How to start a cinema

13 Appendix 2: Sample Sensitivity Analysis for one screen

In the following example the sensitivities are: Occupancy rate, film hire costs, ticket price

Bases for projections – baseline figures Scenario 1 – Occupancy rate falls to 15% Scenario 2 – Film hire costs increase to 40% Scenario 3 – Net ticket price drop to £5.20
Occupancy rate 20% 15% 20% 20%
Film hire cost 35% 35% 40% 35%
Net ticket yield £6.00 £6.00 £6.00 £5.20
Total annual perfs 800 800 800 800
No. seats 300 300 300 300
Annual admissions 48000 36000 48000 48000
Profit and loss account £ £ £ £
Box office sales (net of VAT) 288,000 216,000 288,000 249,600
Less film hire 100,800 75,600 115,200 87,360
Gross profit 187,200 140,400 172,800 162,240
Fixed costs 150,000 150,000 150,000 150,000
Net profit/loss 37,200 -10,000 22,800 12,240

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