Share Name Share Symbol Market Type Share ISIN Share Description
Eros International LSE:EROS London Ordinary Share GB00B13JS954 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 235.50p 0.00p 0.00p - - - 0.00 05:00:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 141.7 30.0 15.1 13.1 308.01

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Date Time Title Posts
15/11/201609:09Eros International (Bollywood Movies)1,062.00
12/8/201615:17Eros - oh kidaaaaaa...upar upar chale ga!9,231.00
15/1/201414:45EROS 1.00
26/10/201112:34EROS - Slumdog Millionaires Should Be BUYING this Bollywood play5.00
07/5/200913:32EROS International PLC - A recovery story in making2.00

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DateSubject
15/11/2016
09:01
rivaldo: Hmmm...looks like I made the right decision in selling! The Q2 group results were extremely poor, with a net loss overall, leading to a 15% share price fall yesterday: Http://finance.yahoo.com/news/eros-international-plc-reports-second-121700957.html EROS will remain on my watchlist. With a few successful films, and if EROSNOW starts to provide good revenues, there's still lots of upside, but in the meantime the share price may continue to drift/fall for a period whilst uncertainty prevails.
10/11/2016
14:49
rivaldo: I sold on the bell at the open in the USA today, as: - the share price was at recent highs - the £/$ was at an exceptionally favourable rate, which may (or may not) continue - EROS' Indian subsidiary has just announced their Q2 results. These are not very good relative to last year, and in particular net debt has doubled since the year end. The main companies' Q2 result may well be different/better, but I don't want to take the chance, especially as the market wouldn't take kindly to a poor cash flow performance imo. Good luck all - I'll be back in if it drops significantly and the latest film releases perform extremely well with cash flow improving.
07/6/2016
14:02
rivaldo: Hi foot in mouth, I'm still in and never been out :o)) I still believe EROS has a long way to go yet, and the potential for EROSNOW is huge but is backed up by the solidly profitable and growing core revenues. As evidenced by.... EROS' comedy Housefull 3 is an absolutely massive hit, earning 100+ crore in its first weekend alone - hence the current rise in EROS' share price: Http://www.indiainfoline.com/article/general-market-equity/housefull-3-grosses-100cr-worldwide-in-its-opening-weekend-eros-international-up-4-116060600207_1.html
26/10/2015
14:01
foot in mouth: This is reassuring: hxxp://profit.ndtv.com/news/market/article-why-eros-international-media-shares-crashed-20-1236365 Eros International Media shares fell as much as 20 per cent on Monday following a crash in shares of its New York Stock Exchange-listed holding company Eros International Plc, which distributes Indian-made films. Eros International Plc shares came under pressure (down 45 per cent to $14.65 in one week) after Wells Fargo & Co. analysts raised questions about the company's growing business in the United Arab Emirates. The questions surfaced following a Twitter post claiming the company's UAE sales aren't legitimate, Bloomberg said in a report. Eros Plc's revenue from UAE increased to 36 per cent of consolidated in FY15 from an earlier average annual run rate of 10-12 per cent which increased receivables days sharply to 269 from 161 in FY14, according to PhillipCapital. Eros Media issued a strongly-worded statement to the Bombay Stock Exchange, saying share price volatility in New York and India are based on "speculative" media reports. "We would like to reassure our shareholders that there has been no material change to the previously announced strong fundamentals of the company," Eros Media added. PhillipCapital said the concerns raised by Wells Fargo analysts are not new and the management has already explained the cause. "The management's explanation was that one of Eros Plc's subsidiaries is in Dubai and that Eros Plc records revenue there for tax purposes (many companies have tax homes in countries other than their corporate home)...," said PhillipCapital in a note. The brokerage said recent weakness in Eros International Media shares provides an attractive entry point for investors. Over the last month, Eros International Media stock price has underperformed broader indices by nearly 20 per cent, despite strong box-office performance (Bajrangi Bhaijaan, Srimanthudu, and Welcome Back), PhillipCapital noted. "Eros Media International is also the only listed player in the Indian media space that operates on a vertically-integrated studio model - controlling content, distribution, and exploitation across all formats globally," said PhillipCapital. It maintained its "buy" rating on the stock with a target price of Rs 660. Eros International Media shares closed 19 per cent lower at Rs 354.40, underperforming the broader markets, which closed 0.40 per cent down.
