Palace writes off Mandeville but still wedded to Kingston expansion
Listed cinema chain Palace Amusement Company Limited will avoid re-entering Mandeville, but expressed a desire to expand in Kingston, a plan that has been germinating for several years.
It is unfortunate news for cinema fans in the wider parish of Manchester, where movie piracy is not widespread but cinema revenue has been anaemic. The company closed the loss-making Odeon cinema in Mandeville a year ago. The savings are now going to the bottomline of the company, which posted net profit of $31.9 million up from $12.5 million a year earlier.
"We have no plans for another cinema in Mandeville," chairman Douglas Graham told shareholders at Palace's annual general meeting on Tuesday at the company's South Camp Road office in Kingston.
"Mandeville never generated enough resources to keep a cinema viable, and we tried for many years. We lost between $8 and $10 million every year. We were longsuffering in that area and do not have plans to go back," Graham said.
It comes as the company's revenues are growing following years of stagnation affected by piracy. Specifically, Palace earned $915.7 million in revenue for its June 2015 year end, or 9.8 per cent more than a year ago. Graham, however, indicated that the company wants to expand, which harks back to plans made a decade earlier. At that time, there was unofficial talk of the company opening a cinema along the Constant Spring area in Kingston, but that never materialised.
"We would like to expand in the Corporate Area, but we just have not found the right location," said Graham, who holds the bulk of shares in the company through Russgram Investments Limited.
It remains to be seen if Graham's statement will result in a new expansion thrust for the company, whose shares are tightly held.
Odeon's closure resulted in the company operating three cinemas, including Carib, Palace Cineplex and Palace Multiplex.
The company's annual report described the year as 'successful'.
"Even in the face of a difficult local and global environment, which impacts the group's performance, we continue to weather the storm - largely because the movie experience that we offer is still a preferred social activity," management stated in the financials. "Despite the weakened spending power of our patrons, we remain competitive because we are an affordable option, catering to all age groups, families, religious persuasions and cultural backgrounds."