Cineplex profits drop despite 'Black Panther' success, will launch mobile orders

TORONTO _ The roaring success of “Black Panther” at the Canadian box office wasn’t enough to keep Cineplex Inc.’s attendance and profits from slipping in its latest quarter.

The Toronto-based company announced Wednesday that the hit superhero film accounted for 22 per cent of its box office revenue in the first quarter.

However, the number of moviegoers during that period dropped to 17.8 million, down nine per cent from the 19.6 million who headed to theatres in the year-earlier period. Cineplex’s profits fell to $15.2 million compared with $23 million a year ago.

The numbers are indicative of the struggle the movie industry has faced in getting film aficionados to consistently visit theatres amid the rise of streaming services such as Netflix.

In an effort to compete, Cineplex has been opening arcade and restaurant spaces with its Rec Room and Playdium offerings and plans to bring virtual golf restaurant Topgolf to Canada through an exclusive partnership with the company’s owners in the future.

It’s also heaped extra attention on its food offerings, rolling out an Uber Eats pilot, which allows customers to request delivery of popcorn and other movie theatre treats to their home. The company says the delivery service has proven to be a hit in university towns.

Cineplex has also expanded its food options, helping its concession revenue per customer grow to $6.09, up from $5.71 in the same quarter last year.

To keep up that momentum, Cineplex is toying with allowing moviegoers to place mobile orders for food before they arrive at a theatre to enjoy a film.

It isn’t available yet, but Cineplex CEO Ellis Jacob told the Canadian Press he thinks it will be offered by the end of the year to customers buying seats in the VIP sections of theatres.

“We are still perfecting it and we are very close on the VIP side,” he said.

Jacob also mentioned that Cineplex is close to announcing where its first Topgolf location will be built. He refused to reveal which cities are contenders for the sports-based offering that has been a hit in the U.S. and U.K., which have a combined 30 locations.

Jacob was also excited about the slate of films from successful franchisees that will hit theatres over the coming months. Headed to screens soon are “Deadpool 2,” “Oceans 8,” “Solo: A Star Wars Story,” “the Incredibles 2,” “Jurassic World: A Fallen Kingdom,” “Mission Impossible:Fallout,” “Mamma Mia: Here We Go Again” and “Antman and the Wasp.”

“As we have been saying for some time, we feel the recent box office has been typical in nature and the result of weaker film product,” said Jacob. “We are confident the second quarter film slate signals a positive turnaround in box office performance.”

Already in the quarter, he said “Avengers: Infinity War” had Cineplex’s largest opening weekend ever.

In the later half of the year, he said he had high expectations for the new Dr. Seuss movie “The Grinch,” “Fantastic Beats: The Crimes of Grindelwald” and the “Mary Poppins” reboot that will debut on Christmas Day.

However, he didn’t appear as enthusiastic about MoviePass, program that allows moviegoers in the U.S. to see one non-premium screening a day for US$9.95 a month, but has not debuted in Canada. Since its American launch a few months ago, the program has upset studios, who are wary of giving Movie Pass so much control and access to its industry in fear that the disruption might cannibalize profits.

“For us, we will evaluate the subscription model that works for both Cineplex and the studio,” he said.

“It is something we will continue to evaluate, but we are not rushing into doing something that will not provide meaningful benefits to both sides.”

What he has rushed to do is increase the company’s dividend, which rose to $1.74 per share on an annual basis, up from the current annual rate of $1.68 per share.

However, the company’s stock fell as much as five per cent Wednesday to $27.87 on the Toronto Stock Exchange after it reported sales totalled $390.9 million, down from $394.2 million and adjusted earnings of 24 cents per share, which slightly missed analysts’ expectations of 25 cents per share, according to data compiled by Thomson Reuters.