It was quite a shock to hear the man credited with creating the genre predict its demise. Though his skill as a blockbuster-maker can’t be questioned, Steven Spielberg’s ability to forecast larger trends and diagnose the longer-term health of the current Hollywood studio system is susceptible of reproach.

During the summer of 2013 we’ve witnessed the outright failure or simple underperformance of would-be blockbusters such as The Hangover Part III, After Earth, The Internship, White House Down, The Lone Ranger and Pacific Rim–six expensive disasters during Hollywood’s peak season that will lose hundreds of millions of dollars for the various studios.

Nevertheless, box office for this season was 10 percent ahead of last summer’s. Ticket prices are up an average of about 2.5 percent, so that’s part of the equation.

Another part is surprise hits from outside the blockbuster mold such as Now You See It, The Purge and The Conjuring. The rest is due to the system working as planned for such blockbusters/sequels as Iron Man 3, Fast and Furious 6, Monsters University, Despicable Me 2 as well as franchise-to-be World War Z (headline star is currently “considering” a follow-up) and Superman reboot Man of Steel, which has set the table for Batman vs. Superman in 2015.

The scope of Mr. Spielberg’s errors may be limited to timing. Hollywood can clearly absorb several big-budget disasters that fail to support sequels. If, however, in the summer of 2015, for example, Batman vs. Superman, The Avengers 2, Independence Day 2, The Smurfs 3, Pirates of the Caribbean 5 and the rebooted Terminator fail to generate big box office returns the prevailing model may fail.

During the same talk he offered his “blockbuster” warning Mr. Spielberg, appearing with his frequent collaborator and fellow genre magician George Lucas, forecast that the future of film distribution is likely through in-home video-on-demand (VOD) and streaming, with theatrical releasing becoming a specialty business.

For the foreseeable future, AE Portfolio Aggressive Holding Amalgamated Holdings Ltd (ASX: AHD), the No. 1 cinema operator in Australia and New Zealand, doing business under the Event Cinemas brand, and the market leader in Germany, under the Cinestar brand, is well placed to profit.

That’s borne out by a 7.7 percent increase in total dividends paid in respect of fiscal 2013 versus fiscal 2012.

With more than 1,000 movie screens in Australia, New Zealand and Germany Amalgamated is the No. 9 movie exhibitor in the world.

Amalgamated is one of the most technically advanced theater operators in the world, as it’s invested heavily to upgrade its capabilities to include 3D and digital projection. This promises higher-margin receipts at the box office.

Making movies work as an investment is a matter of smoothing out box office revenue that can be as volatile as any Hollywood diva or director. Amalgamated has complemented its movie business with hotel operations and a ski resort, a mix that establishes it as a global leisure services provider.

Amalgamated’s portfolio of assets includes hotel brands Rydges and QT; the company will soon debut the first of its new value brand Atura Hotels at Blacktown, Sydney. Amalgamated also owns the Thredbo Alpine Resort and has significant property holdings.

The primary reason Amalgamated is an Aggressive Holding and not a Conservative Holding is that it doesn’t trade on a US exchange. Its ordinary share is listed on the Australian Securities Exchange (ASX) under the symbol AHD, while it’s also listed on the Frankfurt Stock Exchange under the symbol AQH.

Amalgamated reported net profit after tax for fiscal 2013 of AUD85.8 million, up 7.6 percent compared to fiscal 2012. Normalized profit before finance costs, significant items and tax increased by 12.2 percent to AUD118.3 million.

Total revenue for the year was up 2.2 percent to AUD815.5 million. Earnings per share were AUD0.543, while total dividends paid and declared on the fiscal year’s result were AUD0.42. The payout ratio for the period was 77.3 percent.

Cinema exhibition in Australia produced earnings before interest and tax (EBIT) of AUD60.1 million, up 11.5 percent from the prior corresponding period, as higher merchandising sales drove an 8.6 percent increase in revenue per admission.

Amalgamated now has 486 screens Down Under, with 480 featuring digital projectors.

New Zealand cinema exhibition produced EBIT of AUD3.8 million, up 14.7 percent, as merchandising revenue was up 5.2 percent. Amalgamated has 116 screens in New Zealand.

German cinema generated EBIT growth of 40.7 percent to AUD26.1 million, as box office urged in June to pace an 8.7 percent year-over-year increase. Management reported a 6.6 percent increase in the average admission price, driven by the surcharge on increased 3D ticket sales.

Amalgamated now has 420 screens in Germany.

Managing Director David Seargeant noted that the lineup of movies that opened through June 2013 “was outstanding” and drove record box office results across Amalgamated’s markets in Australia, New Zealand, Fiji and Germany. June 2013 was a major driver of “a very pleasing” full-year result.

Major blockbuster movies for the year included the end of Christopher Nolan’s Batman trilogy The Dark Knight Rises, Skyfall, the 23rd official James Bond film, The Hobbit: An Unexpected Journey, which will be followed by The Desolation of Smaug in December 2013 and There and Back Again in December 2014, and Iron Man 3.

