capex pVR cycle: PVR restarts capex cycle, plans to open 125 screens in FY23

Leading multicast chain operator PVR expects the film exhibition industry to return “dynamicly” in fiscal year 23 and plans to open up to 125 screens during the year, its highest ever tally in a single year. According to the company’s latest annual report, PVR, which is merging with a competitor, expects the process to be completed in this fiscal year.

As per the terms of the merger, Chairman and General Manager Ajay Bigley will be Managing Director and Joint General Manager Sanjeev Kumar will be CEO, respectively, of the joint entity PVR INOX for a term of five years.

“Overall, business is expected to grow in the coming quarters, buoyed by the growth in ATP (average ticket price) and SPH (spend per capita) already seen in Q3 and Q4 of FY21-22, and a recovery of higher occupancy. Its pre-COVID levels are on the back of the premium content slate, and ad revenue will return to its pre-pandemic level over the next few months, the 2021-2022 Annual Report states.

PVR has already ramped up operations in a big way as it has seen audiences return to theaters after the third wave of COVID-19

“The company is resuming its capex cycle from fiscal year 2022-23 and has plans to open (about) 125 screens this year, breaking its own record of opening 87 screens per year in fiscal year 2019-20. The company has opened 29 screens across 5 real estate in FY 2021-22,” the report said.

In their letter to shareholders, PVR Chairman and Managing Director Ajay Begley and Joint General Manager Sanjeev Kumar said: “We were confident that the theatrical exhibition industry that has withstood countless challenges in the past will rebound dynamically in fiscal year 23.”

Describing the last two years affected by the pandemic as “the most difficult period for our business,” Bigley said, fans are now calling for a return to theaters.

Domestic releases such as RRR in March 2022 and KGF 2 in April 2022 have grossed over Rs 1,100 crore and Rs 1,200 crore, respectively, in global box office collections. “And with the lineup of excellent content we have for the rest of this year, we hope this momentum continues,” they said.

Sharing an update on the PVR scheme of all equity mergers for rival INOX, they said they are in the process of seeking such approvals and hope to complete this merger in the current fiscal year.

According to the agreement,

You will merge with PVR at a share swap ratio of 3 shares of PVR for every 10 shares of INOX.

The merged entity will be named PVR INOX Ltd with the existing screens brand to continue as PVR and INOX, respectively. The new movie theaters opened after the merger, and will be designated as PVR INOX, the two companies said on March 27.

They said the merger “will bring together two of India’s top cinema brands” to deliver an unparalleled consumer experience with a network of around 1,550 screens, as it has so far.

She said the merger bodes well for the growth of the Indian film exhibition industry, besides ensuring tremendous value creation for all stakeholders, including clients, property developers, content producers, technology service providers, state treasury and above all, employees. .

“While aggressively addressing the ordeals posed by the emergence of various OTT platforms and the after-effects of the pandemic, the joint entity will also work to bring the world-class cinema experience closer to consumers in Level 2 and 3 markets,” they said. .

For the financial year ending March 31, 2022 PVR reported revenue of Rs 1,409 crore. The box office revenue of PVR was Rs 670 crore and the average ticket price was Rs 235 crore. The total number of admissions was Rs 3.3 crore.

PVR CEO Gautam Dutta said in the fiscal year 22 business in January and February was affected by a lack of new content and capacity limitations. However, due to the low intensity of the omicron variant, state governments refrained from closing movie theaters entirely and producers were quick to announce their new release dates.

“The resilience the company has demonstrated over the past two years and the rapid pace of recovery in admissions processes, once new content is available, has solidified our belief in the power of the PVR brand. We are very optimistic about the business prospects and firmly believe that the best is yet to come.”

In fiscal year 22, PVR has taken important initiatives around its business, such as alternative forms of content in movie theaters.

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