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Upmarket UK chain increases first-half revenues by more than a fifth as investments in premium experience pay off

Upmarket cinema chain Everyman increased its revenues by more than a fifth in the first half of the year, as the UK group bucked the trend of declining admissions by investing in table service and plush seating.

First-half revenues at Everyman, which offers cinemagoers velvet sofas and footrests, rose 21 per cent to £56.5mn, as admissions grew 15 per cent to 2.2mn.

The London-listed group has been a rare success in the wider cinema industry, which has struggled to recover from the pandemic and found it difficult to compete against the explosion in streaming services.

There were 127mn admissions to UK cinemas in 2024, down from 176mn in 2019, according to the UK Cinema Industry Association.

Everyman chief executive Alex Scrimgeour told the Financial Times that Everyman’s premium seating and dining options were central to its continued growth in the age of streaming.

Food and drinks, including the company’s new range of smashed burgers and its hibiscus strawberry daiquiri, are delivered directly to guests’ seats.

“A lot of people have good AV [audiovisual] equipment at home now: you need to do more than just show good films to get people out of their homes,” said Scrimgeour.

Everyman also boosted its revenues by increasing ticket prices by 6 per cent. The average price paid for a ticket to an Everyman cinema in the first half was £12.46 — more than 50 per cent higher than the industry average price, according to the UK Cinema Industry Association. Customers also spent an average of £11.09 each on food and drinks.

Despite healthy demand Everyman reported operating profits of just £102,000 in the first half, its first half-year profit since 2022, as a result of increased costs. The company’s shares were little changed on Wednesday morning.

Scrimgeour acknowledged that UK consumers were facing “a lot of uncertainty” but insisted that Everyman offered an “affordable luxury” that could still attract budget-conscious customers.

The cinema industry’s recovery from the pandemic was stalled by the US writers’ and actors’ strikes, which shut down production in Hollywood for six months in 2023.

Empire Cinemas and Cineworld both went into administration in 2023, and Cineworld said last year it would close 11 cinemas in the UK after agreeing a sweeping restructuring deal.

Everyman, by contrast, is continuing to expand, increasing its share of the UK cinema market to 5.8 per cent in the first half. The chain, which operates 49 cinemas, plans to open four further locations in 2026 and 2027.

Mark Photiades, an analyst at Canaccord Genuity, said he was optimistic that Everyman had “plenty of further UK expansion potential” for its “differentiated and elevated brand offer”.

The pipeline of major studio releases is finally “akin to the pre-pandemic film slate for the first time”, said Scrimgeour.

He referenced the upcoming release of Universal’s Wicked: For Good. The first instalment of the musical was the UK’s highest-grossing film in 2024, netting £59.6mn.

Hedge fund takes 3% of Acadia Healthcare amid probe by US justice department and SEC

Activist hedge fund Engine Capital has built a stake in one of America’s largest providers of mental health services, arguing that it needs a board refresh as it faces multiple federal probes.

Engine revealed its roughly 3 per cent stake in Acadia Healthcare in a letter to the board, seen by the Financial Times, which called for the company to review its asset portfolio, improve its board directors and halt capital-intensive projects for new facilities.

Engine’s move, which puts it among Acadia’s 10 biggest investors, came as the behavioural health company faces Department of Justice and Securities and Exchange Commission investigations into allegations of holding patients against their will and falsifying insurance claims.

Shares in Acadia, which operates more than 250 facilities nationwide, including psychiatric hospitals and opioid recovery clinics, are down 71 per cent over the past year, giving it an equity value of just over $2bn.

The company first told investors about the government probes last autumn. They cost it $84.5mn in legal costs in the first six months of this year.

Acadia did not immediately respond to requests for comment. Engine declined to comment.

In the letter, Engine accused Acadia of maintaining a “growth at any cost” approach that has given rise to a bloated corporate structure. It also wrote that a 2022 reorganisation left it with an unwieldy management structure that has stifled the company’s turnaround.

Engine called for the Tennessee-based company to add new directors with expertise in behavioural health and capital allocation.

“It is stunning that Acadia’s board does not have a single director with relevant operating experience,” Engine wrote in its letter to the board. It also encouraged the company to consider asset sales to free up cash to buy its “deeply undervalued” shares.

On an earnings call last month, Acadia’s chief executive Chris Hunter said he was “pleased” with the company’s progress. Hunter, a former executive at heath insurance group Humana, has led the company since 2022.

Hunter added that “we’re committing to and have been committed to conducting a very thorough and independent review of our operations, while continuing to work very cooperatively with the DOJ and the SEC”. Acadia has already struck several settlements with authorities in past cases.

Founded in 2013 by Arnaud Ajdler, Engine Capital has targeted a wide array of companies, including industrials group Flowserve, oil and gas company Parkland Corporation and most recently diagnostics group Avantor.

Engine has claimed several victories this year. UK engineering business Smiths Group conceded to its calls for a break-up. Lyft made changes to its board and dual-class share structure not long after the hedge fund ended a campaign for these moves.