Tuesday

Village Cinema 30% Dividend Yield

Post a Comment May 12, 2009 – 4:25 pm |   | Permalink |  Print This Post |

We love buying things at all time low. With everything going against Village Cinemas (economic crisis, DVDs and home theatre sets, online movies), its share price is almost at all time low (and deservedly so). We are however, taking a punt on Village (VRL.AX on Yahoo) tomorrow at 0.80, only a small initial parcel of 700 shares. For those who are not aware, every shareholder will get a booklet of 10 FREE movie tickets every year - thats worth $12-15 (children or adult respectively) x 10 = ie $120 to $150 per annum. That is a dividend yield of 30% on movie tickets alone excluding cash dividends and potential for price increase. And if you are not a fan of cinemas, just Ebay them for $10 per ticket. There is also the potential for a paradoxical increase in movie goers as people cut back on other expenses. VRL also owns non-cinema businesses (Hamish and Andy Radio show) which is doing relatively well. The theme parks will probably bleed cash (our main concern). Regardless, as long as they remain in the cinema business and continue to distribute 10 free movie tickets a year, we will be happy to hold our $560 worth of Village shares. Speaking of movies, here’s a list of movies we intend to watch after we become proud shareholders of Village (in no particular order):

1. Star Trek (watched that tonight - 4/5 stars!)

2. The Terminator

3. X-Men Origins

4. Harry Potter (5?)

5.  Angels and Demons