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Boomerang Plus

  • BY: Andrew Hore |
  • POSTED: 22/10/2008 |

Boomerang Plus is benefiting from the pressure on broadcasters to make more TV programmes in the regions as well as Scotland, Wales and Northern Ireland.

This cushions it from worries about how spending on programmes will be affected by falling advertising revenues.

The Cardiff-based TV and radio programme producer is already in the top five independent television producers outside of London.

Most of the company’s revenues come from Welsh language channel S4C and the BBC so it is not as affected by advertising revenues as some TV producers. Boomerang Plus does not have much exposure to ITV but it does supply programmes to Channel 4, which has been moaning about its lack of revenues recently.

Boomerang Plus acquired post-production business Mwnci and drama programme producer Apollo in 2007. These made full contributions to the figures for the year to May 2008. A full contribution from the two businesses in the previous year would have added revenues of £2.93m and profits of £477,000.

Even taking that into account, the increase in revenues from £10.5m to £20.9m in the year to May 2008 was impressive. Stripping out the costs of floating on Aim and the bid talks with DCD Media and the previous year’s impairment provision, profits improved from £782,000 to £2.1m. 

The business was cash generative and the cash raised in last year’s flotation has hardly been touched. There was net cash of £6.33m at the end of May 2008. This is helped by prepayments for programmes but the underlying cash position is still strong.

Boomerang Plus is still on the look out for more acquisitions outside of the M25. The failed merger talks with Aim-quoted DCD Media meant that management did not pursue other acquisitions last year. Management wants to add more businesses to its existing programme areas, particularly the sports and branded content area of the business. 

Multiples being paid for TV producers are much lower than 12 months ago.

Boomerang Plus will also look at potential acquisitions in London.

At 167.5p each, the shares are still above the 7 November 2007 placing price of 158p. Boomerang Plus is valued at £14.9m.

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