RNS Number : 4556F
28 July 2016
Cineworld Group plc
Acquisition of five cinemas
Cineworld Group plc (“Cineworld” or “the Group”) today announces the acquisition of five cinemas from Cinema Holdings Limited, the holding company of Empire Cinema Limited (“Empire”) and the sale to Empire of the three screen Cineworld Haymarket (“the Transaction”). Cineworld will pay Empire an aggregate consideration of 94 million GBP1 for the Transaction.
The cinemas purchased are:
· the nine screen Empire Leicester Square multiplex, a leading London West End venue for movie premieres, which has a Laser IMAX screen,
· an 18 screen multiplex in Basildon, which has an IMAX screen,
· a 17 screen multiplex in Hemel Hempstead, which has an IMAX screen,
· a 16 screen multiplex in Poole, which has an IMAX screen and
· a smaller four screen cinema in Bromley in Greater London
In recent years, extensive investment has been made into this portfolio. EBITDA for the twelve months to 31 March 2016 was £9m2, which includes only a partial contribution from additional screens, and the UK’s first IMAX Laser in the Leicester Square multiplex, all of which were only opened part way through the financial period.
The Directors believe that the Transaction will be marginally earnings enhancing for Cineworld within the current financial year and provide high single digit earnings enhancement in 2017, including some anticipated synergies. The 2017 growth will benefit from the full contribution of the new screens opened in 2015 and 2016, which are not reflected in the historic EBITDA performance.
The consideration for the Transaction will be 50% cash and 50% new ordinary Cineworld shares. The shares will be issued to Empire in 5 instalments during a 12 month period, based on an issue price reflecting 20 days’ average trading price prior to the date of each issuance. The Transaction is unconditional and is expected to close before the end of August 2016. Cineworld will be notifying the Competition and Markets Authority (“CMA”) of the Transaction on a voluntary basis. The timetable for completion will not be affected by the notification to the CMA.
The Leicester Square, Basildon, Hemel Hempstead and Poole cinemas will take on Cineworld branding, while management is considering converting the Bromley cinema into a Picturehouse to make optimum use of its size and location. No further material capex is required due to the investment in the portfolio in recent years, and all the multiplexes are modern with state of the art equipment.
Cineworld will announce interim results for the period to 30 June 2016 on 11 August 2016.
Mooky Greidinger, Chief Executive Officer of Cineworld, said,
“This acquisition brings Cineworld five modern and well invested venues complementary to our existing estate, including the iconic Leicester Square cinema in the heart of London’s West End. It underscores our commitment to operating high quality and modern cinemas across all of our nine operating countries, and our mission to be the best place to watch a movie. I’m delighted that the Anderson family, well-known cinema industry veterans, have entrusted these sites to us. We welcome them as shareholders in Cineworld and look forward to delivering increased returns to all of our investors from integrating these cinemas into our group.”
Thomas Anderson, Chairman of Empire, said,
“I’m pleased to have found the ideal partner in Cineworld to buy these sites. Their reputation as good operators gives me confidence in a bright future for the cinemas and their employees, and as a shareholder in Cineworld, I trust the company’s ownership will enable it to maximise the value of these premium assets as part of its continued growth.”
1 Subject to customary adjustments
2 Extracted from management accounts for the twelve months to 31 March 2016
3 The shares issued as consideration are subject to a lock-up of 12 months from the date of completion
For further details please contact:
Cineworld Group plc
020 8987 5000
020 3772 2573
Elly Williamson/Zara de Belder
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
About Cineworld Group plc
Cineworld Group plc was founded in 1995 and listed its shares on the London Stock Exchange in May 2007.
The company has grown organically and by acquisition to become one of the leading cinema groups in Europe with the number one or number two position by number of screens in each of its regions. Cineworld currently operates 2,049 screens across 221 sites in the UK, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.