Village Roadshow looks to piracy blocking and new cinemas to boost flagging earnings
New cinemas, a crackdown on piracy and end of year blockbusters are key parts of the turn around plan Village Roadshow has presented to investors ahead of a capital raising to address its crushing debt levels and indifferent financial performance.
The company, which has seen its share price collapse from $4.00 to $2.18 this year, blamed a lack of box office blockbusters in the first half of 2018, a changing film market and a poor performance of titles for the lacklustre results of its distribution and cinema arms.
Part of addressing the changing film market will be a focus on shoring up its distribution business with ongoing initiatives to reduce piracy along with an increased implementation of site blocking.
In 2015, the Senate passed amendments to the Copyright Act allowing rights holders to obtain blocking orders against piracy websites.
Along with the increased focus on piracy, Village Roadshow said the distribution arm will be looking at fewer acquisitions of expensive overseas productions and an emphasis on local productions.
The company also told investors it expects the second half of 2018 will be better for cinema receipts as blockbusters including Aquaman and remakes of Avengers, MamaMia, Aladdin and Mary Poppins to hit the screens.
Cinemas are also to be refurbished with a greater focus on premium Gold Class and Vmax seating along with the child focused V-Junior concept. In the longer term, the company is planning to launch new cinemas in Sydney’s Green Square and Edmonson Park, Melbourne’s Clayton and Inaloo in WA.
The company’s $50m capital raise it announced yesterday will add to the $37m from the sale of the Sydney Wet n Wild theme park in an effort to reduce its $320m of debt. In recent years Village Roadshow has struggled with its debt load, selling various assets in Australia and East Asia as to halve its debt over the past financial year.
Shareholders will be offered stocks on a 5 for 26 basis at a price of $1.65 per share, the stock closed last week at $2.18. Co-CEOs, Graham Burke and Robert Kirby have also agreed to a 25% pay cut as part of the company’s cost reduction program.
“blamed a lack of box office blockbusters in the first half of 2018”
What are they talking about?
Avengers Infinity War?… Deadpool 2?… Black Panther?
Doesn’t seem like a lack of blockbusters. In fact it’s unusual to have such massive films hit before the start of June.
Piracy? Lordy! What year is this?!?
Have to agree with Hank on this one. Movie-goers have been spoiled for choice at the cinemas recently. If there’s a hindrance to these companies at the moment, it’s ticket prices (up to $25 for a standard ticket?), and candy bar prices. I don’t care who you are, $7.50 for a bag of M&M’s and $9 for a Frozen Coke is highway robbery.
And they can’t say it’s due to wages because every time I go to the movies I’ve only ever seen a grand total of 3 staff – one at the box office (as I scan my online order), one at the Candy Bar, and MAYBE one ripping tickets. If Village can’t turn a profit it in the current climate, they have internal issues.
Village has been trotting out the line that the next half of the financial year will be better because of huge blockbusters for over 2 years now. Every six months, like clockwork. And every six months, they have the same excuse as to why they failed to meet expectations.
And piracy is WAAAAY down…so their excuses are pretty poor
Source:
https://www.screenaustralia.gov.au/sa/media-centre/news/2018/02-27-report-australian-trends-online-on-demand
“remakes of Avengers, MamaMia, Aladdin and Mary Poppins to hit the screens.”
I think you’ll find Avengers and MammaMia are sequels and Aladdin and Mary Poppins are remakes.
I think they mean the remake of the 1960’s ‘Avengers’ series which was already adapted as a dreadful 1998 film with Ralph Fiennes and Uma Thurman.
Spot on for MamaMia though.