Cineworld

Cinema chain Cineworld (CINE) has grown sales to £163.6m over the six months to June driven by the success of films such as Harry Potter: The Deathly Hallows.

The fully-listed group saw profits before tax sink from £11.8m to £6.9m due to a number of one-off costs while sales grew 1% from £162m to £163.6m. Adjusted EPS stood at 6.6p (2010: 6.8p) while the interim dividend rose from 3.4p to 3.6p a share. Net debt stood at £100.7m as compared to the £115.5m reported last year. The average ticket price per person fell from £4.93 to £4.91.

The sales were bolstered in particular by the performance of the final Harry Potter film, one of the highest grossing films of all time. Other notable titles released over the period included The Hangover part II, Pirates of the Caribbean: On Stranger Tides and Thor. Cineworld also enthused that it had maintained its UK Bollywood market share of over 55% with titles over the period including Yamla Pagla Deewana, a comedy about three Sikh brothers.

Looking forward the company noted that its Unlimited Card program- which allows those that use it to watch unlimited films at certain times of day had grown its subscriber base from 245,000 to 270,000 while its new luxury cinema concept 'The Screening Rooms' offering a champagne service and leather seating was described as having 'very positive' responses from customers.

Analysts at Evolution are forecasting pre-tax profits of £37.4m (EPS: 19.1p) on revenue of £356.1m for the year to December 2011. In 2012 profits of £41.5m (EPS: 21.2p) on sales of £381.9m are pencilled in.

Recommended by Growth Company Investor at 207.5p last September the shares currently trade at 187.5p. The company has suffered from the fact that the 3D revolution has not been a resounding success in the film industry, with consumers seemingly unwilling to pay significantly more to watch a film in 3D. On the other hand the company has many offerings for budget-conscious consumers such as its card system. Hold.