Delayed projects explain the modest revenue growth in the period at
In fact, trading isn't really that bad at all. The group's cash profits, for instance, rose 19 per cent to $8.18m (£5.1m) in the period with the fall in pre-tax profits being largely down to a fairly hefty hike in the group's financing costs. Management says that the group boasts a dynamic but low-risk business model that develops classical iconic intellectual properties in a "new age of digital frontiers". And, at end-September, the order book stood at $155m (£98.28m) against $140m a year ago - encouragingly, the group has also signed a number of deals with new clients. What's more, the company can claim some revenue visibility over the coming five years - with more than 40 television series in development, plus three animated feature films. They are , , and the - and are due to be released from 2013 onwards.
|DQ ENTERTAINMENT (DQE)|
|ORD PRICE:||44p||MARKET VALUE:||£15.8m|
|TOUCH:||42-47p||12-MONTH HIGH:||147p||LOW: 44p|
|DIVIDEND YIELD:||nil||PE RATIO:||5|
|NET ASSET VALUE:||206¢*||NET DEBT:||18%|
|Half-year to 30 Sep||Turnover ($m)||Pre-tax profit ($m)||Earnings per share (¢)||Dividend per share (¢)|
Aim: media £ =$1.61 *Includes intangible assets of $63.7m, or 177¢ a share
There's no dividend and the shares have slumped 70 per cent in the past year. But, despite delayed first-half projects, the group's prospects look reasonable enough and a PE ratio of just five is hardly pricey. While a catalyst for a rerating may take a while to appear, the shares therefore look long-term good value.
Last IC view: Buy, 72p, 16 August 2011