FOLLOWING the closure of its Cineplex and Multiplex cinemas, Palace Amusement said the two entities will remain closed in the interim as the company seeks to lessen its capital expenditure and increase revenues which have been severely impacted by the COVID-19 pandemic.
The cinemas located in Sovereign Centre, Kingston and in Montego-Bay were closed by management back in September last year after operations at both entities became impacted by the curfews and Government-imposed restrictions to stem the virus which resulted in little to zero turnout at these locations.
According to Carol Lee, group financial controller at Palace Amusement, while the company’s board of management remains in constant discussions, nothing has as yet been finalised in terms of the future plans for these cinemas.
“They remain closed at this point and it is still being discussed as to where we go forward. Those were the two worst-performing cinemas at the time when we closed them – they were at three and five per cent occupancy,” she told the Business Observer at the company’s annual general meeting (AGM) held last week.
Operations at the Mutliplex cinema, which prior to the pandemic was affected by the states of emergency (SOEs) and other enhanced security measures, became worsened by job losses resulting from the impact of COVID-19 on tourism in that part of the island.
After closing these cinemas, Lee said the staff from Cineplex was successfully merged with some from Carib 5 while others went to work at its drive-in cinema in New Kingston, noting that “as for those from Multiplex – a plan of action was being worked on as we know the staff there wants to resume work”.
“We are watching the situation and we are in discussions with our landlords,” she added, expressing hope that things will not get any worse and force a complete shuttering at any of these cinemas.
The company, which continues to reel from the effects of the pandemic, has had to find ways to stay afloat as it seeks to navigate the devastating impacts of the pandemic. These include its more recent half-off and weekend specials aimed at increasing patronage, along with previous arrangements with its bankers to secure interim financing to buffer expenses.
At its recently concluded AGM, one shareholder chided the board of management for not accepting numerous calls in the past to exploit capital raise options such as a stock split at a time when the finances were positive, noting that this would have enabled the company to withstand the pandemic in a much better way and from a build-up of capital reserves.
Chairman Douglas Graham, in responding to the concerns, said that while the pandemic has proved to be one of the worst crises seen in years, which has again affected the company’s ability to declare dividend payments, shareholders are urged to remain optimistic with hopes for a positive recovery.
Lee, however said that while the company was not averse to engaging other avenues to raise capital, the current focus was on stabilising operations and increasing cashflow for the affected company which has seen revenue losses inching closer to an estimated $300 million since the pandemic.
“We borrowed millions from the bank and we are still looking at other financing options including those similar to what the [shareholder] has spoken about – whether it be through equity or other forms. However, right now that is not a priority – at least not in this season.
“As far as I know there is nothing on the radar in terms of capital outlay. So far, our interference and injection in this whole matter has been to stop capital expenditure. The plan right now is to go forward with a stronger base and then we can make some decisions from there as to any further expansions,” she said.
With limited viewing of movies now in place at its open locations, the cinema operators said they were hoping that the roll-out of a vaccination programme by Government in the next couple of months will help to curtail some of its losses as customer confidence is renewed and patrons eventually return to the cinemas.