By: Natasha Archary
The Covid-19 pandemic is affecting businesses across various industries, with the latest casualty being Ster-Kinekor Theatres. The cinema franchise has entered voluntary business rescue with hopes of rehabilitating the company, which has foreseen insurmountable losses since 2020.
The group’s acting Chief Executive, Motheo Matsau cited a decline in foot traffic to the brand’s nationwide cinemas as the reason for the move. Since the hard lockdown in March 2020, the profitability of the company had been compromised due to blockbuster film content coming to a halt.
When lockdown restrictions for cinemas were eased in August 2020, the industry had to operate under strict conditions, which allowed a limited number of cinemagoers into the theatres.
“Operating under various restrictions, including curfews, the impact meant the group had been trading at a loss and continued to incur costs,” Matsau said.
Adding to the group’s woes is the lack of content for the next four to five months which will see the business heading for further operational and cash flow challenges.
“The board is of the view that the safe harbour that business rescue provides, in terms of providing a legal moratorium, will assist the business to return to profitability once operating restrictions have been lifted, when international film distributions start to flow again.”
Ster-Kinekor said that its cinemas will remain open despite the plan to enter business rescue, adhering to the Covid-19 protocols which include temperature screening and sanitizing as well as a pre-determined seating layout for social distancing measures.