Canadian cinema, FEC and VR operator Cineplex has announced some of its best-ever financial results.

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Total revenue increased 3.8 per cent to CA$1.6bn and adjusted EBITDA increased 8.7 per cent to $256.4m. “As our diversification initiatives continue to build scale and show more meaningful returns and we continue to focus on managing our costs," said Ellis Jacob, president and CEO.

"On a full year basis, box office revenue increased 1.2 per cent to $724.2m and theatre food service revenue increased 4.4 per cent to an all-time record of $440.7m. Box office per patron of $10.46 and concession per patron of $6.36 also represented annual records for Cineplex. Media decreased four per cent to $165m due to lower cinema advertising, however, amusement revenue increased 11 per cent to $205.8m, primarily due to added revenue contributions from The Rec Room. Despite the approximate $13m impact of the minimum wage increase, adjusted EBITDA grew as a result of the revenue increases, our diversification initiatives and our focus on controlling costs, including the $25m cost reduction program. As a result of the strong operating performance, net income increased 9.4 per cent to $77m and basic earnings per share increased 9.9 per cent to $1.22.

“Amusement revenue increased 8.5 per cent to $53.5m, largely as a result of greater contributions from The Rec Room. Total revenue from The Rec Room amounted to $17.9m and achieved a store level margin of 22 per cent. Despite the adjusted EBITDA growth, net income was down 5.7 per cent and basic EPS was down 4.4 per cent primarily due to the amendment of the credit facilities, which resulted in a one-time charge of $2.7m, and the interest rate environment, which resulted in increased non-cash swap charges of $1m.

“We accomplished a great deal in 2018, including the opening of three new theatres and the fifth location of The Rec Room in London, Ontario. We announced an agreement with 4DX to bring the experience to an additional 13 locations across Canada and expanded our Virtual Reality footprint in Canada with an exclusive agreement with The VOID and a significant investment in VRstudios. We partnered with Uber Eats to deliver movie theatre snacks right to your door, added alcohol beverage service to an additional 25 theatres across the circuit and released our new Cineplex app, featuring an improved user experience, digital tickets and mobile food and beverage ordering in VIP auditoriums.

Jacob concluded: “Coming off a record year in 2018, we are encouraged by the outlook of the 2019 film slate and confident in our strategic direction as we continue to build scale in our other businesses, prudently manage our costs and execute on Cineplex's diversification strategy for future growth."