Cineworld’s share price has had a shocker over the last 12 months. This time last year the shares had managed to rally as high as 120p over-optimism that it would see a decent rebound in revenues as cinemas reopened, with the shares now below 40p.

That optimism has largely disappeared, although we have seen some improvement in revenues in the last six months. Its H1 numbers saw revenues of $292.8m, well below the same period a year before due to the Covid lockdowns of early 2021, while in H2 we've seen a solid rebound of just over $1.5bn.

If this is replicated over the next 12 months then it’s reasonable to assume that this fiscal year could see full-year revenues top $3bn, although that will still be some way short of 2019 levels when revenues were $4.37bn.

Admissions in H1 fell to 14.1m, from 47.5m, a reduction of 70.3% from the same period in 2020, which saw the chain experience similar Covid restrictions to its business, albeit on a shorter time frame.

In January, in a much more encouraging sign for today’s full-year numbers, Cineworld reported that Group revenue in December came in at 88% of 2019 levels, up from 56% in November despite the various restrictions that were imposed because of Omicron. Its US operation led the way posting 91%, and the UK at 89% of 2019 levels.

Today’s preliminary numbers showed full-year revenues improve to $1.8bn, a rise of 112% from last year's $852.3m, while admissions rose by 75.2% to 95.3m. This helped the company post an operating profit of $15.8m, however, that’s small comfort when compared to all its other liabilities.

Losses after tax came in at $566m, a significant improvement from last year’s $2.65bn, the outlook still looks challenging despite managements optimism.

The number of admissions at 95.3m came in below market expectations, as was full-year revenue when compared to sector peer AMC Entertainment.

The US remains Cineworld’s biggest market and here we can see how much further there is to go on the admissions front. In 2019, US admissions were 177.3m, while over the last 12 months they came in at 56.2m.

In the UK, total admissions in 2019 were 48.2m, while this year they came in at 18.2m.

From these numbers alone Cineworld still has some way to go to get back to those sorts of admission levels at a time when the economic landscape in both the UK and US is likely to be challenging when it comes to the cost of living.

The main headwind remains its recent court case with Cineplex which it lost. The Ontario court ordered Cineworld to pay Cineplex damages C$1.23bn for lost synergies and C$5.5m for lost transaction costs. Cineworld has appealed, which is a no-brainer given its already high current debt levels, but one has to question where they will find the money if they lose. The group has made no provision for any liability in respect of the judgement in a move that merely serves to highlight the chain’s precarious financial position.

The silver lining for this year is a strong upcoming film slate, which includes a number of new blockbuster titles including Top Gun: Maverick, Jurassic World: Dominion and a new Fantastic Beasts film, which should offer a significant pick up in revenue, with the hope that any further Covid disruption remains in the rearview mirror.

All of this is very welcome, however with debts of $8.3bn, a lot will need to go right for the company to be able to see a sustained improvement in its finances and a reduction in its overall debt levels.

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