Cinema Gains Momentum but Earnings Growth Will Be Difficult in Fiscal 2014 for Amalgamated Holdings

Amalgamated Holdings reported a soft first-half fiscal 2014, which we expected following the weak first-quarter update last November. Net profit after tax, or NPAT, for the half declined 16% over the prior year period with cinema exhibition in both Australia and Germany suffering from a weak line-up, despite signs of an improvement in the second quarter. Germany was particularly impacted, suffering a 36% decrease in earnings before interest and tax, or EBIT, for the half, while Australia grew EBIT 15%, on the back of increased advertising revenue and cost savings. We expect some turnaround in the second half on the back of a stronger schedule of new film releases, however, NPAT for full-year fiscal 2014 is likely to be down on fiscal 2013.