Music: {allcanada} Cineplex sees strong H2 as big titles line up

Friday, June 17, 2011

{allcanada} Cineplex sees strong H2 as big titles line up

BANGALORE (Reuters) – Canada's Cineplex Inc expects the latest installments in the Transformers, Twilight and Harry Potter movie series to earn stronger box office revenue for the second half than in the first half and versus the same period last year.

Cineplex CEO Ellis Jacob predicts the latest "Transformers" film will be the top earner, grossing about $400 million in North America, ahead of about $350 million for "Harry Potter and the Deathly Hollows Part II."

"Cars 2" should be the year's top animated feature, grossing around $250 million, while "Puss and Boots" should bring in about $200 million, Jacob said in a telephone interview.

Box Office accounts for about 60 percent of Cineplex's revenue, which, last year, totaled just over C$1 billion. The number of movie-goers dipped slightly last year to 69.4 million from a record 70 million in 2009.

Cineplex has about 67 percent market share of Canadian box office revenue, sees room for more growth. "I don't think you will see us get to 80 percent," Jacob said.

Cineplex operates in six of Canada's 10 provinces, and sees British Columbia and Ontario as the fastest-growing markets.

Its closest competitor in Canada is Empire Theatres, part of Empire Co Ltd, which has around 13 percent market share.

Jacob, however, says it's unlikely Cineplex will push for much growth in the United States. "We are a big fish in a small pond in Canada, and we don't want to be a minnow in the ocean in the U.S."

Cineplex is more likely to push into other English-speaking markets such as Britain, New Zealand and Australia, and developing markets such as India, Jacob said.

The company, which had C$87 million in cash at the end of last year, had 466 digital screens, of which 380 have RealD 3D technology.

Other than movies, Cineplex operates a food business, a media business -- with pre-show screen advertising, websites, digital signage and a magazine -- a loyalty program with Scotiabank and an e-commerce business, which rents and sells digital downloads of movies.

"It's in our interest to grow all these other businesses as it buffers the impact of Hollywood. By having Bollywood, Filipino and alternative programing, we utilize our theater box and real estate to the point where it maximizes our revenue," said Jacob, who has been CEO since 2003.

Cineplex shares have gained about 12 percent this year, in line with the sector sub-index, and earlier this month hit a life high of C$26.72.