MARKET REPORT: Cineworld Shares Swing Higher
MARKET REPORT: Cineworld shares soar higher as success of new Spider-Man movie helps drive revenue back to pre-pandemic levels
Shares of Cineworld soared as the success of the new Spider-Man movie helped bring revenue back to pre-pandemic levels.
The FTSE250 group rose 4 percent, or 1.56p, to 40.35p, as sales in December last year were 88 percent from the same figure in 2019, up from 56 percent in November.
Cineworld noted that the ‘particularly strong’ performance was bolstered in December by the release of Marvel blockbuster Spider-Man: No Way Home, the first film since the start of the pandemic to gross more than £1.1 billion at the box office. .
Rebounding: Cineworld noted that December’s “particularly strong” performance was boosted by the release of Marvel blockbuster Spider-Man
Revenues for the company’s U.S. movie theaters were the strongest this month, rising to 91 percent from pre-pandemic levels. The UK and Irish screens accounted for 89 percent of the figure generated in December 2019.
As a result of the recovery and cost-cutting measures, Cineworld’s cash flow turned positive in the fourth quarter of 2021.
“This shows that fans continue to choose the unparalleled theater experience,” said group principal Mooky Greidinger. Analysts at broker Peel Hunt said the update was “encouraging,” as were a strong roster of releases in 2022, including The Batman, Top Gun: Maverick, Jurassic Park: Dominion and Mission: Impossible 7.
However, the broker warned that the share price would be affected by the ongoing £723 million legal battle with Canadian rival Cineplex following an aborted merger between the two in 2020.
Cineworld is appealing a ruling in favor of Cineplex by a Canadian court in December.
“We believe Cineworld’s share price will be guided by expectations related to the lawsuit, either until it reaches a conclusion or a settlement is negotiated,” said Peel Hunt.
The FTSE 100 lost 0.3 percent or 20.9 points to 7542.95, while the FTSE 250 fell 0.9 percent or 215.13 points to 22743.35.
Uncertainty about the threat of inflation continued to hamper market sentiment, as did uncertainty about interest rate hikes from several central banks. Oil companies were among the strongest risers in the blue chip index as the price of crude oil climbed back above $85 a barrel.
Shell gained 0.8 percent or 13.8 pence to 1822.6 pence, while BP added 1.3 percent or 4.8 pence to 388.7 pence, the highest level since March 2020.
Several bank stocks also rose in hopes of higher interest rates that would boost their profits. Standard Chartered rose 2.3 percent or 11.8p to 523.2p, while Lloyds added 1.9 percent or 1p to 54.97p and HSBC added 0.7 percent or 3.6p to 516.6p.
Also among the blue chips, B&M fell 5.3 percent, or 31.8 pence, to 564.8 pence after the billionaire brothers who had turned the discount chain into a nationwide chain sold more than a quarter of their shares in the company. . An investment company linked to Simon and Bobby Arora said it made £234 million by selling about 4 percent of B&M’s shares.
The Arora brothers bought what was then a struggling local supermarket chain in 2004 and transformed it. It is the second time the brothers have sold a major stake in the company since the IPO. In 2017, they traded a quarter of their shares in B&M on a payday raking in £215 million.
It was a horror show for small-cap health tech company Sensene, which saw its share price crash 71.5% or 54p to 21.5p after warning it would run out of cash in weeks. The company, founded by former minister Lord Drayson, is seeking a £6.4m bailout loan from various investors. However, if the deal falls through, it was “unlikely” that Sensene would continue trading after early February.