SYDNEY – Multinational exhib Hoyts Cinemas is stepping up its plan to carve out niches in several European markets as part of its goal of expanding to 2,500 screens worldwide.
“Europe is our big focus this year,” said Hoyts CEO Peter Ivany, whose company currently operates 711 screens in the U.S., 245 in Australia and New Zealand, and 65 in Mexico (trading as Cinemex – 35% owned by Hoyts).
Hoyts international development exec Tony Murray has been tapped as general manager of Hoyts Europe. He’s based in Brussels, where he’s nurturing cinema deals with Belgian partner Decatron and, separately, two other ventures.
Ivany won’t disclose the “four or five” Euro territories that Hoyts is negotiating to enter, but said they cover Western and Eastern Europe.
When the co-venture with Decatron, the construction arm of the Bert cinema group, was unveiled in July, the two companies said they were looking at projects in a number of territories including France, Spain and Poland. Ivany indicated he’s aiming for a critical mass of about 100 screens in each of the larger markets, and a minimum of 60-70 in smaller countries.
Asia on the back burner
In deciding to focus on Europe, Hoyts has deferred plans to enter Asia for about 18 months. “There is a smaller window of opportunity in Europe, so we have to act fast,” Ivany said. “We spent a lot of time looking at Asia, but we haven’t found the right partner or the right deal. The returns are higher in Europe and Latin America.”
After buying a controlling stake in Mexico City-based Cinemex in November for $22 million, Hoyts plans to expand that loop to 150 screens by the end of this year and eventually to 350. Ivany said the company will move into two other Latino markets this year. In the U.S., Hoyts is committed to build 260 screens and has a further 400 under discussion, all concentrated in its stronghold in the Northeast. In Australia, it’s developing some 200-220 new screens, most scheduled to open over the next two years.
Stock on the rise
Currently, Hoyts garners 60% of its revenues from Australia and the balance from the rest of the world. Ivany foresees those percentages being reversed in the next few years. Hoyts raised $78 million when it sold 22.5% of its shares to the public and listed the stock on the Australian Stock Exchange in August. The major shareholders are San Francisco investment firm Hellman & Friedman, property developer Lend Lease Corp. and Ivany. Hoyts’ stock price has boomed amid keen investor appetite for media and entertainment shares, and the company is capitalized at about $480 million.