Premium cinema chain hit by shock box office drop

A sudden slump in ticket sales has forced a leading cinema chain to rethink its forecasts.

Upmarket cinema chain Everyman is set to fall short of sales and earnings targets as it blamed poor box office in recent months.

Shares in Everyman Media Group slid by as much as 20% in early trading as a result.

The chain, which runs 49 cinemas across the UK, said box office performance in the fourth quarter of the year has been “weaker than anticipated”.

Industry data indicated that UK box office revenue in October was down 9% year-on-year, and as much as 33% lower in November.

Everyman also flagged that it is continuing to operate in a “challenging economic environment”, with pressure on consumer spending.

It told shareholders that it expects revenue “of no less than £114.5 million” for the year to January 1, and predicted EBITDA (earnings before interest, tax, depreciation and amortisation) of at least £16.8 million.

These would both represent an increase on last year, but in September Everyman said it was on track to meet forecasts of £121.6 million in revenues and £20 million in EBITDA.

Alex Scrimgeour, chief executive of Everyman Media Group, said: “Notwithstanding the industry-wide challenges, to date this has been a year of progress in which we have achieved growth across our core operating metrics, delivering increased revenue, EBITDA and customer spend per head, as well as strong membership growth and expanding market share.

“The continued growth in customer satisfaction reflects our commitment to delivering the premium experience across our estate, and with our market leading position, we remain confident in the long-term growth opportunity in the premium cinema sector.”

The group said it expects to release a further trading update with amended guidance for future years next month.