| ‘Magnificent’ management team effort shows what is possible for Odeon – the group so many wrote off as yesterday’s UK cinema business. Revenues are up 10% in 2016 |
Only 18 months ago the fortunes of Odeon & UCI had apparently hit an all time low and predatory private money groups were doubtless snapping up its debt at significantly discounted prices ready to either carve the old lady up or win on the recovery.
In parachuted ex CEO of Eircom Paul Donovan and the fortunes of this beleaguered icon of UK cinema were seemingly transformed overnight.
This was not just a case of being ‘saved by the bell’ – i.e. the amazing 2015 film slate. This was far more than that, as site-on-site Odeon performances were up 25-30% and more – way above the increments gained by competitors over the same period.
There is little doubt that this turnaround will provide rich fodder for business analysts looking to study a text book case of how to bring a business back from the brink.
Odeon is now clearly prepped and ready for sale – likely not at the inflated values that Terra Firma’s high profile boss Guy Hands seems to have in mind but it’s well away from being the basket case of 2014.
It still suffers from acute underinvestment site-by-site over the last fifteen years and a weird array, from creaky old heritage sites through to grand megaplexes and a wide variety of offers in between, which rapidly turns off many buyers initially attracted to the current earnings before interest, taxes, depreciation and amortisation (EBITDA).
There is something truly impressive, however, in the fight that the management team have put up in this short two-year period (wouldn’t it be great if that core management team numbered seven – because they would indeed deserve to be known as ’Magnificent’)
Terra Firma may not get quite the price it would like to get but no doubt the holders of Odeon debt will be breathing significant sighs of relief.
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