Growth in cinema attendances on the back of releases such as Harry Potter and the Order of the Phoenix prompted Cineworld to forecast 2007 earnings at the top end of expectations, adding that it had increased its UK market share.

Cineworld, which listed in May last year, said 2008 had started strongly and that the outlook was promising, with upcoming film franchises including Batman, Harry Potter, Star Trek, James Bond and Indiana Jones.

Shares in Cineworld tumbled last month after it revealed ITV’s Carlton Screen Advertising wanted to renegotiate its screen-advertising sales contract, worth about £20m a year.

Friday’s trading update, in which Cineworld said talks with CSA continued, saw the shares recover 23¼p, or nearly 22 per cent, to 130p. The group floated at 170p and peaked in the summer at 220p.

Box office takings at UK cinemas were up 6.9 per cent, according to Nielsen EDI, and Cineworld admissions at continuing sites rose 4.8 per cent.

Its market share rose from 23.5 per cent to 23.7 per cent, behind Odeon, the market leader. Consensus earnings forecast for 2007 earnings before interest, tax, depreciation and amortisation is £51m.

Cineworld opened a new outlet in Oxfordshire last year, bringing its estate to 73 with 758 screens. It plans to add two more in 2008 – in High Wycombe and Haverhill – and a further two are scheduled to open next year.

After signing a deal with Read-D to introduce digital technology to some of its screens, Cineworld screened Beowulf in 3-D in November and hoped to release other films in this format, claiming its impact would compare with the move from black and white to colour. Steve Wiener, chief executive, said: “The deal will revolutionise the cinema experience for moviegoers.”