Update for Calendar Year 2011
The Board of Pan Asian media & entertainment company, RGM Media Ltd (ASX:RGM) is pleased to provide an update for calendar year 2011.
Since its reverse listing into Biosignal Limited in August 2010, RGM has appointed Greg Coote as Chairman and entered a film financing joint venture with News Corporation’s Fox International Pictures (FIP). These initiatives, along with a number of other initiatives in the Talent Management business and Executive Production business (for film and television) has placed RGM in a strong financial position, which will be borne out in RGM’s financial performance during this calendar year.
Chief Executive and Executive Director, Mr Devesh Chetty said, “I am very pleased to be able to provide this update to the market, with the knowledge that we believe we will be able to improve on this solid base in future years”.
Mr Greg Coote, Non-Executive Chairman of RGM, commented, “I am genuinely excited about how we can leverage RGM in the Asian market, particularly with deals like we have secured with FIP, and I think the platform that Devesh and team have created will place us in a strong position going forward ”.
Historical Performance for Calendar Year 2010
2010 saw RGM’s later summer reverse listing into Biosignal Limited. The business units involved were the Artist Management business and the Production Business, which included the company management. The Artist Management business has been developed since 1982, and its revenue for the calendar year 2010 was $2,755,543. The focus of the senior management team and the Production Business for 2010 was the completion of the reverse listing and the development and positioning of individual projects and agreements including with Fox International Productions, Mark Burnett International Inc. and Hemisphere Media Capital to deliver earnings for 2011.
Update for Calendar Year 2011
We anticipate that the revenue for the Artist Management group’s existing business will see growth in the range of 5 to 10% of the 2010 revenues, which is consistent with historical growth levels.
Building on the foundation set in 2010 we are positioned to grow our Production unit. This growth is underpinned in 2011 by:
- a suite of 2 reality television formats developed for Asian markets (including The Apprentice and People’s Choice Awards) and 2 scripted series and telemovies for global distribution. In total, we anticipate that we will have a minimum of 4 projects in production by December 2011 ; and
- a minimum of four film projects, also anticipated to be in production by December 2011.
For film, expected production services income per film is typically in the range of US$0.8 to US$1.2 million, as detailed in our prospectus dated 21st April 2010. For television, the production services income threshold for RGM to greenlight a reality TV program is $US0.4 – 0.6m, and US$0.8 – 1.2 million for scripted series. The production services income is booked as revenue at the point the project goes into production.
Our operating cost base for the year ended December 2011 is expected to be in the range of US$5.8 million to $6.0 million. This excludes depreciation and amortisation (circa $120,000 to $140,000) based on the asset base as reported in our last financial statement, reported to the market on 31st March 2011. No material interest expense is expected to be incurred in this calendar year, notably with the US$15.77m in Convertible Notes having a zero coupon.
With the film and television revenues predominantly being generated in Singapore we anticipate that the underlying tax rate for RGM group will be circa 20%.
It should be noted that this excludes any revenues, ammortisation or earnings that RGM may generate from the Hemisphere Media Capital or the Fox International Productions film financing joint venture deals that were announced to the market on 2nd November 2010 and 17th January 2011 respectively. RGM will provide further information to the market as product is brought to market over the coming months.
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