News blog
Independent Media Distribution
- BY: Andrew Hore |
- POSTED: 18/09/2009 |
Independent Media Distribution has reported better than expected interim revenues and profits.
IMD distributes advertising online to TV and radio stations. It also offers booking management and other software and services to the broadcasting sector.
The loss of a reseller led to a fall in revenues but 50% of the work has been won back at better prices because IMD no longer has to pay the reseller. More work could be won in the second half. IMD also had to cope with lower revenues from the radio sector.
Revenues from new products helped offset some of the shortfall but revenues still declined from £3.76m to £3.65m in the six months to June 2009. Profits fell from £629,000 to £463,000 but that shortfall should be made up in the second half. Business start up losses fell but the new French business is still losing money. The German business is profitable but it has been hit more by the recession.
IMD returned to a net cash position at the end of June 2009. The business is highly cash generative and net cash was £799,000 at the end of the period. That enabled IMD to pay an interim dividend of 0.5p a share. That is lower than the corresponding interim but 43% higher than last year’s final dividend.
IMD World made an initial contribution in the first half. This service is offered to agencies adapting or reversioning existing adverts to local markets. These adverts are then distributed around the world by IMD, sometimes directly sometimes through partners. This is lower margin work but IMD has distributed to more than 50 countries so far.
The new archiving service IMD Index will generate revenues in the second half.
IMD is a highly cash generative business which is not directly affected by the level of advertising spending – TV advertising spend has declined by 17% over the past year. IMD delivers the advert once and it does not matter how many times it is shown.
At 47.5p a share, IMD is valued at £16.2m.
House broker Charles Stanley forecasts an improvement in full year profits from £1.1m to £1.3m. That suggests a strong second half. The recent rise in the share price means that the shares are trading on 16 times prospective 2009 earnings. The nature of the business means that it warrants a higher rating than those companies directly exposed to advertising spend.
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