Everyman Cinema Reports Increased Losses Despite Revenue Growth
Why we think this is bad
While Everyman Cinema has shown strong revenue growth and increased market share, the financial results reveal concerning trends. The company's operating loss has significantly widened to £3.4m from £0.1m, and the loss before tax has nearly doubled to £10.2m. Despite a 17.9% increase in revenue and growth in admissions, average ticket prices, and food & beverage spend, these improvements have not translated into profitability. The increased losses, particularly in the face of revenue growth, suggest underlying cost pressures or operational inefficiencies that are eroding the company's financial performance. Although there are some positive indicators such as reduced net debt and increased cash balance, the overall financial health of the company appears to be deteriorating, which is likely to concern investors.
Key Points
- Revenue increased 17.9% to £107.2m
- Operating loss widened to £3.4m from £0.1m
- Loss before tax increased to £10.2m from £5.5m
- Admissions up 15% to 4.3m
- Market share increased to 5.4% from 4.8%
- Average ticket price up 2.8% to £11.98
- Food & Beverage spend per head up 3.4% to £10.64
- Membership base grew by 65%
- Net banking debt reduced to £18.1m from £19.4m
- Cash and cash equivalents increased to £9.9m from £6.6m
- Three new venues opened during the year
- Positive momentum reported in Q1 2025
- Expectation of improved film slate for 2025 and beyond
Summary
Everyman Cinema's preliminary results for the year ended 02 January 2025 show a mixed financial performance. While the company achieved revenue growth of 17.9% to £107.2m and increased its market share to 5.4%, it also reported significantly wider losses. The operating loss increased to £3.4m from £0.1m, and loss before tax rose to £10.2m from £5.5m. On a positive note, admissions grew by 15% to 4.3m, and the company saw improvements in average ticket price and food & beverage spend per head. The company's membership base grew by 65%, indicating strong customer engagement. However, cost pressures, particularly from increased National Living Wage and higher utility costs, have impacted profitability. Looking ahead, Everyman expects a more consistently-phased film slate in 2025 and plans to continue its measured expansion. The company has reduced its net banking debt to £18.1m and increased its cash position to £9.9m. Broker Canaccord Genuity maintains a 'Buy' rating with a target price of 200.00p, suggesting potential upside despite the current challenges.