26/10/2015
13:32
eurofox: Eros International Issues Statement Regarding Recent Stock Price Volatiility Date : 26/10/2015 @ 13:19 Source : Business Wire Stock : Eros International Plc A Ordinary Shares (EROS) Quote : 14.65 0.0 (0.00%) @ 12:47 EROS INTERNATIONAL PLC share price Chart Financials Trades Level2 Eros International Issues Statement Regarding Recent Stock Price Volatiility Today : Monday 26 October 2015 Click Here for more EROS INTERNATIONAL PLC Charts. Eros International Plc (NYSE: EROS) (“Eros”), a leading global company in the Indian film entertainment industry, today issued the following statement regarding the recent stock price volatility: “Given the recent price volatility in our stock, we would like to confirm that nothing has materially changed to the strong business fundamentals of the Company communicated previously. We have significantly grown the business over the last decade and continue to be market leaders in the Indian film industry with a dominant market share of the global Indian box office. We distribute our films in over 50 different countries dubbed and subtitled in over 25 different languages. Our library of over 3,000 films continues to be a unique competitive advantage which we monetize in conjunction with our new release slate of 65-70 films comprising of Hindi and regional languages each year, across theatrical, television and digital and ancillary distribution platforms worldwide, which constitute our diversified revenue streams. In addition, our game-changing OTT platform ErosNow, is progressing very well and we expect to launch a host of new product features, pricing plans and originals in the forthcoming quarters to build on that momentum. Our base of 30 million registered users that we announced as of September 30, 2015 are a combination of web, WAP and APP customers which we acquired organically as well as with synergies from our Techzone acquisition. In the next phase, our goal is to continue to try to increase our user base and also systematically convert a portion of them to premium paying subscribers over time within India and internationally. The positive growth and momentum in our Q1 results continued into Q2 with a further string of hits under our belt. We will be announcing what we expect to be strong second quarter results in the first half of November (specific date to follow), which will allow us to demonstrate growth in revenues, profitability and cash flow from operations. As previously announced, we expect that the Company will be free cash flow positive by the end of fiscal 2016. Our balance sheet continues to remain strong with a net debt to EBITDA ratio of under 1.58 as of March 31, 2015. We would like to thank all our long term shareholders who have supported us over the last several years as well as through these last few days, and also new shareholders who have come in as investors with this opportunity. We remain focused on achieving our business goals and objectives to take advantage and build on our leadership position within the rapidly growing Indian media and entertainment sector and remain committed to creating and enhancing long-term shareholder value.” About Eros International Plc Eros International Plc (NYSE: EROS) is a leading global company in the Indian film entertainment industry that acquires, co-produces and distributes Indian films across all available formats such as cinema, television and digital new media. Eros International Plc became the first Indian media company to list on the New York Stock Exchange. Eros International has experience of over three decades in establishing a global platform for Indian cinema. The Company has an extensive and growing movie library comprising of over 3,000 films, which include Hindi, Tamil, and other regional language films for home entertainment distribution. The Company also owns the rapidly growing OTT platform ErosNow. For further information please visit: www.erosplc.com View source version on businesswire.com: hxxp://www.businesswire.com/news/home/20151026005794/en/ Eros International Plc Vanisha Dhimer, +44 207 258 9894 Investor Relations Manager vanisha.dhimer@erosintl.com or Sloane & Company Erica Bartsch, 212-446-1875 ebartsch@sloanepr.com
23/10/2015
21:24
