Palace Amusement swings to quarterly profit, eyes Generation Alpha as key to cinema revival

Palace Amusement Company (1921) Ltd returned to profit in its fiscal fourth quarter and is betting on Generation Alpha — children born between 2013 and 2025 — to anchor the next phase of its cinema business.

The company reported $5.7 million in pre-tax earnings for the three months ended June 2026, reversing a $27.1-million loss in the corresponding period a year earlier, after collecting a $229.3-million insurance payout on its hurricane-damaged Montego Bay cinema. The payout was anticipated from the previous quarter.

Over the years, cinema attendance has dipped due to a series of factors now led by streaming services. Palace, in its financial report, cited research from US-based National Research Group that suggests ‘Generation Alpha’ has a stronger preference for the big screen than older audiences.

“Children and pre-teens could play a pivotal role in revitalising the theatrical movie industry,” the company stated in its quarterly report. “We intend to capitalise on any emerging opportunity to enhance the cinematic experience of our patrons as part of the Movie Theatre Market, to promote the value of theatrical releases and the potential earning capacity of the industry.”

The strategy comes as Palace navigates a sharply smaller footprint. Directors Douglas Graham and Melanie Graham said it was “not financially viable to rebuild” the Palace Multiplex in Montego Bay, which was destroyed when Hurricane Melissa struck western Jamaica in October 2025. The permanent closure, announced on March 20, left the company operating three cinemas instead of four.

Revenue for the quarter fell 35 per cent to $245.9 million from $377.5 million. Gross profit collapsed 80 per cent to $10.7 million. But $52.8 million in other operating income — the tail end of the insurance settlement — pushed the quarter into the black, while a 70 per cent drop in finance costs to $3.8 million provided additional relief.

For the full fiscal year, revenue declined 27 per cent to $961.6 million from $1.32 billion. Gross profit fell to $8.7 million from $103.9 million. The insurance proceeds, however, converted what would have been another heavy loss into a near-breakeven result: net loss narrowed to just $0.5 million from $146.9 million a year earlier. The accumulated deficit stood at $274.4 million.

The segment data underscores the strain. Montego Bay contributed $73.6 million in revenue during partial operations before closure but ran a $37.8-million segment loss. Carib Cinema in Kingston remains the strongest performer by revenue at $461.4 million, though its segment result was a loss of $22.2 million. Film distribution activities — the rental of pictures across the circuit — delivered $49.8 million in segment profit.

Cash fell 29 per cent to $111.6 million, though operating cash flow turned positive at $14.0 million, up from negative $27.7 million a year earlier. Net debt declined to $654.7 million from $682.2 million.

Beyond courting younger moviegoers, management is pursuing revenue diversification. In April, the company launched a partnership with Caribbean Premier Sports Limited, the owner and operator of Rush Sports and Rush Prime TV, along with Trend Media Group, to screen live sporting events — including UEFA Champions League football and Formula 1 racing — at its remaining venues. The UEFA Champions League Final was shown in May at Carib 5.

“It is our aim, as a company, to become known for more than the box office ticket sales — and to be viewed as an active player in the wider entertainment industry, competing for a bigger portion of that dollar,” the company stated. “The overall objective of sustainable growth is still high on the agenda, and the move towards more effective methods of product delivery is now more important than ever.”

Palace added that it wants to “maximise the per capita spending of its patrons, while creating a fulsome experience” with each visit to its cinemas that is not easily replicated at home.

business@gleanerjm.com