TV programmes producer Boomerang Plus has done well to ride out the reduction in the spending of Welsh channel S4C.
Revenues dipped slightly from £16.3m to £16m in the six months to November 2011. Some of the reduction in S4C spending was offset by a full contribution from Oxford Scientific, which was acquired at the beginning of June. Reported profit fell from £788,000 to £713,000, although it would have been higher but for £168,000 of reorganisation and transaction costs.
The factual and advertiser funded programming divisions are both growing.
Net cash was £2.96m at the end of November 2011. There is also £628,000 of potential deferred consideration.
Management believes that price expectations of potential acquisition targets are becoming more realistic.
Uncertainty about the forthcoming Communications Act is holding back the valuations of targets and Boomerang Plus itself. The Act is not due until 2014 and Boomerang Plus does not foresee anything that it should be concerned about. The trend of broadcasters outsourcing to the regions is likely to continue which would be good news for the company.
House broker finnCap forecasts a full year profit of £1.1m, up from £1m last year.
At 53p a share, Boomerang Plus is valued at £4.72m. The shares are trading on six times prospective 2011-12 earnings, which are expected to grow faster than profit because of an expected fall in the tax charge from 50% to 27%.
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