Vue: National Minimum Wage and rising costs cuts cinema chain’s earnings
The releases of Wonka, Kung Fu Panda 4 and Dune: Part 2 failed to boost sales at cinema chain Vue during the first half of its financial year while its earnings were slashed.
The company said the falling admonitions and total revenue for the period were the result of coming up against the tough comparison to the performances of Avatar: The Way of Water, The Super Mario Bros. Movie and Guardians of the Galaxy Vol. 3 during the same six months in 2023.
In its half-year update, Vue revealed its admissions fell from 34.3m to 33.2m while total revenue declined from 3376.6m to £348m.
The chain’s consolidated EBITDAaL (earnings before interest, taxes, depreciation and amortisation and after lease expenses) was slashed from £23.3m to £3.5m in the period.
Vue added that the average ticket price was £5.71 in the six months.
In the period, Vue said that more family/children focused content was released, which lowers ticket prices, while fewer 3D films were priced at a premium.
The business added that while its gross margin levels remained in line year on year, a “softer” second quarter film slate and the impact of National Minimum Wage and cost inflation resulted in its lower EBITDAaL.
The half-year update comes after Vue reported a total revenue of £759m for the 12 months to 30 November, 2023, up from £606m, while its pre-tax loss narrowed to £73.7m from £253m.
In the UK admissions rose to almost 134m – an increase of 0.3 per cent – with gross box office receipts of just over £1bn.
Vue’s latest half-year results come after competitor Reel Cinemas reported a pre-tax profit of £424,007 in the year to 28 December, 2023, down from £2.4m. Its turnover edged up from £13.3m to £13.9m over the same period.
In October, cinema advertising giant Pearl & Dean said it was hoping that the expected commercial success of Wicked and Gladiator 2 will help it return to the black.