Australian cinema chain hopes for a much needed boost from Bond

21-Oct-2006 • Casino Royale

The new James Bond movie is helping set the scene for an encouraging outlook for Greater Union-owner Amalgamated Holdings Ltd this year, despite soft first quarter trading conditions - reports TheAge.

The cinema and hotels operator has reported a seven per cent increase in earnings for the first three months of 2006/07, to a pre-tax profit of $19.9 million.

Managing director David Seargeant said the result was driven by a strong performance by Amalgamated's hotel business, which includes Rydges Hotel & Resorts and Thredbo Alpine Village, and a great improvement in its German cinemas.

"With a relatively soft film line-up and very disappointing natural snow conditions at Thredbo, the result is particularly pleasing," Mr Seargeant told the company's annual general meeting in Sydney.

But blockbuster movies like The Devil Wears Prada had led to an improvement at the box office in October, and a strong line-up of films, including the new 007 flick Casino Royale, was also making for an encouraging outlook, he said.

"The outlook for the remainder of the year is encouraging, with a strong line-up of films over the Christmas holiday period and a continuing positive trading environment for our hotels and resorts," he told shareholders.

"The new Bond film is sounding very, very exciting, and I think whenever you get a new Bond, there's always a heightened interest."

Amalgamated will also screen the George Miller-produced Australian film Happy Feet, which is due to open on Boxing Day, and sequels like Shrek 3, Pirates of the Caribbean 3 and Ocean's Thirteen, over the American summer.

Amalgamated delivered a 30.3 per cent increase in net profit to $59.4 million last financial year but declined to provide specific profit guidance for fiscal 2007.

Before one-off items and tax, it made a record net profit of $73.7 million in 2005/06, up 13.5 per cent.

During the year, the company bought Sydney's landmark Gowings building and Mick Simmons building, alongside the historic State Theatre complex on Market Street, a property it already owned.

Asked about the company's plans for the site, chairman Alan Rydge said: "The opportunity we are faced with now, I think, goes way beyond just merely extending the wings of the State Theatre.

"Our review that we're undertaking, looks at the whole totality of that site now and the best use ... of the retail sector, of the commercial sectors, and of course we'd look at the use of the State Theatre component."

One long-standing shareholder also queried why the company no longer advertised its movie directories in the Fairfax-owned The Sydney Morning Herald.

Mr Seargeant said it was a cost decision, as sales of online tickets grew, which would be reviewed if market share was affected.

"So, therefore we need to drive down our costs in traditional media, and that's purely and simply why we elected to go with The (Daily) Telegraph on an exclusive basis - we got a much better deal from them," he said.