MUMBAI: Eros International’s stock price on London Stock Exchange’s Alternative Investment Market (AIM) shot up by Â£29 post the media conglomerate announced its annual results and forthcoming plans.
Eros’ stock, which closed at Â£392.00 on 3 July, 2007, touched a high of Â£425.00 today 4 July, 2007. At the time of filing this report, the stock was trading at Â£421.00, up 7.14 per cent. With the current stock price, the market cap of Eros International now stands at Â£435.135 million.
Eros International’s turnover for the year ended 31 March, 2007 is up 48.6 per cent to $66.4 million. EBITDA before IPO costs is up 57.5 per cent to $50.1 million.
Profit before tax, goodwill amortisation and IPO costs of the company were up 76.3 per cent to $32.5 million.
During the year the company acquired new film and music rights together with existing film catalogues of $55.2 million together with the $17.43 million of existing rights acquired as part of the re-organisation at flotation. In addition $33.3 million has been utilised to secure the rights for future film releases where the film is not yet complete and is under production by third parties. In addition the Group has utilised $3.40 million in the production of films, which will be completed in 2007-8.
The year saw a cash inflow from operating activities of $45 million. The net proceeds of the share placing of $81.40 million were principally used to increase the level of films secured for release in 2007-8 and 2008-9 as well as allow the Group to move quickly into the Indian distribution market.
The group has utilised working capital facilities to advance the acquisition of rights and to fund future film pipeline along with the placing proceeds. In the future it will utilise debt facilities if appropriate to fund further content acquisitions and expansion.
Eros International chairman and CEO Kishore Lulla said, “Eros International is at an inflection point, having created the world’s leading owner and distributor of Indian filmed entertainment. Our strong first full year results as a listed company give us confidence to forge a unique vertically integrated media company – focused on fast-growing Indian entertainment – with a strong position at the box office, in home entertainment and new media. The next development phase at Eros – coinciding with our 30th anniversary – will combine organic investment, strategic alliances and acquisitions to further extend our market leadership.”
FILMS PROJECTS UNDERWAY
The company currently has over 50 film projects in various stages of development, which are slated to release over the next two years. Eros has secured projects through acquisitions, co-productions, output deals and talent tie-ups with Venus, Sajid Nadiadwala, Anil Kapoor Films Company, Rose Movies, K Sera Sera, Big Screen Entertainment, Abbas Mastan and E Niwas amongst others.
Eros has entered into a five-year output deal with K Sera Sera to co-produce and exclusively handle global distribution of its forthcoming films. The deal gives Eros a first option on the entire K Sera Sera’s film slate of at least 17 films.
The company also acquired a 64 per cent stake in Kumar Mangat’s Big Screen Entertainment. No Smoking, Sunday, Haale Dil and One Two Three are the projects currently underway. No Smoking, starring John Abraham, is scheduled for release this summer. Eros’ first full length feature animation under development is called Toonpur ka Superstar, which stars Ajay Devgan.
Eros’ four film output deal with Rose Movies starts with the co-production of Drona starring Abhishek Bachchan and Priyanka Chopra.
Last year the company released Omkara, Salaam-E-Ishq, Eklavya and Namastey London globally, which collectively grossed $50 million. This year, Eros will be releasing Partner, Gandhi My Father, Heyy Babyy, No Smoking, Sunday and One Two Three.
Eros has also signed up stars, directors, and music directors including Soham, Anurag Kashyap, E Nivas, AR Rehman, Manish Jha and Samir Karnik.
The Eros Music label was launched, which leveraged on the company’s existing home entertainment infrastructure.
Television syndication deals were inked with Sony Entertainment Television, B4U and Zee as well as through ongoing and new deals within dubbed markets like China, Spain, Romania, Portugal, Poland, Holland and Belgium.
Apart from this new media exploitation deals were inked with Comcast, YouTube, Microsoft Online Spotlight, Intel Viiv, Mauj Telecom and OnCommand.
Eros’ new media business is established as a strategic business unit delivering maiden revenues of $6.3 million. The recently concluded deal with BSkyB for launch of a Bollywood offering on their DTH Video on Demand and Sky Broadband platform is expected to go live in September.
Eros has seeded deployment of digital cinema in B & C class towns in India. The Eros model allows existing cinema owners to retain their ownership while Eros gains control over those chains by digitising them with minimal investment. As a leading content owner this will allow Eros to monetise its films nationwide across India instead of just across metro centric multiplex screens.
The casual gaming market is exploding globally through the convergence of broadband internet, mobile phones, home entertainment and consoles with film based titles generating more than 20 per cent of gaming revenues in the US$50 billion industry.
Eros will spearhead the development of the gaming sector within the Indian media and entertainment market by building strategic partnerships to distribute and develop games.
With over 80 million cable homes in India, it is clearly one of the largest opportunities in India. As the fragmented cable market goes through digitisation and consolidation following the implementation of CAS (Conditional Access System), Eros will participate with a content driven strategy of cable channels, video on demand and value added services similar to the initiatives launched with Comcast and Rogers Cable.
The company has appointed Naresh Chandra to the main board as senior independent non-executive director. Chandra has led a political career, including as Indian ambassador to the USA, and is chairman of the advisory board of Coca Cola India Ltd among other prestigious commercial appointments.
“Our focus will be on further strengthening the acquisition of content and our distribution network. We expect to play a leading role in the next phase of the consolidation of the fast growing Indian film industry, which is expected to grow from its current $10 billion of revenues to $23 billion revenues by 2011,” Lulla concluded.