Local distributor Madman Entertainment has posted an annual profit of $9.86 million (before centralised costs) despite facing a challenging home entertainment market.
A year earlier Madman posted a profit of just $223,000 after its result was hurt by impairments. Madman is part of listed parent company, Funtastic, and it generated more than one-third of the company’s annual $25.27 million profit. After costs, Funtastic posted a net profit of $9.83 million, a turnaround on the $38.2 million loss it posted a year ago.
In its annual report, Funtastic’s directors said Madman had outperformed the industry in 2011-12 in a challenging market.
“Madman has adapted well to the changing industry landscape and is well poised to capitalise further on the emerging digital delivery channels as they become more established. In addition, the content pipeline which Madman has now to support the next 12-18 months is as strong as at any point in the company’s history.”
The home entertainment market is being hit by rampant piracy and a slow shift to legitimate online distribution. DVD and Blu-ray sales peaked at $1.4 billion in 2008 and have been declining ever since according to the Australian Home Entertainment Distributors Association, while retailers are often selling DVDs at below wholesale prices.
Madman Entertainment’s total annual revenue of $51.04 million was slightly below the $52.51 million It posted a year earlier. Just over two-thirds of its revenue was derived from four major customers, according to the annual report.
Madman co-founders Tim Anderson and Paul Wiegard both received cash bonuses of $100,000 over the year because Madman Entertainment’s earnings before interest, tax and amortisation expenses exceeded $8 million target. Anderson was paid a total of $470,495 while Wiegard was paid $475,360, according to the annual report.