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Everyman Cinemas warns over trading figures amid blockbuster uncertainty

Published 20/11/2016

Cinemas tend to make a greater proportion of their earnings in the second half of the year, making box office hits more crucial as the year comes to a close
Cinemas tend to make a greater proportion of their earnings in the second half of the year, making box office hits more crucial as the year comes to a close

Everyman Cinemas has cautioned over year-end trading amid concerns that this season's films will fail to match the success of last year's blockbusters like James Bond's Spectre and Star Wars: The Force Awakens.

The upmarket cinema chain saw box office takings rise 49% year-on-year to £12.13 million between January and June, but chief executive Crispin Lilly told the Press Association the final months of the year could be shaky.

"The big caution there is that fourth quarter last year was huge. In the fourth quarter we had both Bond and Star Wars, so the comparables this quarter are scary.

"We have Star Wars: Rogue One and we have Fantastic Beasts (And Where To Find Them), both of which could be stunning, but there's slightly more unknown quantities. So to be honest the jury is still completely out as to where the year end will fall."

Cinemas such as Everyman tend to make a greater proportion of their earnings in the second half of the year, making box office hits more crucial as the year comes to a close.

But Everyman Cinemas is in for the long-haul and is aiming to increase its cinema numbers from 20 to 40 over the next five years, which would see job numbers rise from 520 to more than 1,000.

Heavy investment in its estate and planned openings led to a pre-tax loss of £295,000 for the first six months of the year.

The chain will have opened three new sites in 2016, having launched in Bristol in May, a Harrogate new-build cinema in September, and a five-screen site in Chelmsford by Christmas.

It followed the acquisition of four sites previously owned by Odeon last year.

"We're in massive growth at the moment and expansion is coming online all the time, and new sites are maturing year-on-year, so you know, we really are ramping up month-by-month."

The chief executive said movie-goers are now more willing to pay premium prices for hospitality, which has helped independent and boutique cinemas thrive.

He also noted that Everyman plays to a "community spirit" by helping rejuvenate city centres across the UK, but said he does not believe the chain's reputation has been impacted by its use of zero-hours contracts.

"Cinema is a very peculiar business. Our admissions can literally quadruple overnight, and they can halve and go backwards by the same amount overnight, too... it's a mutual flexibility in our arrangements with our employees and our teams."

He added: "We've been historically a responsible zero-hours operator. We don't implement the practices that other people have been pulled apart for, and in my opinion rightly so."

Given the controversy around zero-hours contracts, Everyman has tested an alternative base contract for 40 hours per month that it will roll out across its network by the end of next year.

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