smurfy2001: A twitter user has caused the share price collapse? Eros Tanks as Wells Fargo Analyst Questions Company Metrics Eros International Plc fell for a fifth straight day after analysts at Wells Fargo & Co. said they weren’t satisfied by answers the Bollywood film producer and distributor gave investors on a call held Friday to combat accusations of fraud posted on Twitter. Eros slid 17 percent to $14.65 at the close in New York, bringing its loss for the week to 45 percent. Wells Fargo analyst Eric Katz cut his rating on the shares to market perform, saying he wasn’t comfortable with explanations about the company’s growing business in the United Arab Emirates. Eros, based in Secaucus, New Jersey, distributes Indian-made films. “We still don’t know the largest content buyers driving this increase, and we aren’t fully comfortable with the fact nearly half of the revenue originates outside of India,” Katz wrote in a note. Eros management spoke with analysts on Friday in an attempt to assuage fears that a spike in revenue booked in the UAE was fraudulent. A Twitter user called Market Farce, whose profile reads, “Focused on uncovering farcical, fraudulent and dishonest financial market activity,” has claimed UAE sales aren’t legitimate and has questioned the company’s ErosNow registered users. Eros wouldn’t disclose the counterparties driving the UAE sales, citing contract confidentiality. “We are not going to comment on an unknown person who hides behind an alias on social media to make ridiculous and outrageous accusations,” said Whit Clay, an outside spokesman for Eros. The stock has been sinking since mid-October, when Market Farce, who declined to reveal his identity when reached by Bloomberg, began Tweeting about Eros. Eros reported fiscal 2015 UAE revenue of $103.8 million, up from $45.6 million in 2014 and $14.5 million in 2013. The sales are based on a customer’s domiciled location, according to a company filing. Market Farce claimed on Twitter the company boosted UAE sales in quarters when “their movies don’t work.” Eros produces, acquires and distributes Indian language films and has a market capitalization of $843 million. The company has 30.5 million registered users for Eros Now, its Netflix Inc.-like product that streams Bollywood movies and music, according to a person familiar with the matter. The company hasn’t disclosed how may of these users pay for the service or how many are monthly active users. “We’re still feeling uncertain about the ErosNow user count,” Katz wrote. “Public websites that track app downloads (i.e. App Annie) show relatively low rankings for ErosNow vs. other Indian streaming services with lower user counts. We can’t reconcile the disparity and it’s a red flag for investors.” Wells Fargo dropped its price target on Eros to between $20 and $22 per share from $48 to $50. Shares have fallen more than 54 percent since Oct. 12. Analyst Tim Nollen at Macquarie Research said the shares were oversold for “no good reason.” In a note, Nollen said he spoke with Eros executives “who say nothing has changed and nothing is amiss.” The company has been in talks with Singapore-based Fullerton Fund Management Co. on a deal that would value Eros Now at as much as $800 million, people familiar with the matter said in July. Those talks are still ongoing and a deal could be announced this month, one of the people said. http://www.bloomberg.com/news/articles/2015-10-23/eros-tanks-as-wells-fargo-analyst-questions-company-s-financials
04/8/2015
20:38
hyperboreus: Interesting read for anyone contemplating selling, holding or even maybe adding as Eros share price surge abates: Http://seekingalpha.com/article/3389765-eros-international-100-percent-returns-delivered-more-to-come
28/9/2014
06:58
rivaldo: EROS's retail bond has been tipped in today's Mail on Sunday - and they're pretty effusive about the shares! Nice to see a US-listed share get such attention over here... Http://www.thisismoney.co.uk/money/investing/article-2772039/MIDAS-SHARE-TIPS-Bond-issue-offers-Bolly-good-income.html "MIDAS SHARE TIPS: Bond issue by film maker Eros International offers a Bolly good income By Joanne Hart, Financial Mail on Sunday Published: 22:07, 27 September 2014 | Updated: 22:33, 27 September 2014 Eros International is the biggest film company in India. Every year, it makes 60 to 70 movies and its library of old titles runs to more than 2,000 Bollywood classics. Initially listed on AIM, the group transferred to the New York Stock Exchange last November, when chief executive Jyoti Deshpande took the view that American investors were more appreciative of film companies than British ones. So it has proved. The shares have risen almost 30 per cent since. Now Eros is returning to these shores with a £100million retail bond to be listed on the London Stock Exchange. The bonds will have a coupon – or annual interest rate – of 6.5 per cent and will mature after seven years. Investors will receive interest twice a year and the minimum investment will be £2,000. In India, films are a national obsession. Cinemas are packed and new releases are eagerly awaited. However, the country has only ten cinema screens per million people compared with 120 per million in the US. As the Indian population becomes wealthier, cinema groups are trying to bridge the gap, building multiplex sites, where ticket prices are higher and more films can be shown at any one time. Pay TV is another outlet for movies. There are 140million subscribers now, but this is expected to reach 200 million in five years’ time. Increasingly, too, Indians are turning to their mobile phones to watch films. There are 850million mobile phone subscriptions in India, so