Main Event Profitability Improves Buoyed By the Recovering Entertainment Industry

  • Main Event Entertainment Group (MEEG) reported a net profit of $103.94Mn for its nine months ending July 31, 2022, which represents a $94.77Mn increase relative to the prior period. This increase was mainly attributed to an 84.6% increase in revenues.
  • The improved performance of the nine months was underpinned by increased activity from the recovering entertainment industry. The entertainment industry has seen a strong return of outdoor events and lifestyle experiences after a nearly 2-year hiatus, and this has had a positive effect on MEEG. In fact, its third-quarter revenue outturn of $601.53Mn represents the highest quarterly outturn in the company’s history.
  • The entertainment industry is expected to continue recovering in the coming months and is expected to be supported by other recovering industries such as tourism which bodes well for entertainment services companies like Main Event. However, the high inflation environment presents risks to consumers' spending on non-discretionary services such as entertainment services.
  • MEEG’s stock price has increased by 85.4% since the start of the calendar year. The stock closed Tuesday’s trading session at $8.34 and currently trades at a P/E of 22.5x which is above the Junior Market Sector Average of 20.7x.

(Source: JSE and NCBCM Research)