Carib 5 in Cross Roads, Kingston, is the largest and oldest of the cinemas owned by cinema company Palace Amusement. Kingston sales remain the most lucrative of the company's islandwide operations. - File

Palace Amusement closed the chapter on its Odeon Cinema Complex during the year, having finally settled with realtors who facilitated the sale of the complex to the government.

The local cinema operator paid C.D. Alexander Company $15 million for commission owed to the realty company over the sale of the property in Half-Way Tree, Kingston, back in 2000.

The property is now being developed into a transport hub.

C. D. Alexander had filed a writ of summons in the local courts claiming outstanding commission of five per cent on the sale price $172.5 million, which totalled $9.9 million inclusive of general consumption tax of 15 per cent at the time.

Close cinemas

In its audited financial statements for its year ending June 30, Palace noted that "the courts ruled that the company (Palace) be liable for commission, and accordingly the company paid $15,078,000 representing the amount plus interest accrued to the date of payment."

But having closed the chapter on Odeon, the fate of Harbour View Drive-in, which was written off the books and put on the auction block in late 2004 after being devastated by Hurricane Ivan in September 2004, remains undecided, and Palace is still haemorrhaging from what the company cites as a declining economy and the negative revenue pull of DVD piracy.

Marketing manager, Melanie Graham, a month ago, told the Financial Gleaner that the cost of a movie ticket, $410, was comparable to the price of a pirated DVD movie.

The fall-off had been so significant that the cinema operator has had to close two of its operations over a one-year period - the Portmore cinema in St Catherine last year, and Island Cinema in New Kingston, the year prior.

This left Palace with 13 screens operating from four locations islandwide - Carib Five in Cross Roads and Palace Cineplex in Liguanea, both in Kingston; Palace Multiplex in Montego Bay; and Odeon Cineplex in Mandeville.

Kingston remained the best performer for the longtime movie company, which has been drawing criticism from financial analysts over its unwillingness to diversify.

Kingston's two cinemas revenue remained flat at $260 million for the year to June, when compared to the previous year, but gross profits fell from $93 million to $77 million, a 17 per cent drop.

But the $260 million in revenue from its 1,704 seats in the capital meant that each seat grossed $152,000, almost twice as much as the 835 seats in Montego Bay, which earned $81,000 per seat, and almost two-and-a-half times that earned from the 390 viewing positions in Mandeville, which earned $67,000 per seat.

Bleeding losses

Importantly, the operations in the north west and centre of the island continued to bleed red ink.

MoBay's losses grew from $1.5 million in 2005 to $3 million for the year to June 2006, while the Mandeville operations saw its losses improve from $8.6 million in 2005 to $7 million this year.

Palace Amusement film rental to the Cove Cinema in Ocho Rios, and exclusive rights for film distribution to major companies and independent companies for Jamaica and the Cayman Islands, earned the company $23 million in revenue, an improvement over the $14 million made from the same activity last year.

The core of the cinema business, box office ticket sales, declined dramatically from $245 million to $213 million during the year, while confectionary sales remained flat at $104 million.

camilo.thame@gleanerjm.com