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2020 was a very unforgiving year for the cinema business here in South Africa.

The same can be said for many industries, but when the country’s largest cinema chain goes into business rescue, you know the situation is dire.

Under changing alert levels, the regulations surrounding cinemas have varied, but for many, it appears that heading to the movies during a pandemic isn’t on the cards.

Here’s Moneyweb with more on Ster-Kinekor’s future:

In a statement, it said its board decided to enter “voluntary business rescue proceedings with effect from January 27, 2021”…

The group’s cinemas will remain open as the company reorganises itself.

The group, which runs 55 movie complexes with more than 400 screens and 64 000 seats, was a profitable business until the Covid-19 crisis started early last year.

“Up until February 2020, Ster-Kinekor welcomed millions of moviegoers every year to their cinemas. The business was profitable and highly cash generative, with good prospects of future/ongoing profitability from the pipeline of blockbuster film content that had been scheduled.”

That all changed in March, when we officially entered lockdown (today is day 312, by the way), and Ster-Kinekor was dealt another telling blow when COVID-19 cases once again soared in December.

Ster-Kinekor said it was now “trading at a loss, as the company continued to incur costs”, and is  “heading for further operational and cash flow challenges”.

Stefan Smyth, a partner at EY in the Africa Turnaround and Restructuring Strategy practice, will lead the charge as the business rescue practitioner.

To reiterate, cinemas will remain open, with Ster-Kinekor acting CEO Motheo Matsau saying:

“Moviegoers can continue to book their movie tickets through our website, App, or in-store.

“All cinemas have instituted strict Covid-19 protocols, which mean temperature checks and hand sanitizing on arrival and inside the auditoria and mask wearing as appropriate. Every two seats are kept vacant for social distancing”

It is hoped that the restructuring under the business rescue plan will help the company return to profitability, “once operating restrictions have been lifted and when international film distributions start to flow again”.

I bet Ster-Kinekor top brass are looking at that first batch of vaccines arriving today, and hoping that many more are on the way in the very near future.

[source:moneyweb]