Palace shareholders approve stock split
Palace Amusement shareholders gave the nod to a 600-for-1 stock split that’s meant to drive trading activity in the tightly held shares amid the company’s return to pre-pandemic levels of movie attendance.
The split will take effect on February 28, which will dethrone Palace as the most expensive stock on the market to a low-priced security.
On the day of the vote, the stock closed up at $2,524.
Assuming the price holds to the end of February, a split would put the stock within a $4 to $5 band.
Shareholders will end up with 600 times more units in hand, but the value of their holdings will not change, Financial Controller Carol Lee reaffirmed at the cinema company’s annual general meeting on Tuesday.
For all of 2022, Palace’s shares were selling below $1,000 after peaking at near $3,000 before the pandemic. Lee said news of the stock-split proposal served to push the price of the shares from $620 in mid-December to more than $2,500, ahead of the vote.
The split was done to make the stock “more attainable and affordable to the everyday investor, those patrons who supported us throughout the pandemic, movie lovers who are happy to be back at our locations with the big screen and superior technology,” the financial controller said.
The split will increase the number of issued shares from 1.437 million to 862.2 million units. Shareholders also voted to reset Palace’s authorised capital from 1.5 million shares to an unlimited number.
In the wake of the vote, Palace’s stock price shot up to $2,782 on Wednesday, then to $3,048 on Thursday, valuing the company at $4.38 billion.
As an entertainment company dependent on the physical turnout of movie watchers, Palace Amusement’s business faltered during the pandemic, when restrictions were applied to social contact and public gatherings.
The company suffered the consequences for two years, but as of May 2022, all cinemas were back in operation.
“Cinema rentals, school shows, birthday parties, et cetera, and the 3D option for movie viewing have all been reinstated. We are encouraged that since the start of the new financial year in July 2022, the attendance has been steadily improving ... with the patronage since October reflecting pre-pandemic numbers,” Lee reported.
The release of blockbuster movies, such as Woman King, Black Panther 2 and Avatar 2, has boosted numbers, Lee said, adding that revenue for November and December was exceptional, with over 81,000 moviegoers turning out in November and just over 78,000 in December.
“For the financial year to date, we are at approximately 87 per cent of pre-COVID-19 attendance numbers, and it is expected that this trend will continue to the financial year end,” the financial controller said. The company’s financial year ends in June.
For the first quarter ended September 2022, Palace Amusement posted a loss of $56.8 million, an improvement of the $79.4-million loss for the similar period in 2021.
Meanwhile, in the hunt for new revenue, the company plans to introduce a butler service for its VIP patrons. Concessions and Screen Advertising Manager Steve Cooke said the new premium service will see some patrons who utilise box seats at cinemas receiving concierge service for purchases from the concession stands.
Those patrons will be seated in special reclining seats, similar to those being offered at the Sunshine Cineplex theatre in Portmore.
Palace will also launch a mobile application and an upgraded website to make it easier to purchase tickets online, Cooke said.