Everyman cinema group sits in a niche of its own
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Make no bones about it, Everyman cinemas are expensive. The Aim-listed company’s first location, in the well-heeled north London neighbourhood of Hampstead, is a former theatre that originally converted to a cinema in 1933. Here, a standard price ticket costs £16.90 on a Saturday night.
Its premium seats — the armchairs and sofas that are an Everyman feature — are £19.90 each, more than double the average entry price across the UK last year, according to data from the UK Cinema Association.
That does not include the £1.75 online booking fee. Optional extras include “a film’s worth of rum and ginger for two” (£27.00) and a “beef dog” complete with onions, ketchup and American mustard (a very reasonable £6.50). Film buffs can sign up for a year of unlimited visits with a guest for just £600 per year.
Londoners tempted to gripe about the cost of a night at the movies do have other options. Cinema-goers could pop across the river to south-east London’s Peckhamplex, which, at £4.99 a trip, is one of the cheapest ways to watch a film on the big screen.
Despite the expense, Everyman’s audiences have swelled. They climbed almost a third in 2017 alone, from just shy of 1.7m in 2016 to more than 2.2m. That represented a slowdown from the previous year, when Everyman boasted annual admissions growth of 40 per cent. The company reported a compound annual growth rate in its revenues of 37 per cent between 2013 and 2016, earning it a spot in this year’s FT 1000 list.
From the single Hampstead site, Everyman added a clutch of others in affluent London outposts with its 2008 acquisition of the mini-chain behind Islington’s Screen on the Green. Ventures into Leeds, Birmingham and Bristol helped it extend beyond the capital, taking it to 22 sites and 69 screens by March.
The recent weakness in high street retail has helped spur the expansion, says management. Landlords are more eager to do deals on rent and to secure anchor tenants like Everyman that will drive footfall to nearby shops and restaurants.
Another five Everyman sites are due to open before year-end. If eight more in the pipeline go through as planned, then by the end of 2019 it will have more than doubled its locations within four years.
Core to Everyman’s pitch is not film but a plush venue. “First and foremost, we are about doing cinema really, really well, and about getting people to fall in love with our venues,” says chief executive Crispin Lilly.
He adds that he does not mind what films customers want to watch. “If they choose to come and see Isle of Dogs or something very quirky and independent . . . then terrific . . . If it’s Black Panther or Beauty and the Beast, fabulous. I’m really not precious about that. I just want people to come back to the cinema.”
Phil Clapp, chief executive of the UK Cinema Association, says central to Everyman’s growth has been its ability to raise occupancy of its cinemas while cutting capacity to give venues a more exclusive feel. “There is a growing audience who want a more personalised, high-end experience,” he says.
But stable profits have been harder to come by. New venues either mean fit-out costs when they are located in “grey box” locations such as Everyman’s site in London’s King's Cross — a brand-new building at the centre of the regeneration area — or refurbishment expenses where they are neglected former cinemas such as the 1920s-era Whiteladies Picture House in Bristol.
Still, the group reported a £1.6m pre-tax profit in 2017. It has consistently increased the average box office ticket price, even though much of its expansion has been outside London, where admission is typically cheaper.
Everyman has the indulgence of a relatively stable shareholder base. Funds backed by the Lewis Trust Group, the owner of River Island, have held around 20 per cent of Everyman since its initial public offering in late 2013. About another fifth of its shares are held by the families of management and other long-serving directors.
The cinema industry faces an uncertain future, despite UK admissions having held up better than those in the US in recent years. “It’s a mature market,” says Jeffrey Harwood, an analyst at brokers Stifel, though “not a declining one”. The rise of streaming and pressures on UK household income pose risks.
At 2.1 per cent of the total UK box office in 2017, based on data sourced by the company from ComScore, Everyman is a niche player in a market dominated by global multiplex operators Cineworld, Vue and Odeon.
Mr Lilly defends his company’s high-end pitch. “Value for money is important. But value for time is actually even more important.”