Action flicks drive Event Hospitality profits up 43pc

The action flick silver screen revival has seen cinema and hotel operator Event Hospitality & Entertainment record a 43 per cent rise in revenues to $987.8m.

The action flick silver screen revival has seen cinema and hotel operator Event Hospitality & Entertainment record a 43 per cent rise in revenues to $987.8m.

The company said its entertainment business benefited from strong pent-up demand, underpinned by the release of two films – Top Gun: Maverick and Spider-Man: No Way Home.

It expects the release of Avatar: The Way of Water to underpin the cinema divisions performance over the key holiday trading period in December and January.

Event, which runs a chain of hotels, said its operations at Thredbo had also recovered strongly after a Covid-19 outbreak crimped the 2021 ski season.

Overall, Event’s earnings rose from $111.1m to $138.3m for the 12 months to June 30, and net debts fell to $210.4m – below pre-pandemic levels.

The Covid-19 pandemic was particularly tough on the hospitality industry, with restrictions limiting the number of patrons at cinemas and border closures forcing many hotels to run empty. The Wall Street Journal on Friday reported that Cineworld, the owner of the second-largest cinema chain in the US, was preparing to file for bankruptcy. Its main competitor, AMC, has raised more than $US2.2bn ($3.2bn) in equity to stay afloat.

Event, in its financial disclosures, said despite restrictions in place for much of the first half of the financial year, the release of long-delayed blockbuster movies had increased box office revenues by 83 per cent.

Hospitality and cinema giant Event has posted a strong rebound from its pandemic low. Picture: James Gourley/NCA NewsWire

The top 10 films grossed $370.5m for the period, 103 per cent higher than the 10 biggest movies in the prior financial year. Top Gun: Maverick, released in May, grossed $87.7m for the company – making it the third highest grossing film in Australian history. Spider-Man: No Way Home, released in December, grossed $81m.

Event chief executive Jane Hastings acknowledged the first half of the last financial year had been challenging for the group, but was upbeat about current market trends and the upcoming summer holiday blockbuster release season.

“The immediate return of customers to cinemas has been underlined by the strong performance of Top Gun: Maverick and Spider-Man: No Way Home,” she said.

“While there are no blockbuster releases in August and September, we are looking forward to the release of ‘Avatar: The Way of Water’ in December. If (these) key blockbuster titles perform well, we will benefit from the yield growth delivered by our new business model.”

The company said it had exceeded its targets for the divestment of non-core hotel assets with the settlement of the sale of The Miller Hotel in July for $75m.

“We are pleased with the premium realised on our non-core property divestments and our ability to retain North Sydney and Bankstown hotels under management agreements,” Ms Hastings said. “Our circa $2b property portfolio is now more focused on quality assets aligned with our strategy to own and develop key city assets that support our operating business.

“We have continued to progress our 525 George Street development with the stage two development application lodged in May 2022, and are well advanced on the upgrade of key hotels including Rydges Melbourne and QT Gold Coast.”

Despite the strong domestic showing, Ms Hastings remained coy on the return of international travellers to pre-pandemic levels, and warned headwinds such as the rising cost of energy and insurance, and inflationary pressures would remain challenging in the short term.

Shares in Event fell 1c to close on Monday at $15.49.