Marauding killer dinosaurs and a softcore sadomasochist romance have helped Odeon & UCI cinemas to a £14.5m profit in the first six months of 2015 – a turnaround from last year’s £40m loss.
The chain, which has 243 cinemas across Europe, reported sales of £349m, up 18% on last year, boosted by blockbuster films including Jurassic World and Fifty Shades of Grey.
The fourth instalment in the dinosaur disaster series is one of the UK’s biggest-grossing films of all time and has been Odeon’s number one in the UK, Spain and Germany this year. In second place was the film adaptation of EL James’s erotic novel, which proved a hit with cinemagoers despite scathing reviews.
While a crop of popular films have drawn people to cinemas, Odeon is also taking market share from its rivals. Overall cinema attendance in Europe was up 7%, but Odeon reported a 14% rise in audiences, led by a strong performance in the UK, the firm’s biggest market.
Its chief executive, Paul Donovan, said Odeon had been sharpening its act by improving customer service, increasing marketing, and upgrading its website to allow smoother booking from smartphones and tablets. In April, the chain scrapped online booking fees in the UK.
Odeon also stepped up promotion of its food and drink and introduced a sweet and salty variety of popcorn, factors that have helped to increase non-ticket spending by 19.4%. “A lot more people are buying more coke, more nachos, more popcorn, more ice-cream, and wine and beer as well,” Donovan said.
Away from the big screens, Odeon has cut its debt to £435m, a reduction of £31m on last year.
The positive performance contrasts with a lacklustre 2014, when the football World Cup and a dearth of blockbuster films with mass appeal kept people away from cinemas.
The swing back to profit may help Odeon’s current owner, the private equity firm Terra Firma, achieve its goal of selling the chain.
Terra Firma’s boss, Guy Hands, told Reuters in February that he hoped to sell Odeon, which has been valued at about £1bn, towards the end of the year. He put the business up for sale in 2013, but later pulled the plug on the advice of Goldman Sachs.
The upbeat financial reviews are set to continue, with a slate of blockbusters due for release in the autumn, notably the latest instalments of the Hunger Games, James Bond and Star Wars franchises.
The second half of 2015 will be much stronger than last year, said Donovan.
Odeon’s first-half performance was testament that cinema would not be defeated by the rise of streaming services such as Netflix, he said. “The long-term future of cinema is something that we look forward to with great confidence.”
