LONDON — Virgin Cinemas, Richard Branson’s U.K. multiplex chain, has decided to triple its expansion budget this year, after making record profits in 1996.
Virgin is planning to spend £34.5 million ($54.9 million) in 1997 on building new cinemas and refurbishing old ones.
According to chairman Simon Burke, that’s about $23.8 million more than the company originally intended to in-vest in the coming year, and is almost three times the $18.6 million it spent in 1996.
The decision to speed up the capital investment program was triggered by the company’s unexpectedly strong per-formance in 1996. It reported a 90% increase in operating profits to $21.5 million, up from $11.1 million in 1995.
That was achieved despite the fact that Virgin sold off 90 traditional cinemas in May 1996 to the ABC chain, leaving Branson’s company with just 26 multiplexes.
Virgin is committed to opening 20 new multiplexes by the year 2000, although Burke now predicts that the figure is likely to be slightly higher. In the past 12 months, the company has signed 10 new sites for development, and expects to open three new cinemas in the coming year.
In the meantime Virgin has started to dip its toes back into the production and distribution business by becoming a 25% shareholder in the Film Consortium, one of the leading bidders for an Arts Council production franchise. It also considered making a bid for Rank Film Distributors but decided the price was too high.
Virgin Cinemas is minority-owned by Branson’s Virgin Group, alongside Texas Pacific Group, Colony Capital and Hotel Property Group.