Eros makes and distributes Indian language films, but its success has never been fully acknowledged by UK investors, which prompted the company to attempt to transfer its listing from London to the New York Stock Exchange last month. That move was understandably put on hold due to volatile equity markets conditions, but it has also meant investors who bought in ahead of the planned US listing have been heading for the exit.
In fact, despite reporting a 17 per cent rise in underlying operating profits to $65.8m, the shares fell a further 7 per cent to a 12-month low. True, profits missed Investec's profit forecast of $75m, partly as gross margins fell on higher distribution costs – advertising costs increased by $5.5m – but also because revenues missed City targets, too. However, it's worth noting that Eros, which reports in US dollars, was faced with a 14 per cent depreciation in the Indian rupee in the 12-month period, and the rescheduling of one of its six major film releases and $2.3m of costs associated with new hires contributed, too. A further $6.8m expense relating to interest hedging charges and a net foreign exchange loss dented the reported numbers in our table below.
Investec's forecasts are under review, but rough estimates suggest a downgrading in adjusted EPS from 47.9¢ to 40¢ (2012: 39.4¢).
| EROS INTERNATIONAL (EROS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 182p | MARKET VALUE: | £226m | |
| TOUCH: | 180-184p | 12-MONTH HIGH: | 310p | LOW: 172p |
| DIVIDEND YIELD: | nil | PE RATIO: | 9 | |
| NET ASSET VALUE: | 335¢* | NET DEBT: | 23% | |
| Year to 31 Mar | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (c) | Dividend per share (c) |
|---|---|---|---|---|
| 2008 | 113 | 45.5 | 33.5 | nil |
| 2009 | 157 | 48.4 | 35.1 | nil |
| 2010 | 150 | 49.5 | 36.5 | nil |
| 2011 | 165 | 55.8 | 38.6 | nil |
| 2012 | 206 | 53.6 | 31.9 | nil |
| % change | +25 | -4 | -17 | - |
*Includes intangible assets of $491m, or 395¢ a share £1=$1.54 | ||||
