Star Wars powers Cineplex to record earnings
Latest Star Wars movie in theatres for last 14 days of 2015
The latest instalment in the Star Wars franchise helped to power Cineplex to record quarterly and full-year financial results.
The Toronto-based theatre chain said Tuesday its fourth quarter net income was a best-ever $76.8 million, more than double what it was a year earlier.
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Revenues in the quarter, which ended Dec. 31, jumped by almost 25 per cent to $407 million.
The entertainment company credited Star Wars: The Force Awakens for much of that boost. The movie debuted on Dec. 18 and quickly became one of the most popular movies the chain has ever shown.
The seventh instalment of the Star Wars franchise has gone on to become one of the highest-grossing films ever, with a worldwide box office tally of $2 billion US as of this past weekend.
Concession revenues in the quarter rose by 8.6 per cent to $5.58 per patron. With a record 20.4 million patrons in the quarter, there were a lot of profitable popcorn sales.
Business analysts say the combination of popular films and big markups at the concession stand are key to making money with movie theatres.
"If I can draw you with the film but then sell you these high markup items, this is where I make my real profit, and so it was with Cineplex this past quarter," Marvin Ryder, a marketing professor at DeGroote School of Business, told CBC News.
Cineplex said its full-year profit was a record $134.2 million, up 76 per cent from 2014.
Total revenues for the year rose 11 per cent to $1.37 billion.
The theatre chain said its 2015 results benefited from a number of top-grossing films, including Jurassic World, The Avengers: Age of Ultron, Minions and Furious 7.
Those four films, along with the latest Star Wars film, rank in the top 11 highest-grossing films of all time, Cineplex said.
The company said the weak economy isn't hurting its business. In fact, it may be helping.
"What we've seen normally in our business is that when there are recessions and the economy is down, people still want to escape the tough times, and this is a very reasonably priced treat that people can have," said Cineplex chief executive Ellis Jacob.
Diversifying its business
Cineplex said it wants to continue diversifying its business beyond the showing of traditional movies. Many of its theatres now show foreign-language films, special event screenings of live theatre and operatic performances.
It also plans on using its theatres to hold regional and national video game tournaments and it's opening up to 15 locations of The Rec Room, which offer casual dining, arcade and entertainment shows.
The chain operates 162 theatres with 1,655 screens.
Cineplex shares were up $2.07 to close at $48.75 on the TSX.
With files from The Canadian Press and the CBC's Peter Armstrong