Cineworld’s share price drops on CEO retirement announcement

Cineworld’s share price drops on CEO retirement announcement Wednesday, November 20: Steve Wiener, founder and chief executive of Cineworld Group (LON:CINE), is to step down in March after 18 years with the business to “enjoy the fruits of his success”, the company said in a statement today. Cineworld’s share price declined by about 9.00p or 2.36 percent to 362.25p on the announcement.

Wiener, who has been in the cinema industry for 44 years, said: “In 1995 my wife Jenny and I wrote a business plan to start a cinema company. We expected over a five-year period to open five to seven multiplex cinemas and sell it on to one of the big operators… Today, in 2013, Cineworld is the number one cinema chain in the UK and has been for more than three years.”

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By 2004, when private equity group Blackstone bought out the business, the chain had 34 cinemas. Cineworld, which acquired a rival operator and listed on the stock exchange in 2007, now has 80 sites, including four out of the 10 highest grossing cinemas in the UK and Ireland.
The Financial Times quoted an unnamed analyst as saying: “It’s a bit of a strange announcement. Personally I would have thought that, given he’s been there 18 years, you would have lined up a new CEO to smooth any transition. It does make you wonder whether this is an unexpected decision.”

Cineworld’s shares have risen by almost 40 percent in the year-to-date. Wiener, who holds about two million shares, or 1.3 percent of the company’s outstanding stock, has said he does not intend to sell his holding.
Cineworld last year added 21 venues to its existing network after it acquired the independent art-house chain Picturehouse for an all-cash, ₤47 million deal. The chain was subsequently forced to sell three cinemas due to a ruling from the Competition Commission.

According to the Financial Times, Cineworld held a 27.2 percent market share in the first half of the year. The big three operators – Cineworld, Odeon & UCI and Vue – control about 70 percent of the UK cinema market.
**Cineworld to open venue at Potteries shopping centre**
Cineworld will open a 1,100 seat, nine-screen cinema in a 60,000 sq. ft. extension at the Potteries shopping centre located in Stoke-on-Trent, Staffordshire. Development is expected to start early next year with completion set for the middle of 2015. The landlord is the property group Intu (LON:INTU).

A spokeswoman for Cineworld said: “As we continue our UK expansion positioning ourselves in key locations across the country is key. With its unique positioning in the Stoke-on-Trent market Intu Potteries provides us with the perfect opportunity to access an under-served market.”

**Analysts on Cineworld**
Nplus1 Brewin gave Cineworld’s shares a ‘hold’ rating and reduced its price target to 376.00p from 402.00p in a report sent to investors last month.
One investment analyst rates Cineworld as a ‘sell’, five give it a ‘hold’ rating and three are calling it a ‘buy’. The stock presently has a consensus rating of ‘hold’ and an average price target of 373.45p.
**As of 10.12 UTC buy Cineworld shares at 366.00p.**
**As of 10.12 UTC sell Cineworld shares at 365.00p.**
Trade these shares now through Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.

By Anton Aleksandrov
Anton is a freshly graduated economist from the States with passion for the world of finance. He is one of the more recent additions to the iNVEZZ journalist team and has a particular interest in gold and everything else that shines. When not submerged in the most recent economic news, Anton likes to lurk in tech forums and get into arguments over what’s hip and what’s square.
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