Main Event performance improves in third quarter, but not enough

Main Event Entertainment Group Limited, MEEG, a bellwether of the entertainment sector, emerged from its July third quarter with improved profit of made $28.8 million profit and an upbeat outlook.

The company’s focus on top-line and cost management led to growth in the quarter, despite a challenging first-half of the year.

Profit rose 23 per cent while revenue improved by three per cent to $440 million, compared to $428 million in the same period last year.

Inflationary pressures over the last two years have impacted disposable income, the health of which the entertainment sector is reliant on for business to thrive. Consumers prices have cast a shadow but pay increases in certain quarters of the economy have helped to offset the rising cost of living.

Inflation continues to meander in and out of the central bank’s 4-6 per cent target range. In July, the annual rate was 5.1 per cent, but in August, a month after Jamaica was swiped by Hurricane Beryl, leading to damaged homes and decimated food crops, the annual rate was back in breach at 6.5 per cent, amid a 2.4 per cent monthly rise in consumer prices in that month.

While the May-July quarter was robust for MEEG, its year-to-date performance has dwindled relative to 2023. For the nine-month period, revenue fell 10 per cent to $1.4 billion from $1.6 billion, and profit declined by 30 per cent to $149 million.

“As we move into the final quarter of our financial year, we remain resilient, agile and optimistic that with our talented professional and dedicated team, we will successfully navigate the challenges ahead,” Chairman Dr Ian Blair and CEO Solomon Sharpe said in a statement to shareholders.

Main Event provides stage and lighting equipment for parties and stage shows. It is among the largest and most formalised players in the entertainment sector with its shares listed on the Jamaica Stock Exchange.

The creative sector, comprising film, animation and music, is valued at about $128.5 billion, or 6.2 per cent of GDP, according to the Economic Impact Study for Jamaica’s Film, Animation and Music Industries report. That’s roughly on par with the agriculture, or the construction sector, according to the report published in 2021 by A-Z Information Jamaica Limited for the Jamaican government’s marketing agency Jampro.

Main Event spent $106 million from its cash holdings to purchase equipment, which was around the same amount invested the previous year. The acquisition only marginally raised its total assets to $1.25 billion, of which its capital totalled $960 million, reflecting low debt.

steven jackson@gleanerjm.com