Cineworld looks to raise more debt after posting $2bn loss
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Cineworld is asking shareholders to suspend its borrowing limits and raise more debt after posting a record $2.3bn loss.
The cinema owner agreed a $213m convertible bond maturing in 2025, subject to shareholder approval, which it said would provide a “significant liquidity buffer” to see it through the reopening of its cinemas.
Closure of its theatres since mid March last year meant revenue slumped 80.2 per cent to $852.3m. The company posted a worse than expected $2.3bn operating loss for 2020, compared with a profit of $725m in 2019, with net debt ballooning to $8.3bn.
Cineworld plans to reopen cinemas in the US, its biggest market, from the beginning of April with UK screens reopening in May. The company predicted “pent-up demand for affordable out-of-home entertainment”, but cautioned that recovery was likely to be “volatile” given uncertainty around reopening restrictions, the amount of film content available and the desire of consumers to return.
Boohoo said it had “ceased doing business with a number of manufacturers who were unable to demonstrate the high standard of transparency required”. The online fashion retailer published a full list of its UK suppliers, as demanded by an independent report last year on its supply chain.
Compass, the world’s largest catering group, said it has continued improving margins in spite of subdued volumes. In a trading update ahead of results covering its half-year to March, Compass said group organic revenue was down 28 per cent in the second quarter versus 33.7 per cent in the first. Operating margin had jumped from 2.7 per cent to 4 per cent in the respective periods, it reported.
ITV said it has invested an initial £2m to take a minority stake in location service What3words, with an option to double its investment.
Funding Circle said trading had been strong since the start of 2021 but that lending volumes may slow in the second quarter as government-accredited loan programmes are wound down. The company posted a £106.3m operating loss for 2020, widening from an £84.7m loss the year before.
United Utilities said current trading for the fiscal year ending March is in line with expectations.
Martin Sorrell’s S4 Capital posted an £8.1m operating profit for 2020 versus a £3.8m loss a year earlier. The marketing services agency reported a good start to 2021 with like-for-like January gross profit “well ahead of budget”.
CMC Markets said in a trading update that its “entire business has continued to perform very strongly” since the start of the year, “with ongoing strength in the acquisition and retention of [contracts for difference] and stockbroking active clients and higher levels of client trading activity versus regular trading periods”. The financial markets bookmaker said full-year underlying profit for the year ending March will be “slightly ahead of the upper end of the current range of consensus”.
Plus500 named economist and former JPMorgan International chair Jacob Frenkel to succeed Penny Judd, its chair since April 2017, who plans to step down at the company’s annual general meeting.
Beyond the Square Mile
Chinese technology stocks dropped sharply on growing concerns of possible delistings from US exchanges and reported plans by Beijing to take control of companies’ user data. The Hong Kong-listed shares of Alibaba, the Chinese ecommerce group, were down 4.2 per cent by midday on Thursday, while those of internet business Tencent dropped 2.3 per cent. Shares in Baidu, the search engine group that debuted in the city this week, tumbled almost 9 per cent.
Italy’s elite football clubs are set for last-ditch talks on a €2.5bn media rights sale that will decide who screens Serie A football matches between 2021 and 2024. DAZN, a streaming service backed by billionaire Leonard Blavatnik, has offered around €840m a season for the contract, according to people briefed on the process. Comcast-owned Sky, the current rights owner, is prepared to pay just €750m a season to remain the competition’s main broadcaster. The vote will take place on Friday.
Two BlackRock ETFs face the prospect of having to sell as much stock of two energy companies as is typically traded in 40-50 days in order to comply with a dramatic index rebalancing. The US-domiciled iShares Global Clean Energy ETF and its European Ucits equivalent might also need to offload more than 10 per cent of the free-float market capitalisation of some other companies if the shake-up proceeds as proposed next month, according to Société Générale.
Essential comment before you go
A straightforward strategy of finding new customers then identifying more IT products for them to buy has delivered 15 straight years of revenue and profit growth at mail-order software business Softcat — and year 16 already looks to be in the bag.
The City has a long history of backing speculative mining ventures. It is time to switch focus to the potential digital gold mines of the 21st century and back more technology companies.
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