Beyond International Limited (ASX code: BYI) one of Australia’s leading television production and distribution companies today announced that in the twelve months to 30 June 2007 the company’s EBITDA increased 29% to $12,140,000, profit before tax rose 50% to $6,170,000 with a growth in revenue of 4% to $68,426,000. The company has declared a full year dividend of 4 cents per share, an increase of 33% on the previous year.
Commenting on the results Mikael Borglund, Managing Director, Beyond International Limited said:
‘We are pleased with this strong performance and are particularly delighted by the contribution made from our non fiction television production division and our acquisition of Force Entertainment. The Force business will enable the Company to more effectively exploit content assets in media such as video on demand and Internet download services.
‘We also continue to see strong growth in the international sales of our television productions, driven by interest in programmes such as Mythbusters and What’s Good For You. This international success and the overall continued growth of the company has led us to look at ways of expanding the business through both organic growth and acquisitions.
‘The outlook for the year is positive with EPS expected to increase in a range of 15% – 20%. I would like to thank the professional, creative and enthusiastic contribution of our management, staff and contractors which is key to the continued excellent performance of the Company.’
* Review of Operations
In the twelve months to 30 June 2007 the Company’s net profit increased by 40% to $4,340,000. This is in line with the guidance issued to the Australian Stock Exchange during the last financial year by the Company.
EBITDA has increased by $2,735,000 to $12,140,000 and EBIT has increased by $1,706,000 to $6,524,000. The EBITDA margin has improved from 14.2% to 17.7% and the EBIT margin has improved from 7.3% to 9.5%.
Revenue grew modestly by 4% to $68,426,000 due to the closure of the feature film sales division, the exit from high turnover/low margin drama production and the substantial decline in the US$ against the A$ during the year.
Revenue from non-Australian sources is $43,741,000 being 64% of total revenue for the year ($40,293,000, 61% of total revenue for the 2006 year).
The improved profit was primarily the result of the consistent performance of the non-fiction television program production division, the international sales division and the contribution from Force Entertainment, which was acquired in September 2006.
Net cash flows from operating activities were $7,102,000 (2006: $7,216,000). Total Current Assets have increased by $2,487,000 to $31,687,000 (2006: $29,200,000) whereas current liabilities have decreased by $1,261,000 to $11,276,000 (2006: $12,537,000).
Total Group Bank Debt has reduced by $2,409,000 to $1,696,000 at 30 June 2007.
The Company has budgeted to achieve 15% to 20% net profit growth during the financial year 2007/2008.
* Beyond Productions and Copyright Production Companies
The production and copyright division has continued to trade profitably with operating earnings before tax of $10,203,000 (2006: $11,083,000). This is a decrease of $880,000 or 8% compared to the prior period. The decrease is primarily due to the impact of the decline in the US$ to the A$ during the year of 15% and an increase in the negative contribution from the dSP Beyond subsidiary of start up costs of $650,000.
Program production revenue declined by $2,716,000 or 6% to $42,826,000 from $45,542,000, which is primarily due to the exchange rate, and the Company ceasing to produce high cost drama programs which contributed $4,808,000 to the 2006 revenues.
In 2007 foreign sourced income totalled 67% of total segment income compared to 55% in 2006.
Television series produced by Beyond in 2006/2007 include the following popular programs:
What’s Good For You;
Beyond Tomorrow;
Mythbusters;
Hot Property;
Prototype This;
Hard Shine;
South Side Story;
Taboo;
Wrecks to Riches;
You May be Right;
Best Backyards;
Money Talks;
Kids Space;
Singing Office;
and
Backyard Science
as well as a number of series and short form programs for Discovery Channel, National Geographic Channel, Home and Garden Television, Discovery Health, Animal Planet and TLC.
Pacific and Beyond Pty Limited, a 51% subsidiary produced the third series of the pre school program New MacDonald’s Farm for the Nine Network. The company also produced a new children’s series called Milly Molly.
Revenue from television production is expected to increase both internationally and domestically as a result of growth in the Australian pay television market and the Company’s initiatives in expanding its US based business.
* Distribution: Beyond Films, Beyond Distribution and Force Entertainment.
Revenue from the sale of television programs, feature films and DVD’s increased by $4,861,000 to $24,983,000 (2006 $20,122,000). Segment profits are $596,000 (2006 loss $1,200,000) including a negative contribution from the discontinued film division of $579,000 (2006 loss $784,000). The film division ceased trading in January 2007 and the television sales division is marketing the catalogue of over 150 feature films.
Sales of finished television programs by Beyond Distribution in the international market have grown by 8% to $14,178,000 (2006 $13,118,000) due largely to the international success of programs produced internally such as Mythbusters, Beyond Tomorrow, What’s Good For You, Medical Incredible, Wrecks to Riches, Milly Molly, New MacDonald’s Farm and South Side Story.
In addition to these programs the company has acquired the rights to a number of television series that are internationally marketable including: I Do Lets Eat, Lonely Planet Six Degrees, Maxed Out, and Numberjacks.
In September 2006 the company acquired the digital and DVD distribution business Force Entertainment. As stated previously, Beyond intends to use Force as the cornerstone to aggregate digital media companies. This will enable the Company to more effectively exploit content assets in media such as video on demand and Internet download services.
As a result of the acquisition of the Force Entertainment business (51% owned) in September 2006 revenues from DVD sales have increased by $5,814,000 to $7,075.000 with earnings growing from $223,000 to $1,400,000.
* Share Buy Back
To date the Company has purchased and cancelled 652,551 of its shares under the share buyback announced on 25th May 2006. The Company expended $416,679 on the purchases, being an average price of 64 cents a share. The share buy back scheme has now expired.
During the past twelve months the Company’s shares have traded as low as 68 cents and as high as $1.04.
* Dividends
Having paid an interim dividend in April 2007, the Company will pay a final dividend of 3 cents per share in November 2007. This brings the total dividend for the year to 4 cents per share and is an increase of 33% over the prior year.
* Outlook
The Company is in a solid financial position with a robust balance sheet and strong operating cash flow.
In order to capitalise on these strengths the Company intends to continue to grow its business organically and through acquisitions.
Organic growth will come from increasing the revenue and output of the television production businesses – this will be achieved by continuing to work closely with our local and international content customers and investing in the development of content which can be produced and then exploited across multiple distribution channels. The Company intends to expand its activities in the United States by establishing additional operations on the South West Coast in addition to its existing production offices in Washington DC and San Francisco.
Management has identified a number of complementary production businesses as potential acquisition opportunities. These businesses are located in Australia, the US and the UK. These acquisitions would give the Company access to new program genres and customers and the international sales rights would be exploited through the existing international distribution infrastructure.
The international distribution business has developed strong relationships with independent producers throughout the world, but specifically in Australia, New Zealand, UK and Canada. The exploitation of this new acquired content – together with content produced in house – will lead to efficiencies in utilising Beyond’s international sales and marketing infrastructure located in Ireland, the UK and Australia.
The Directors have adopted Earnings before Interest, Tax and Depreciation (‘EBITDA’), Earnings per Share (‘EPS’) and Dividends per share (both the absolute amount paid per share and total dividends paid as a percentage of Net After Tax profits) as key financial performance measures. EBITDA and EPS are targeted to increase in a range of 15% to 20% per annum for the next three financial years.
Dividends per share are targeted to increase steadily in the three years to 30 June 2010 from 4 cents per share in 2007 to 6 cents per share in 2010.
The professional, creative and enthusiastic contribution of our management, staff and contractors is key to the excellent performance of the Company in 2007.
For more information visit http://www.beyond.com.au/
[release from Beyond]