ODEON THEATRES' PROSPECTS
Perhaps, as the pessimists keep saying, we ought to with- hold judgement on such matters as the effects of war on the entertainment and luxury trades until the war has really started, but one cannot but be impressed by what has happened so far. Black-out notwithstanding, cinema com- panies, it seems, are already doing quite nicely. This may be a reflection on the capacity of the average English family to amuse itself in its own home or an expression of a wide- spread form of escapism, but it is heartening news for cinema shareholders. Reviewing the position at the annual meeting of Odeon Theatres this week Mr. Oscar Deutsch cited some quite remarkable facts. In some of this company's 18o cinemas peace-time weekly record figures have been broken and while takings in reception areas have naturally risen, there has been no evidence of any material falling off in the evacuation areas. Thus, apart from the period of com- pulsory closing, the company's turnover has been main- tained.
Mr. Deutsch made no attempt to forecast the year's results or to disguise the obvious difficulties, but shareholders have the satisfaction of knowing that the company has been cautious in its financing and has alert and enterprising management. Merger discussions with the Gaumont-British interests, it seems, have been dropped, but the advent of war conditions must have removed, for the duration, the danger of competitive over-building. Nevertheless, the cinema industry is speculative enough to call for high yields on cinema securities. I see that Odeon 5 per cent. first mortgage debentures, which are well covered, stand at 70 to yield just over 7 per cent., the 6 per cent. Et cumulative preferences, at I is. 3d., return col- per cent., and the 5s. ordinaries at 4s. 3d. give nearly 12 per cent.
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