JERUSALEM (Reuters) - Imax expects to continue to expand its network of theatres at an annual pace of about 30 percent and is bullish on growth prospects in China, chief executive Richard Gelfond said on Thursday.
The Canadian big-screen movie company, which has 550 theatres worldwide, of which 400 are commercial, is opening over 100 theatres a year.
“We have been growing at about 30 percent a year over the last several years in terms of the size of our network and we expect to see a similar growth rate in the future,” Gelfond told Reuters on the sidelines of a conference.
Imax has ridden a wave of popularity for 3D movies and its large-screen format in North America and emerging markets such as China. Gelfond said he was very enthusiastic about China where Imax has 40 theatres and will open another 50 this year. Its backlog will bring the number in China to 177.
“Nothing goes up forever but I am a big believer. If China (economy) hits some speed bumps, entertainment tends to be a fairly recession-resilient business as we just learned in the worldwide economy over the last few years,” Gelfond said.
Russia is also a very fast growing market for Imax, which has about 250 commercial theatres in the United States, where growth is rapid but not as fast as in China.
“I am not sure if China will pass the U.S. but I would not be shocked to see that happen,” he said.
Eastern Europe has been a faster growth market for Imax than western Europe, where there are real estate constraints.
Last year was the company’s best in terms of the rate of signing of new theatres, as Imax added 224. In the first quarter of 2011 Imax signed new deals for 101 theatres.
“I thought last year’s pace was unsustainable and I was very surprised by the first quarter. I really do not know what to expect,” Gelfond said. “Certainly the level of business activity remains pretty strong but when and how it translates into signings I will just have to see.”
Imax, which recently signed a $110 million credit facility, is cash positive with no net debt. Gelfond said he did not anticipate raising significant capital.
Imax would only raise capital if it saw an opportunity such as a small acquisition or rapid expansion, he said.
The Toronto-based company would like to break out of its niche and expand into other markets such as live entertainment or home entertainment.
“Over time if we could figure out a way to add value on different platforms I think we would consider expanding,” the Geldfond said. “The primary area that we focus on when we think about acquisitions is in technology and ways to make the Imax experience better.”
Gelfond said he was not interested in selling the company because of the potential he sees, but would not rule it out.
“At some point if I think we could better accomplish our goals with a partner I would think about it, but it is not in the near term.”
Editing by Dan Lalor