It’s hardly a shock to see the Cineworld Group (LSE: CINE) share price slipping again in recent hours. The UK share fell in end-of-week trading after news emerged that the release of the latest James Bond flick was being delayed again due to Covid-19. It’s now set to hit screens in October.
The latest 007 outing, No Time To Die, is arguably the most high-profile casualty of mass cinema closures. But it’s not the only money-spinning title whose release date has been put back again in recent days. Other theatre fillers subject to additional delays into 2021 include the next Ghostbusters, Peter Rabbit and Cinderella adventures.
This adds an extra problem for Cineworld and its debt-heavy balance sheet. The cinema giant is already in huge danger as Covid-19 lockdowns keep its UK theatres closed. The UK share has enough money to last until May following fresh fundraising in November. But soaring infection rates mean that its projectors are unlikely to crank into life again any time soon. A worsening US crisis might cause it to keep its Regal theatres in the States shuttered as well.
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2 better UK shares I’d rather buy today
I sold my holdings in Cineworld a couple of months ago as fears over its existence hit fever pitch. And while its price has rocketed since then, I fear that the cinema chain could still go all the way to zero.
I’d much rather buy other UK shares in my Stocks and Shares ISA today. Here are a couple that are on my shopping list.
#1: Ryanair Holdings
Budget flyer Ryanair is, like Cineworld, still suffering as efforts to control Covid-19 keep its planes grounded. Indeed, in recent sessions the Irish flyer downscaled its full-year flight forecasts in response to fresh travel restrictions across some of its European markets.
But this UK share — unlike the aforementioned cinema chain — has the balance sheet strength to allow it to ride out the crisis. As the boffins at Morgan Stanley note, Ryanair has “ample liquidity to fund cash losses if recovery takes longer.” Airlines remain a risky investment, but its considerable financial strength will also let it ramp up capacity faster than its rivals when its markets begin to open up again. I think this puts it in pole position to make big profits again.
#2: Barratt Developments
I’d also much rather invest in housebuilders like Barratt Developments than Cineworld. Indeed, I decided to hold on to my shares in the FTSE 100 firm when I sold my holdings in the cinema chain. And I don’t think I’ll be regretting my decision.
Traditionally, UK shares like Barratt take a huge hit when economic conditions deteriorate. And it’s quite possible that the housebuilders could see sales slip as Britain moves into a double-dip recession. But I think that market conditions will remain strong enough for the Footsie firm and its peers to still make decent profits. Low interest rates and government loan schemes, allied with a huge shortage of properties entering the market, should keep new-build home demand soaring.
