Kiwis still flock to the movies, Event Cinemas makes a profit despite online competition

Monday, 29 August 2016

The Taika Waititi film, Hunt for the Wilderpeople, was the second highest (NZ$11.6m) earning movie at Event Cinemas in NZ this year. Star Wars: The Force Awakens topped the list with a revenue of NZ$14.6m.

New Zealand moviegoers are still flocking to Event Cinemas for international blockbusters such as Star Wars and homegrown movies such as Hunt for the Wilderpeople.

While some cinemas are slashing ticket prices to attract consumers, Event Cinemas has not seen a decline in patronage and its profit has increased by almost A$2 million (NZ$2.08 million).

The Australian-owned cinema, which a Stuff survey showed as one of the more expensive theatres to catch a flick, has recorded a profit for the year ending June 2016.

Event Hospitality & Entertainment recorded a net profit of A$130.2m - an increase of 19.6 per cent on last year.

**READ MORE:

Australian owned Event Cinemas made a profit of A$10.5 million from its Kiwi operations - an increase of 27 per cent on last year.

* Survey shows almost $10 difference in ticket prices, depending on cinema

* Wellington's Reading Cinemas Courtenay cuts its standard prices by $6 a ticket**

The company has 19 cinema locations in New Zealand, with a total of 132 screens and is currently ranked the eleventh largest cinema group globally.

In June, Event bought the Downtown Cinemas business, which has 15 cinema screens across three locations in Palmerston North, Havelock North and Paraparaumu.

Event Group managing director David Seargeant said each of its major businesses contributed to the improved profit.

The cinema business was also boosted by a strong film line-up that included Star Wars: The Force Awakens, the surprise hit Deadpool and the Bond film Spectre, he said.

Its Kiwi cinemas brought in a profit before interest and tax of A$10,508,000, an increase of 27 per cent over the previous year.

The top titles included Star Wars: The Force Awakens (NZ$14.6m), Hunt for the Wilderpeople (NZ$11.6m), Spectre (NZ$5.9m); The Hunger Games: Mockingjay Part 2 (NZ$5.1m) and The Jungle Book (NZ$5.m).

Box office revenues for Event's top five earners brought in a combined total of NZ$42.2m this financial year, compared to NZ$34.8m in 2015.

- Stuff survey June 2016

Event's financial report says the improved result was mainly from improved merchandising revenue and cost saving initiatives.

'Similar to the Australian circuit, the New Zealand circuit continues to pursue market share, particularly through the Cinebuzz loyalty program.'

While Event had no control over the general audience appeal of available films, it would provide consumers with a 'superior experience'.

It also planned to boost revenue from expanding its number of cinemas including bigger screens, refurbishing existing cinemas and improving its food and drink offering.

The first of Event's new cinemas will be in the Tauranga Crossing shopping centre, which is currently being built in the Tauriko area.

Construction is underway on the cinema, which is part of the second stage of the shopping centre development that is expected to open in September

The cinema looks set to open its doors in mid-2018 and will include five cinemas, a big screen Vmax cinema and new sound systems.

The company believed industry issues such shortening of the release window of film to other formats such as DVDs, the increase in piracy and alternative film delivery methods such as internet content and video on demand had the capacity to impact its strategy.

As well as Cinemas, Event is also a major hotel operator. In New Zealand its assets include the QT Queenstown hotel development and the acquisition of the Museum Art Hotel in Wellington, which will be rebranded as QT Museum Wellington in the second quarter of the current year.