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Cineworld - Sale and leaseback yields special dividend

July 2019

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • CINE
  • Price:
  • 289p
The shares hit a new high of 321p after Cineworld announced a sale and leaseback transaction and special dividend. This came alongside an update for the period to 12th May and noted trading in line with expectations.Cineworld has announced a US$286m sale of 17 US based (former Regal) cinemas and leaseback under 15 year leases. These had a book value of US$240m, so achieved an uplift in value of US$46m. Half the proceeds will be returned to shareholders as a special dividend of c. 16p a share with the rest paying down borrowings. Leverage is expected to fall from 3.3x net debt / EBITDA to around 3x. It also said there’s scope for other similar sized transactions, in particular one involving a further 18 cinemas and 255 screens ...

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