The merger of its US home entertainment business should help Contentfilm recover this year.
Contentfilm will merge its Allumination business with the US home entertainment division of Peace Arch Home Entertainment and each vendor will own 50% of the merged entity. Contentfilm’s share of the combined overheads should decline from £3m to £1.2m in the first full year.
This business was the main reason behind the fall in underlying profits from £3.5m to £1.7min the year to March 2008. Allumination went from a profit to loss. Management were distracted by potential bid talks and didn’t focus on sorting the business out.
The rationalisation will come at a price. There are likely to be one-off costs of up to £400,000 relating to the closure of Allumination’s office. Contentfilm will consolidate 50% of the merged entity’s revenues and profits.
Contentfilm was originally known as Winchester Multimedia. It joined Aim from rule 4.2 on 27 June 1995 – making it one of the earliest Aim entrants. Under new management in recent years it has concentrated on TV programme and film distribution.
TV programme distribution is now the main contributor to the business and Contentfilm is starting a new factual entertainment division. There will also be an initial contribution this year from the CBC TV library acquired at the end of the last financial year. The film distribution side is much smaller but is still contributing profits to the group.
The shares fell 0.125p to 7.375p, valuing the company at £12.9m.
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