As a result of the global COVID-19 pandemic and the resulting lockdowns implemented globally and locally, Ster Kinekor was placed into business rescue. The previously successful business was severely impacted due to cinemas having to be closed as well as a slowdown in blockbuster movies being produced.
As part of the business rescue process, funding was required to re-open operations. South African-based Greenpoint Capital in partnership with London-based Blantyre Capital asked Step Advisory to investigate the future potential for the cinema market in South Africa.
Step Advisory approached the problem a couple of ways. The local market was understood in the context of other global markets to understand what the primary drivers were in terms of cinema’s recovering post-pandemic lockdowns. The state of the South African economy and the spending power of South Africans was assessed to create a reasonable population of people who could attend movies.
In partnership with Lightstone Location and Commerce the potential population was further investigated to refine those individuals who could access cinema. Finally using Ster Kinekor’s customer data and matching it with proprietary data available to Step, the potential for cinema attendance for the next five years was forecasted.
The forecast and market assessment provided by Step Advisory helped Greenpoint Capital and Blantyre Capital structure their funding proposal to help Ster Kinekor return to a profitable business in the future.