Shares of theatre chain operator AMC Entertainment (US:AMC) sank -7.9% on Monday following management’s fourth quarter business update to investors as woes jittered across the street about further potential shareholder dilution.
AMC Entertainment has increased one rank this week and is currently the second most popular stock held by retail investors. The APE preference shares are also quite popular, rising eight ranks this week to twelfth on the leaderboard.
During the investor update, management told investors that AMC raised $153.2 million of cash liquidity for the balance sheet by selling 123.2 million of AMC’s preferred equity units (US:APE).
AMC reportedly used a portion of the proceeds to buy back about $30.7 million of the principal amount of the 2026 senior subordinated notes at a ~60% discount and about $5.25 million of the 2027 senior subordinated notes at a ~70% discount.
In total, AMC has reduced the principal amounts of its debt balance by about $107 million bringing total debt reduction over 2022 to around $180 million.
Liquidity at the close of 2022 next week is expected to be between $725 to $825 million, including a $211 undrawn revolving credit facility.
In addition to the capital management, AMC announced that they had acquired the 13-screen Arclight Cinemas theatre located at The Hub on Causeway.
The theatre is a brand new location that opened in December 2019 and closed three months later due to Covid.
The group’s CEO Adam Aron told investors “Our outlook for the industry is positive as we expect the box office will be larger in 2023 than in 2022.”
In a separate filing, AMC reported to inventors that revenues from admissions, food and beverages finished significantly higher than pre-pandemic levels in 2019 with the release of the new Avatar movie.
AMC’s European subsidiary Odeon cinemas on Saturday reported their highest single-day of sales generated during 2022.
During AMC’s previous results update in early November, the company reported third quarter sales of growth of 26.9% to $968.4 million compared to $763.2 million in 2021. The figure was marginally ahead of consensus forecasts.
The firm’s net loss widened 2.7% to -226.9 million from -$224.2 million in Q3 of 2021. Underlying losses measured by adjusted EBITDA also widened from -$5.4 million in 2021 to -$12.9 during the quarter as cost inflation from staff and operating activities hit the bottom line.
Attendance trends showed encouraging signs of continued recovery with 32.9% growth from 40 million viewers in the prior comparable period to 53.2 million in Q3. During the same period, average screens declined (0.1%) to 10,138 from 10,151 in the prior year.
A chart from the Fintel financial metrics and ratios page for AMC shows the decline in sales and profits over the pandemic and the recovery that is now occurring.
Fintel’s consensus target price forecast of $2.73 suggests analysts remain bearish on AMC. Since the beginning of December, the average target has been reduced from $3.07 to $2.73 per share.
This article originally appeared on Fintel
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