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The Indian Film Company: IC update
Posted 16/02/10
Since September 2009 Network 18 Holdings Limited and its associates own in aggregate 80.4% of the existing issued ordinary share capital of the Company.
Half yearly results to end September weren’t great and it’s extremely hard to see what value is in this stock for minority shareholders
BACKGROUND
The Indian Film Company Limited was admitted to trading on the AIM market in June 2007 having raised £55 million at 100p per share in order to invest in a diverse portfolio of Indian films targeted at the Indian audiences across varying genre, language and budgets.
The Company is managed by Film Investment Managers (Mauritius) Ltd., which is jointly and equally owned by Viacom Inc. and BK Media Mauritius PVT. BK Media Mauritius PVT is owned by Raghav Bahl, the founder and controlling shareholder of Network 18.
SHAREHOLDING
Since September 2009 Network 18 Holdings Limited and its associates own in aggregate 80.4% of the existing issued ordinary share capital of the Company.
They have retained the AIM quotation and expect to continue to invest in a diverse portfolio of Indian films though co-production and acquisition of high quality content in order to maximise return for shareholders. However should any aspect of the proposed strategy change, the Company will make an update to its shareholders and the market accordingly.
RECENT NEWSFLOW
20th January 2010
Network 18 Quarterly Results 31st December 2009
Network 18 Media and Investments Limited (“Network 18”), the parent company of IFC, released quarterly results on 20th January. Financial information presented in Network 18’s quarterly results includes information based upon IFC’s management accounts which have been prepared on the basis of Indian GAAP. The revenue figure being reported for IFC for the period from 1st October 2009 to 31st December 2009 in Network 18’s quarterly results is £4.16m.
The films slated for release, in the fourth quarter of the current financial year are “Striker”, “Road Movie”, “Kaun Bola” and “Banda yeh Bindaas hai”
- The Company signed up deals worth INR 240 million for satellite syndication of films in its library
- The Company’s productions and co-production projects are at various stages of completion and are progressing as scheduled.
8th Dec 2009
Unaudited half-yearly results for the six months ended 30 September 2009
Key Points
- IFC consolidated into the Network 18 Group to leverage upon its industry leading position and access to capital
- Revenues for the six months ended 30th September 2009 were down to £9.63m (2008: £15.43m) due to the two month long negotiations between United Producers and Distributors Forum and the key national multiplex cinema chains, which delayed film releases, pressure on advertising spend due to the challenging economic environment and weak performances from the movies released in the reporting period.
- Net loss for the period was £3.12 million (30 September 2008: net profit of £1.41 million).
- Unaudited net asset value (“NAV”) at 30th September 2009 was 105.44p per share (£58m); a decrease of 10.13% from the audited NAV of 117.32 pence per Ordinary Share as at 31 March 2009.
Outlook
- Strong slate of six films scheduled for release in the second half of the financial year, two of which were released by the Group in October 2009. “London Dreams” was released in the overseas territories and “Fruit ‘N’ Nut” was released at the domestic box office
- The Group’s productions and co-production projects are progressing as scheduled
- Margins from films released in the first six months of the financial year are set to improve in the second half of the financial year as one-off costs such as marketing, printing and publicity already accounted for in the six months ended 30 September 2009
CONCLUSION
Position of minority shareholders remains fragile – if that’s the correct term!
As at 30th September net assets of c£58m include Exploitation rights of £30.2m, Investments in films and films under production £18m, cash £4.4m (including term deposit £2.3m). There was a bizarre secured loan of £1.9m.
The net increase in cash in the period was £4.6m
Management admitted that the challenging economic environment has also continued to put pressure on broadcasters’ advertising income globally, reducing the broadcasters’ funds available for purchasing film content. This further impacted the Group’s operations and reduced revenues from the sale of satellite rights during the six months ended 30 September 2009.
Mandatory cash offer from Network 18, at 40p per share underpins but that’s a bout it!
No possibility of a dividend or any other return to minority shareholders in the short term!
This entry was posted 1 year, 11 months ago and was filed under The Indian Film Company.
