Douglas Graham

Douglas Graham's Palace Amusement Company has closed its Portmore cinema, following a precipitous decline in revenue - that was more than twice the decline reported by the other cinemas in the group during the September quarter.

The company said yesterday that it was forced to close the cinema because of the poor ventilation at the rented property, and customer complaint about this aspect of the venue.

"We can't operate a cinema without an air conditioning system.we do not want our patrons to be uncomfortable," said Eileen Thomas, company secretary.

Thomas declined to confirm industry reports that the closure was permanent - and was fundamentally driven by the disappointing performance of the business - based in part on a string of poor summer movies out of Hollywood.

The Business Observer was unable to reach the operators of the Portmore Mall - where the cinema is located - before press time last night, for their comments.

What is clear from the numbers though is that the Portmore cinema was by far the worst performer of what has generally been a bad year for Jamaica's largest cinema chain which lost nearly $10 million during the quarter. This was a reversal of the $1.7 million net profit during the September 2004 quarter.

For the three-month period July 1 to September 30, 2005, the Portmore cinema grossed $2 million for Palace, representing a 44.6 per cent decline over the comparative quarter in 2004.

With seating capacity of 236, it meant that the location which opened in 1993 earned a mere $8,500 per seat during the quarter for Palace, well below the performance of the average location.

The closure is the second for the Palace group in one year. In November 2004, its Island Cinema in New Kingston was closed - several months after the Island Life complex in which is was located was acquired by the Karl Hendrickson family.

Island cinema which was opened on 1995 had a seating capacity of 400.

During the three months to September 30, the gross revenue for Palace Amusement declined by 28.6 per cent to $95 million, from $132 milion - with market analysts blaming Hollywood for the poor performance.

Importantly, summer time is traditionally the best period for Palace Amusement which now operates 13 screens from four locations - Carib Five in Crossroads, Palace Cineplex in Liguanea - both in Kingston, Palace Multiplex in Montego Bay and Odeon Cineplex in Mandeville.

But it is the Portmore cinema that has consistently been the weakest performer.

For example, Kingston's two cinemas grossed $70 million for the three months from its 1,704 seats, representing a 30 per cent decline in revenue against the comparative period last year when it made $97 million. The September 2005 quarter's performance translates into approximately $41,000 per seat - nearly five times that of Portmore.

Palace Multiplex in Montego Bay earned $17 million for the quarter from its 835 seats. The revenue also represents a decline - 23 per cent - from the same period last year, when $22 million was earned. It also represents $20,000 per seat for the review quarter.

Odeon in Mandeville which seats 390 viewers, had a downturn in revenue, making $5 million within the last quarter or approximately $14,000 per seat.

Palace Amusement also distributes films to the Cove Cinema in Ocho Rios, and has exclusive rights for film distribution to major companies and independent companies for Jamaica and the Cayman Islands.

The company has two primary income generating sources - ticket sales, and confectionery sales at the cinemas.

Last year's September quarter, box office receipts or sales in tickets amounted to $76 million. This revenue source declined by some 34 per cent during the comparative quarter this year. Ticket sales as a percentage of revenue declined from 57.2 per cent to 53 per cent.

Confectionery sales fell from $31 million to $26 million, or by 17.6 per cent from the comparative quarter last year.

A movie ticket for an adult now costs $ 410, while children under 11 pay $ 210.

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