Normalized EBIT for the hotels and resorts segment slipped 22.8 percent to AUD20.5 million, as declines at Gladstone and Townsville hotels and the operating loss for the first nine months of operation of QT Sydney were only marginally offset by QT Gold Coast’s improvement over fiscal 2012.

Management noted that conditions, particularly in the second half of the year, were “quite tough” in the Hotel segment, with renewed pressure on room rates. Of particular concern was the corporate travel market, reflecting bearish sentiment across the Australian corporate sector.

Amalgamated opened its flagship QT Sydney Hotel during fiscal 2013, the key property headlining QT-branded resorts at Port Douglas and Gold Coast and the recently acquired QT Falls Creek.

The Thredbo alpine resort enjoyed “generally good conditions” throughout the season and posted a strong profit.

Management attributed the EBIT decline to softening demand from resource-related businesses and tighter restrictions on travel at the federal and state government levels hurting results in regional locations, partially offset by “reasonable” performance for hotels in major mainland capital cities.

Thredbo posted a 10.6 percent increase in normalized EBIT, as natural snowfall during the 2012 season made for the best skiing conditions since 2004. Skier days were up 17 percent for the July-to-October period.   

Cash and term deposits as of June 30, 2013, were AUD92.8 million, while total debt outstanding was AUD78.5 million.

Amalgamated declared a final dividend of AUD0.27 per share, up 8 percent from AUD0.25 a year ago. That brings the full-year dividend to AUD0.42, an increase of 7.7 percent over the AUD0.39 paid for fiscal 2012.

Amalgamated Holdings has been paying a dividend since November 1986, with no cuts since 2001, and the interim and final cuts that year were the only ones in the company’s 26-year payout history. A net cash position and low overall debt provide plenty of safeguard for the dividend going forward.

Amalgamated’s track record continues to demonstrate its proven business model. Management has also proven itself capable by updating movie exhibition technology in a timely way, converting legacy properties into new revenue generators and closing other sites while selling them for others to develop.

There’s also solid potential for uplift in hotel and leisure results once the Australian economy rebounds from its current mild malaise. As it is the movie business has proven its ability to withstand softer economic conditions and to support Amalgamated’s other interests.

Since we added it to the Portfolio in November 2012 Amalgamated has generated a total return in US dollar terms of 19.9 percent, outperforming the S&P/ASX 200 Index’ 12.5 percent gain. Excluding the impact of the softer aussie Amalgamated is up 33.6 percent, including dividends, from Nov. 16, 2012, through Sept. 12, 2013, versus 25.3 percent for the local benchmark.

In short Amalgamated stands on a solid foundation on which to grow future business expansion and, in turn, shareholder returns.

Based on the recent dividend increase, Amalgamated Holdings is now a buy under USD8 on the Australian Securities Exchange (ASX) using the symbol AHD.

Amalgamated stock closed at AUD8.36 on the ASX on Sept. 12. Based on the prevailing exchange rate as of this writing, that’s USD7.75 in US dollar terms.

Amalgamated Holdings’ fiscal year runs from Jul. 1 to Jun. 30. The company reports full financial and operating results twice a year; it typically posts first-half results in late February, with full fiscal year numbers out in late August.

Interim dividends are usually declared in February, along with financial and operating results for the first half of the fiscal year, with payment typically made a month later, in March. Final dividends are usually declared in August, along with fiscal year results, with payment made in September.

Amalgamated’s final dividend in respect of fiscal 2013 of AUD0.27, declared on Aug. 22, 2013, will be paid on Sept. 19, 2013, to shareholders of record on Sept. 5. Shares traded ex-dividend on this declaration as of Aug. 30.

The most recent interim dividend of AUD0.15 per share was declared Feb. 21, 2013. It was paid March 21, 2013, to shareholders of record as of March 7. Shares traded ex-dividend on this declaration as of March 1. The fiscal 2013 interim dividend was up 7.1 percent from the interim dividend paid for fiscal 2012.

Management will declare the interim dividend for fiscal 2014 on or about Feb. 20, 2014, when it reports financial and operating results for the first six months of the financial year.

Dividends paid by Amalgamated are “qualified” for US tax purposes. Based on the “fiscal cliff” compromise reached in Washington, DC, in early January 2013 dividends will be taxed at Bush-era rates of 5 percent to 15 percent for investors’ first USD450,000 a year of income for couples and USD400,000 for single filers. Above that the maximum tax rate is 20 percent.

The Australian government withholds 5 percent to 15 percent, based on the US-Australia tax treaty on double taxation. The two countries have not taken the step of eliminating withholding from dividends paid in respect of shares held in a US IRA, as have the US and Canada.

Among the analysts who cover the stock one rates it a “buy” according to Bloomberg’s standardization of brokerage house recommendation terminology, while one rates it a “hold.” One brokerage that covers Amalgamated rates the stock a “sell.”

The average 12-month target price between the two analysts that provide a figure is AUD8.77, with a high of AUD9.35 and a low of AUD8.20.  Based on a Sept. 12, 2013, closing price of AUD8.36 on the ASX, the implied one-year total return, including the present annualized dividend rate of AUD0.42, is 9.9 percent.