Morgan BellVillage Roadshow Forecasts a Profit
January 4th 2007 11:19
Village Roadshow has a very interesting mix of business from film production to cinemas and theme parks. Yet, its earnings are erratic and last year it incurred a loss. Stay with me for more on this company.
The news today, 4 January 2007, is that “Village Roadshow, the film production company and theme park operator, has upgraded its profit forecast for the coming year by more than a third after having to change its accounting policies to capture fully the hedging costs on the loans it takes out to make films.”
“The company, which made the high-grossing Matrix trilogy and has another smash hit with the penguin singing and dancing film Happy Feet released on Boxing Day, now expects to make a net profit after tax of $36 million this year compared with the previous forecast of $25-$27 million.”
“The new forecast, contained in a statement to the Australian Stock Exchange yesterday, comes after six months of negotiations with Village’s auditors and accounting standards regulators over new international accountancy rules introduced in the past two years.”
This news was published in the online version of The Age under the title “New rules give Village a boost” and was written by Danny John.
Village Roadshow (ASX: VRL) is an interesting company.
It produces movies such as Babel, Casino Royale, Night at the Museum and Happy Feet.
It has its own studios in the Gold Coast occupying 13 hectares of land being one of the largest in the Southern Hemisphere.
Village Roadshow operates its own cinema chain and music, Video/DVD division.
It also owns theme parks in Queensland such as Movie World, Sea World, Wet’n’Wild and Australian Outback.
It owns a share of the Austereo Network radio business.
Village Roadshow financial figures are curious. Its EPS for the last six years show no trend and oscillate around the average of 20.28 cents.
Village’s Net Profit also goes erratically and show a loss every few years of so, having the most recent ones been in 2003 and 2006.
Village’s Return on Equity is low, averaging 9.8 per cent.
VRL’s Revenues, though, are quite good and steady and went from $682.4 million in 2001 to $1,525.6 million in 2006. What is keeping Village Roadshow from converting revenue into profit?
VRL’s Long Term Debt is a whopping $948.5 million representing 96 per cent of Capital. Interest is $84.4 million.
VRL’s price is $3.12 and a quick look into a ten year price chart shows it falling between 1997 and 2003, from almost $5.00 to $1.00, and then recouping.
Its Price to prospective 2007 Earnings of 20.6 cents is 15 times.
End
The news today, 4 January 2007, is that “Village Roadshow, the film production company and theme park operator, has upgraded its profit forecast for the coming year by more than a third after having to change its accounting policies to capture fully the hedging costs on the loans it takes out to make films.”
“The company, which made the high-grossing Matrix trilogy and has another smash hit with the penguin singing and dancing film Happy Feet released on Boxing Day, now expects to make a net profit after tax of $36 million this year compared with the previous forecast of $25-$27 million.”
“The new forecast, contained in a statement to the Australian Stock Exchange yesterday, comes after six months of negotiations with Village’s auditors and accounting standards regulators over new international accountancy rules introduced in the past two years.”
This news was published in the online version of The Age under the title “New rules give Village a boost” and was written by Danny John.
Village Roadshow (ASX: VRL) is an interesting company.
It produces movies such as Babel, Casino Royale, Night at the Museum and Happy Feet.
It has its own studios in the Gold Coast occupying 13 hectares of land being one of the largest in the Southern Hemisphere.
Village Roadshow operates its own cinema chain and music, Video/DVD division.
It also owns theme parks in Queensland such as Movie World, Sea World, Wet’n’Wild and Australian Outback.
It owns a share of the Austereo Network radio business.
Village Roadshow financial figures are curious. Its EPS for the last six years show no trend and oscillate around the average of 20.28 cents.
Village’s Net Profit also goes erratically and show a loss every few years of so, having the most recent ones been in 2003 and 2006.
Village’s Return on Equity is low, averaging 9.8 per cent.
VRL’s Revenues, though, are quite good and steady and went from $682.4 million in 2001 to $1,525.6 million in 2006. What is keeping Village Roadshow from converting revenue into profit?
VRL’s Long Term Debt is a whopping $948.5 million representing 96 per cent of Capital. Interest is $84.4 million.
VRL’s price is $3.12 and a quick look into a ten year price chart shows it falling between 1997 and 2003, from almost $5.00 to $1.00, and then recouping.
Its Price to prospective 2007 Earnings of 20.6 cents is 15 times.
End
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