the potential for Eros is huge. It has the largest Indian film library in the world and to provide online access to the movies, Eros recently launched Eros Now, described as the Netflix of India. Interest in Bollywood is extending beyond India. For example, a recent Eros production, English Vinglish, has been internationally acclaimed and became a box-office hit in Japan. Eros is ideally positioned to benefit from film trends both at home and abroad. Its share price was volatile on AIM, but the group has done well in New York and is now valued at $840million (£515million). The coupon is reasonably generous, too. Eros is the first media company to access the Stock Exchange retail bond market and probably the most exotic. Some investors may be unnerved by the fact that the business is based in India, involved in the often volatile world of film-making, listed in America and raising money here. However, the company is growing fast and bonds listed on the Stock Exchange can be traded like shares. Midas recommended Eros shares in June 2011 at 2031⁄2p and they delisted last year at 2351⁄2p. Investors who kept with the stock have done well. The group gave them one new share for every three held, equivalent to 7061⁄2p. Today the stock is trading at $15.06, equivalent to 927p. Midas verdict: Holding US shares is a little more complicated than owning UK ones, but investors can still trade the shares here, using brokers at Barclays or Hargreaves Lansdown. Those who are happy holding US shares should stick with the stock. Those who are not could sell now, having made a decent profit. The bonds offer income-seekers a decent annual interest rate and the price should rise after launch. Buy."
25/11/2013
14:18
foot in mouth: As posted on III today by Gwynfryn1: Simon Thompsons' opinion post raises a lot of questions about the company's incredibly self serving management and total disregard of shareholders' interests: I have to admit that I was shocked by how the IPO of Bollywood film producer EROS (NYSE: EROS) on the New York Stock Exchange panned out. To recap, it is a company I have followed for sometime and a month ago advised buying the Aim-traded shares at 250p ahead of the IPO ('Time for some price action', 22 Oct 2013). Moreover, having assessed the pricing of the offer I remained positive in the run up to the IPO when the price had subsequently risen to 300p ('Get ready for some price action', 6 Nov 2013). I had good reason to be because as part of the IPO Eros planned to issue 12.5m 'A' ordinary shares at a price between $15 (£9.31) and $17 per share. Of these shares, 7.8m were to be issued by the company and a further 4.68m by selling shareholders. The initial price range in New York reflected a proposed one-for-three consolidation of the existing Aim-traded ordinary shares in connection with the proposed listing. On this basis, post the listing there would be 51.4m shares in issue, giving Eros a market value of between $771m to $871m. This implied a price range of 931p to 1,056p per 'A' ordinary share listed on the NYSE, which equated to a price range of between 310p and 352p per Eros ordinary share listed on Aim prior to the share consolidation. So the investment risk definitely looked favourable as there was potentially 17 per cent upside by buying the ordinary shares on Aim in early November and selling them in New York, assuming of course the investment bankers could get the IPO away. However, clearly demand for the shares was far more subdued than either the directors had anticipated or, for that matter, the investment bankers leading the IPO had guided the board to expect. In fact, the IPO price was cut twice within a week in the second week of November, initially to $12 a share and then again to $11 by the time the shares were listed on the NYSE 11 days ago. That's where Eros's shares are trading right now. This is equivalent to 226p per old Aim-traded share. Moreover, Eros only sold 5m new shares, raising $55m and giving the company a market value of $535m. That valuation is miles away from the $871m upper range of the IPO the company had guided investors to expect. New York IPO debacle The obvious and yet to be answered question is how could the board of Eros's directors and their bankers have gauged investor demand so poorly? It's not as if market conditions are harsh. In fact, the S&P 500 is trading at a record high. The other point to note is that after factoring in the IPO proceeds, and costs of the IPO, by my calculations Eros has pro-forma net debt of between $100m to $110m, so has balance sheet gearing of only 20 per cent. In other words, the board didn't have any pressing financial reason to go ahead with an IPO that was priced at a level to the detriment of minority holders of the Aim-traded shares. Furthermore, at the current price the shares are rated on 10 times net earnings for the financial year to March 2014. That's hardly an exacting valuation compared with US content providers