Harry Potter to lift Cineworld as profits flat for six months

Harry Potter is to see good growth in Cineworld revenues later this year as a first half marred by World Cup spending, put profits on level terms compared with last year's £11-12 million.

Earnings for the cinema was up slightly at £24.4 million versus £23.2 million in 2009 and net debt was also reduced at £115.5 million versus £121.4 million a year ago.

The company is looking forward to second half of the year which sees a number of strong 3D releases including 'Harry Potter and the Deathly Hallows - Part 1' and 'The Chronicles of Narnia: The Voyage of the Dawn Treader'.

Cineworld said that the profits attributable to shareholders was £8 million and raised its dividend by 0.2 pence for the half year to 3.4p a share.
Highlights included Avatar - grossing £90 million, Alice in Wonderland - £40 million and Toy Story 3 - still to complete - all of which attracted premiums due to them being in 3D.

The company hopes its 77 cinemas will continue strong takings as a further series of blockbuster 3D films is to come - offsetting a first half which saw admissions fall during FIFA's World Cup 2010.

Cineworld shares - which have risen almost 42 pct since the start of the year - face pressure to continue and fell 3.11 pct on today's news.

Spending on popcorn and other retail items was £1.71 per visitor reflecting a largely unchanged number of users not buying anything on their visits as consumers remain spend-thrify.

Overall spending was an average of £5.64 per admission compared with £5.30 last year, the cinema said.

The shares are were upgraded from hold to buy at Altium Securities in March this year, who say the group has posted a "good set of results despite the impact of the Football World Cup" noting they have started the second half strongly according to their statement.

Evolution Securities on the other hand maintained a 'buy' stance but lowered earnings forecasts after admitting the group faces a 'higher tax charge'. Earnings per share forecasts were lowered from 17.1 pence to 16.7.