Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Cineworld shares set to struggle after major H1 loss

The beleaguered theatre group is likely to see its share price come under even greater pressure after the company swung to a significant half-year loss due to Covid-19 closures.

  • Cineworld shares under pressure after suffering half-year loss amid Covid-19
  • Rising coronavirus could see national lockdowns reinstated
  • Cineworld may raise additional funds to increase liquidity amid challenging environment

Cineworld shares have found support at 41p per share, but the stock could struggle over the winter months, with rising coronavirus cases leading to tighter government restrictions and the possibility of national lockdowns, which would be a disaster for the theatre group.

Earlier this month, the company revealed the financial impact of Covid-19 on its business, with the group swinging to a loss in its first six month of trading (January-June 2020). In fact, the cinema chain reported a $1.64 billion loss, down from a profit of $139.7 million during the same period a year ago.

Revenues at the company slipped 67% after admissions fell 65% to $47.5 million due to the group being forced to close all of its sites between mid-March to late August due to government restrictions aimed at curbing the spread of the virus.

‘The impact of Covid-19 on our business and the wider leisure industry has been substantial, with the closures of all of our cinemas worldwide for an extended period,’ Cineworld CEO Mooky Greidinger said.

‘During this unprecedented time, our priority has been the safety and health of our customers and employees, while at the same time preserving cash and protecting our balance sheet.’

Cineworld is trading at 43p per share at the time of publication, with the stock down 80% year-to-date.

Cineworld may raise additional funds if tighter Covid-19 restrictions return

The pandemic has already taken a major toll on Cineworld’s financial performance this year, with the company raising $360.8 million worth of additional liquidity to support its business.

The company also reduced costs, made use of government support schemes, delayed investments and suspended its dividend to the disappointment of its shareholders.

But if tighter restrictions return to curb the spread of the virus once again, Cineworld admitted that it would likely have to raise additional capital to improve its liquidity.

‘However, we are well prepared operationally for all possible eventualities and continue to monitor for any potential changes to government restrictions or guidelines,’ Cineworld said in a statement.

‘In the US, our largest market, California remains partially closed and New York is yet to re-open. We hope to see these states re-open in the near future, as they are important to the group and to the theatrical industry as whole.’

Uncertain future for Cineworld

Cineworld must have a stronger performance in the second half of 2020 to ease pressure on its finances and strengthen its balance sheet.

However, the company has said it has sufficient resources to survive until the end of this year even if its theatres had to stay closed after it secured extra headroom from its lenders in May.

But regardless, a weak H2 could lead Cineworld to take more drastic action such as downsizing its estate or cutting jobs, which would likely weigh heavily on its share price.

How to trade stocks with IG

Looking to trade Cineworld and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs and spread bets in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Cineworld Group PLC’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.