Cineplex Galaxy (GGX.UN) corporate profile

by: David Strahlberg

Cineplex Galaxy LP (CGX.UN) is a leading Canadian movie theater chain.  Below is the company's profile and strategy (from the company's web site).

  • Cineplex Galaxy LP currently operates 86 theatres with a total
    of 775 screens in 6 provinces across Canada.
  • There are 63 Cineplex Odeon Cinemas located in
    the major urban centres and 22 Galaxy Cinemas featured in mid-size
  • Proudly Canadian, Cineplex Galaxy LP is a public company
    traded on the Toronto Stock Exchange under Cineplex Galaxy Income Fund
    (symbol CGX.UN).

The Company 's business strategy is to continue to enhance its position as a leading exhibitor in the Canadian market by focusing on providing customers with a premium movie going experience. Key elements of the Company's strategy include:

Leveraging Market Specific Operating Focus:
The Company utilizes its distinct Cineplex Odeon and Galaxy brands and market specific operating focus to serve the widest range of markets, with a premium movie going experience tailored to the specific needs of each location.   The Cineplex Odeon brand is among the oldest in the industry and is recognized for providing premium quality theatre experiences.  Most Cineplex Odeon theatres are located in major metropolitan markets and at prominent locations in high traffic areas.  The Galaxy brand is focused on providing a premium entertainment destination within the community.  The Company 's operating strategy includes a concentrated local marketing effort and community interaction in all markets.

Maximizing Operating Efficiencies:

The Company 's prominent market position enables it to effectively manage film, concession and other theatre level costs, thereby maximizing operating efficiencies. The Company aggressively seeks to achieve incremental operating savings by, among other things, implementing best practises and negotiating improved supplier contracts.

Capitalizing on Ancillary Revenue Opportunities:

The Company seeks to expand and further develop ancillary revenue opportunities, such as advertising, promotions, games and special events. These activities generate attractive margins and involve limited incremental operating expense. The combination of Cineplex Odeon theatres and Galaxy theatres gives the Company the ability to offer advertisers a larger number of screens.  Management believes that the Company 's size and market position will allow it to exploit new ancillary revenue opportunities more quickly and profitably than most of its competitors.

Pursuing Selected Growth Opportunities:
The Company seeks to enhance its competitive position by seeking selected complementary development opportunities; improving and refurbishing theatres and seeking selected acquisition opportunities.  The Company only pursues expansion opportunities that meet certain strategic and financial return criteria.  The Company has the financial strength, experience and flexibility to pursue attractive development and acquisition opportunities that are accretive to the Fund. The Company currently expects to open three new theatres each year, if opportunities are available.

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