Kinepolis Group (Brussels:KIN)

Kinepolis Group is a Belgian cinema operating company in Western Europe. Kinepolis Group operates 23 complexes in Belgium, France, Spain, Poland and Switzerland, with a total of 317 cinemas. It employs over 1,900 people. In addition to its cinema business, Kinepolis is also active in film distribution, the sale of on-screen advertising, property management in the cinema sector and the sale and installation of projection and sound equipment.

The Kinepolis Group was founded in the 1960s, when the late Albert Bert and his sister-in-law Rose Claeys-Vereecke expanded the Majestiek neighbourhood cinema in Harelbeke into a two-screen complex – the very first ‘multiplex’.

En 1988, la famille Bert a construit le Kinepolis Bruxelles, dans le quartier du Heysel, sur l’ancien site de l'usine General Motors (ce qui explique la structure en spirale typique des grands parkings permettant d’aller d’un étage à l’autre du complexe) ; il s'agissait alors du premier multiplexe européen. Son succès a été à l'origine d'un important renouvellement du parc de salles de cinéma en Europe dans les deux décennies suivantes.

With its IPO in 1998 and its international expansion since the second half of the 1990s, Kinepolis Group has become a leading cinema operator in Europe. However, the group has retained the same innovative energy and customer focus that motivated the founders at the origin of the adventure. In terms of technology, this has resulted in the move to digital cinema and the development of 3D screening rooms. In terms of content, the offering has been supplemented in an alternative manner, with classic feature films alongside sporting, cultural and social events.

Kinepolis offre un rendement courant modeste de 1.9%, légèrement moins que sa moyenne à long terme (2.57%). Par contre la croissance annuelle moyenne est particulièrement soutenue avec 25.52%. De plus, le distribution ratio demeure à des niveaux très prudents, avec seulement 23.30%.

Si les fondamentaux du point de vue des dividendes pourront en attirer plus d'un, la volatility de Kinepolis pourraient par contre faire peur à beaucoup d'investisseurs, avec 38.46%. Avec de tels chiffres, il faut avoir les nerfs particulièrement solides. En contrepartie, malgré une variation du cours digne d'un grand huit, KIN est relativement peu sensible aux variations du marché, avec un bêta de 0.68.

KIN, listed in euros, has the advantage of reacting favorably to a fall in the dollar, which is confirmed by a $risk of -0.46. A fall in the greenback therefore tends to have a favorable impact on the value of KIN's share price in CHF. But the reverse is of course also true. The stock can therefore represent good diversification, or even a hedge, for a portfolio strongly oriented towards USD.

In the end, we can say that Kinepolis does not do things by halves, as much for its cinemas as for its share price and its dividends. The yield is modest but is progressing at the speed of a rocket. Despite this, the distribution ratio remains very prudent. The volatility is very high, but in return the title offers good diversification/protection in USD-oriented portfolios. Ultimately, KIN gets 4 stars, which is a very good profitability/risk ratio. But beware of volatility. Not only do you have to have strong nerves, but there is also a significant risk of getting in at the worst possible time!

Sources: Yahoo Finance, Kinepolis, Swissquote, dividends.ch