Big Screens, Recliners and Popcorn Drive Amalgamated Holdings' Solid Fiscal 2013 Result

Amalgamated Holdings' fiscal 2013 net profit after tax of AUD 82.9 million is in line with our forecasts; the 9.8% increase in an environment of constrained consumer spending is admirable. Weakness in the hotel segment, reflecting lower demand in mining states and the launch of QT in Sydney, was offset by continued growth in the cinema segment. Despite relatively flat box-office takings, cinema earnings before interest and tax, or EBIT, increased 11.5% to AUD 60 million. Without a record-breaking release like Avatar, Amalgamated continue to drive growth by improving the service offering. The successful strategy of rolling out digital projectors, theatre refurbishments and new gold class experiences are helping drive attendance numbers and support increased ticket prices and merchandising revenue. No change to our AUD 7.50 fair value estimate. Reinvestment and expansion in cinema and hotel assets, as well as an eventual improvement in consumer and business confidence, underpin our forecasts for modest long-term earnings growth.