Vue earnings hammered by National Minimum Wage and rising costs

Vue, the cinema chain, has reported a drop in sales and earnings for the first half of its financial year, despite the releases of high-profile films such as Wonka, Kung Fu Panda 4 and Dune: Part 2.

The company attributed the decline to tough comparisons with the performances of Avatar: The Way of Water, The Super Mario Bros Movie and Guardians of the Galaxy Vol. 3 during the same period in 2023, as reported by City AM.

Vue's half-year update revealed that admissions fell from 34.3m to 33.2m, while total revenue declined from £376.6m to £348m. The chain’s consolidated EBITDAaL (earnings before interest, taxes, depreciation and amortisation and after lease expenses) was cut from £23.3m to £3.5m.

Vue also noted that the average ticket price was £5.71 over the six months. The company said that more family/children focused content was released, which lowers ticket prices, while fewer 3D films were priced at a premium.

Despite gross margin levels remaining consistent year on year, Vue cited a "softer" second quarter film slate and the impact of National Minimum Wage and cost inflation as reasons for its lower EBITDAaL. This update follows Vue's report of a total revenue of £759m for the 12 months to 30 November, 2023, up from £606m, while its pre-tax loss narrowed to £73.7m from £253m.

In the UK, admissions rose to almost 134m – an increase of 0.3 per cent – with gross box office receipts of just over £1bn.

Vue's recent half-year results follow the announcement that rival Reel Cinemas reported a pre-tax profit of £424,007 for the year ending 28 December 2023, a decrease from £2.4m. Its turnover increased slightly from £13.3m to £13.9m during the same period.