Eros to shift from AIM to London’s main market post India listing; lines up 12 films

MUMBAI: Eros International is planning to shift from the Alternative Investment Market (AIM) to the Main Market of the London Stock Exchange post the completion of its India listing.

"We now have over three years of track record of successful growth on AIM and believe that the Main Market represents a natural progression for Eros given our size and maturity as a business. We also hope to access additional pools of investment capital and liquidity as a result of the planned move," the company said.

The company filed the Draft Red Herring Prospectus with SEBI (Securities and Exchange Board of India) for its Indian subsidiary Eros International Media Limited on 31 December, 2009 in order to list on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The listing is pending approval of SEBI.

The company also posted its preliminary results for the year ended 31 March, 2010. Eros’ profit before tax was up two per cent to $49.5 million as compared to $48.4 million in 2009. However, Eros’ revenues were down by four per cent to $149.7 million as compared to $156.7 million in 2009. The decline in revenue partially reflects the fallback in television syndication following 94 per cent growth in the previous year and only a modest increase in theatrical revenues, which was capped by the multiplex dispute which reflected theatrical releases in the opening quarter of the financial year.

Eros International chairman Kishore Lulla said, "I am delighted and proud that Eros has been able to deliver another set of strong results ahead of market expectations and consistently meet the objectives identified when we listed in 2006. We are now poised to take on the next phase of consolidation over the next three to five years,"

Theatrical revenues grew by eight per cent to $50.2 million as compared to $46.3 million in 2009. The performance of the films released during the year is highlighted under the backdrop of the standoff with the Indian multiplex chains as a result of which no films were released from April to June 2009. In the latter half of the year, Eros released movies like Love Aaj Kal, Kambakkht Ishq and De Dana Dan.

Television revenues fell by 17 per cent to $52.9 million as compared to $ 64 million in 2009. The fall was in line with expectations as TV revenues had grown by a staggering 94 per cent in 2009 from just $ 33 million in 2008. TV revenues came from new and existing deals with Star, Zee TV, Sony, Sun TV, B4U, Kalaignar TV and other television broadcasters in India as well as dubbed and subtitled markets internationally. Eros also acquired the satellite rights to 3 Idiots and a few catalog movie from Vinod Chopra Films.

On the digital and home entertainment front, Eros saw revenues up by one per cent to $46.6 million as compared to $46.2 million. Subscription video on demand service partners in North America continued to grow with the addition of Time Warner and Cox to the existing partners of Comcast and Cable Vision. Digital Music revenues were strong, led by Love Aaj Kal. Several films were exploited across DTH platforms in India on Pay Per View basis, marking the beginning of a new revenue stream. On the home entertainment front, Eros released 11 Blue-Ray titles. However, the company said that the in line with expectations DVD sales and pricing to expatriate south Asians continued to decline as the move to digital delivery continues.

Eros also entered into an agreement with EMI Music Publishing to push the Eros publishing catalogue internationally through the EMI’s network and vice versa for the EMI catalogue in India.

The company’s slate for 2011 and 2012 comprises 12 movies namely Anjaana Anjaanee starring Ranbir Kapoor and Priyanka Chopra; Golmaal Returns 3 starring Ajay Devgn and Kareena Kapoor; No Problem starring Anil Kapoor and Sanjay Dutt; Toonpoor Ka Superhero starring Ajay Devgn and Kajol; Mausam starring Shahid Kapur and Sonam Kapoor; Agent Vinod starring Saif Ali Khan and Kareena Kapoor; RA.One starring Shah Rukh Khan and Kareena; Desi Boys starring Akshay Kumar, John Abraham and Deepika Padukone; Rockstar starring Ranbir Kapoor and one yet film each with Red Chillies Entertainment, Boney Kapoor and Saif Ali Khan.

Apart from these, Eros also has a slate of regional films in Marathi, Punjabi and Tamil and some smaller scale Hindi releases.

Content capital expenditure in the year reduced significantly by 37 per cent to $81.5 million as compared to $129.7 million in 2009. With declining capex and positive cash flows from operations, 2010 marked an inflection point in group cash flows following the investment associated with the move into global distribution as we came to AIM in 2006. Going forward this normalisation should continue," the company said.

Since the AIM listing in 2006, Eros has invested $475 million in content advances. "We can see the cash flow cycle turning around this year with net cash flow from operations before interest and taxes of $121.3 million exceeding the content capital expenditure in the year of $81.5 million. Of the investment of $475 million, film content of $362 million has been released with 93 per cent or $336 million flowing back following exploitation. The $352 million of released content equates to 256 film releases as well as catalogue investments in line with the Group’s portfolio approach strategy," Lulla said.

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