theatres earned $28.5 million, or 45 cents per share in its latest quarter, helped by a 6.2% increase in premium-priced tickets including films shown on its UltraAVX screens, as well as 3D, Imax and VIP theatres.
The company earned $21 million or 34 cents per share a year earlier.
Overall revenue rose more than 14% to $301.6 million from $263.7 million.
The improved financial results came as attendance increased 8.6% to 18.6 million patrons for the three months ended June 30 compared with 17.1 million a year ago.
Behind the numbers were several successful early summer movies, including Iron Man 3, Star Trek: Into Darkness, Man of Steel and Fast and Furious 6. Those movies shared a large portion of the ticket sales, compared to the same period a year earlier when Marvel’s The Avengers dominated the box-office.
Cineplex also benefited huge from its media and advertising business where revenues increased nearly 45% to $26.4 million.
“We definitely are seeing much more traction in the media end of things,” said president and chief executive Ellis Jacob in an interview.
During the quarter, Cineplex held its first “media upfront” for advertisers where the company showcased where ads could be purchased, including the in-house Cineplex Magazine, its website and mobile app, as well as on movie theatre screens and in its lobby space.
“Theatre advertising is a very small piece of the pie and it had lots of growth potential,” Jacob added.
The company has been making inroads in the advertising business after recovering from the economic downturn when ad buyers, particularly in the automotive sector, tightened their budgets.
Last month, Cineplex signed a deal to acquire EK3 Technologies, a private company based in London, Ont., that deals in digital signs.
Cineplex said EK3’s operations in 32 states, as well as in Canada and other countries, will complement its own digital signage business and provide its advertising-driven media arm with a way to expand into the United States.
Quarterly adjusted earnings, which excluded a number of items, rose to $58.7 million – an increase of 24.2% from $47.3 million in the comparable period of 2012.
Meanwhile, concession revenue improved about 12% to $89.7 million compared with $80 million a year ago as concession revenue per patron increased to $4.81 compared with $4.66 in the second quarter last year.
Cineplex reached a deal in June to buy 26 theatres – all but two of them in Atlantic Canada – from Empire Co., the Nova Scotia-based parent of Sobeys Inc. for $200 million in cash.
Shares of Cineplex increased more than five per cent, or $1.99, to $39.51 on the Toronto Stock Exchange.
