Ster-Kinekor’s business rescue is taking shape

Rescue practitioners report an improvement in attendance numbers since adopting the business rescue plan in March.
Image: Supplied

Ster-Kinekor observed an increase in cinema attendance during the months of March and April, which was aided by the re-opening of more screening locations, increased trading time and the release of must-see titles, business rescue practitioner (BRP) Stefan Smyth notes.

The popular cinema chain has been in business rescue since January 2021, this after Covid-19 related trade restrictions and lockdowns led to a drop in cinema audience numbers, subsequently placing the cinema giant in financial crisis.

“Overall attendances are displaying an upward trajectory and [this] reflects the continued appetite by South Africans to return to cinema, further backed by stronger content despite consumer spending tightening,” the latest business rescue proceedings report says.

Since adopting the business rescue plan, Ster-Kinekor has improved operating and trading days at all its sites to at least six days a week.

However, despite this improvement, the BRP says the attendance numbers still fall short of expectations. Contributing to this shortfall was the poor performance of smaller film titles as well as the delay in content releases during the month of March, he says.

“The underperformance against forecast was primarily driven by [the movies] ‘Morbius’ and ‘Ambulance’, which have both not achieved their forecast attendance targets, and which is aligned with its global performance.”

“This has been offset by improved performance by titles such as ‘Unchartered’ and ‘Encanto’ which have performed above expectation.”

Implementing the rescue plan

The BRP says it remains committed to continuing the implementation of the amended rescue plan which was adopted by shareholders and creditors in early March. He further adds that he is confident that despite suffering several delays in the past, the rescue plan will bear fruit.

“A more notable recovery trajectory is still expected towards the end of this financial year and is expected to be supported by a strong ‘slate’ of film content due for release during this period,” the report notes.

“Due to the amended business rescue plan being successfully adopted, the progress made with implementation of the plan and likewise sufficient liquidity for ongoing trading, the BRP remains of the view that there are reasonable prospects of rescuing the company.”

Read:
Ster-Kinekor enters business rescue
[January 2021]
Ster-Kinekor reports ‘stable’ cinema conditions but remains in business rescue
Ster-Kinekor business rescue process delayed once again 
Ster-Kinekor receives R250m ‘handover’ offer

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