Australian cinema group Hoyts has grown from a one-screen operation into the world’s 10th largest with over 1,200 screens in its native country, New Zealand, the US and, more recently, in Chile and Mexico. It is planning a big push into Europe.
Founded in 1908, Hoyts has been quoted on the Australian stock exchange since 1996. Its ambition in Europe is to grow by developing new cinemas with joint venture partners – although according to Hoyts Europe managing director Raymond Smith: “Where this is not possible we do not hesitate to move forward on our own.”
The company has some catching up to do; it is several years behind US cinema groups like Time Warner, AMC and UCI that are already present in Europe.
Hoyts opened a regional office in London in 1996 to kick off its European activity; its flagship cinema will be at Bluewater, the giant retail and leisure development in Kent, which is being built by Australian developer LendLease.
Five other UK sites have been secured, with a further 100 sites under consideration in the country. It aims to open around 150 screens over the next five years, on 15 sites. “Our policy is to look for key sites rather than build up a mass of sites as the market is becoming saturated,” says Smith.
He thinks there are huge opportunities in the leisure sectors across Europe. “We look for local experience in the marketplace and we are very aware of the cultural differences of each country,” adds Smith.
Germany shows the most potential because of its large population. Hoyts has signed contracts on two sites here – in Bad Oeynhausen near Minden and Herne close to Dortmund, but it is still looking for a joint venture partner in the country to enhance growth. The group has ambitious plans for the country and aims to establish a 160-screen circuit within five years.
Italy also great scope as the country has few multiplexes. Hoyts is also considering Spain even though multiplexes are well-established in the country, as well as chasing opportunities in eastern Europe by setting up partnerships.
In Austria, Hoyts has entered the market through a joint venture partnership with established a local cinema operator, the Hueber family, in Linz and St Polten. Together they are planning to open cinemas in a number of Austrian locations, including Vienna.
Hoyts is not targeting France because of what it sees as too much protectionism in local markets.
Rather than a “one size fits all” approach to Europe, Hoyts prefers to build cinemas that will appeal to local markets. In Austria for example, it is following closely Hueber’s guidelines on how the project should be designed.
Nevertheless, Smith does point to the emergence of a new generation of multiplex cinemas within large-scale mixed developments, with stadium seating and bigger wall-to-wall screens. At Bluewater the cinema will be “highly integrated and a different product”, he says.
|
Year to June 30(Aus $m) |
1997 |
1996 |
|
sales revenue |
381.5 |
331.3 |
|
operating profits before abnormal items and tax |
37.8 |
28.4 |
|
total assets |
695.1 |
557.7 |
|
total shareholders’ equity |
269.5 |
213.9 |
Hoyts Europe
22-28 High Street
Epsom
Surrey
KT19 8AH
tel +44 1372 742055
fax +44 1372 720928
