David Olive: Will Cineplex´s comeback be a box office hit?
(The Star Movies)

Is the recent comeback of Canada’s biggest movie exhibitor sustainable?Renewed investor enthusiasm in Cineplex Inc. has sent its stock up 14 per cent from its low point earlier this year. Yet there appears to be considerable room for further gains. At $32, the stock is still trading at a roughly 40 per cent discount to its peak last year. And the upside isn’t entirely pegged to Hollywood’s ability to turn out box-office hits. Cineplex is gradually succeeding with its strategy of reducing its reliance on the unpredictable appeal of the movie studios’ output. Cineplex now looks to movie exhibition for just under 45 per cent of total sales. The balance is derived from more stable revenue streams. Cineplex is now one of the world’s largest providers of virtual-reality play centres; online gaming platforms; and digital message boards that it installs and maintains in Canadian, U.S. and non-North American fast-food restaurants, banks and shopping centres. It’s still the case, though, that blockbuster movies are the most potent factor in moving the profit needle and the stock price. Cineplex’s total annual patron count is likely to recover to the 77 million level of recent years before 2017’s more than 5 per cent dip due to a string of box-office duds.But for investors concerned that blockbuster Avengers: Infinity Wars alone accounted for 24 per cent of second-quarter exhibition revenues, Cineplex is better insulated than before to inevitable droughts in crowd-pleasing pictures. The firm’s non-exhibition operations are becoming substantial as standalone businesses, have significant growth potential, and are not vulnerable to competition from online streaming and other box-office rivals.Perhaps most important, they are under management’s control, in a way that Hollywood’s output is not.U.S. Big Business vs. TrumpDonald Trump’s opponents have opened a new front against his trade policies.Americans fo ...