and the company is even more lowly rated than its peers on an enterprise value to cash profit multiple. This then begs the question why wasn't the IPO aborted and restarted when institutional demand warranted a listing at a higher price? The obvious, albeit cynical, answer lies in the small print. That's because in connection with the proposed listing on the NYSE, Jyoti Deshpande, chief executive and managing director, entered into a new employment agreement with Eros pursuant to which she is entitled to receive a 4 per cent stake in the company's ordinary share capital on or before 20 September 2013, of which an equal percentage of shares has been locked up for one, two and three years. In addition, Ms Deshpande is entitled to receive 'A' ordinary shares of Eros valued at $2m within seven days of the shares being admitted to trading on the NYSE. In other words, there was every incentive for the company's boss to get the IPO away even if the price was slashed from $15-$17 to a miserly $11 a share. Ultimately, we have little choice but to await for Eros to announce its third-quarter figures to the end of December, and the final results to the end of March 2014, to provide the much-needed catalyst to get the share price back to where it was trading at before the NYSE debacle of an IPO took place. I still believe that US investors will warm to the company and its game-changing joint venture with US premium network operator HBO, which significantly increases the appeal of the company's shares to US fund managers. This landmark agreement not only brings the best of Hollywood and Bollywood together, but means that Eros is ideally placed to tap into the rapid growth forecast in the digital pay-TV (direct-to-home satellite and cable) markets in India. Driven by the growth in the middle classes, who spend far more on entertainment, analysts at KPMG predict digital pay-TV audiences in India will rocket from around 65m this year to 161m by 2016. Analysts predict that net profits from the venture could ramp up from $3m on a net subscriber base of 800,000 in the financial year to March 2014, rising to $16.5m the year after (net subscriber base of 2.2m). I will be closely looking for updated guidance on this at the time of the full-year results. If the joint venture is as successful as industry experts believe, then this should be the catalyst to drive the share price higher. In the circumstances, I would hold onto your Eros shares and patiently wait for the next quarterly earnings announcements from the company. It's worth noting that with only 5m shares issued as part of the IPO, and a lower than normal free float, then any good news is likely to provide an accentuated upwards move in the company's share price. And since Eros is up against some easy comparatives from last year, then the odds still favour a pretty decent uplift in the company's third- and fourth-quarter earnings.
05/2/2012
09:11
glasshalfull: Eros I believe the company displays a number of attributes that will eventually see it multi-bag from the current share price. An entertainment play on emerging markets, they are the market leader in their industry by some distance and on a derisory single digit PER despite forecasts indicating that they will grow earnings by 30%-40% in the current year and mid teens % in 2013. I also expect the company to announce a dual listing or Full London listing in 2012 and this coupled with current low valuation and growth opportunies suggests that there's a good chance of a positive re-rating at some stage this year...or so I hope ;-) Pro's and Con's at the foot of the post. What do they do? In essence Eros International ARE the "Kings" of Indian cinema or Bollywood which is undergoing phenomenal growth. The company was established in 1977, so they have something of a track record and have maintained market leadership as they create a global platform for growth. During the last few years the Indian film market became professionalised. The company is the market leader, competing with companies such as UTV and Reliance. Eros has implemented its own process of pre-selling the movie to distributors and pay TV networks around a year in advance of release in order to cover the production costs. They have increased the scale of the movies they co-produce and the creation of these blockbusters assists to bundle older films in pay TV syndication deals. A quick check reveals that Eros were covered as an entry in last years competition and the recipient of a write-up by warren12 http://boards.fool.co.uk/eros-international-nfsc-2011-12146782.aspx?sort=whole I therefore didn't plan to go into as great detail as my recent post on DOTD who are new to the Pub, but in the end up I couldn't help myself. It is interesting to note that the starting Eros share price in last years competion was 240p, so they have simply treaded water in share price terms over the last year while earnings grew by 6% and as I mentioned above, forecast to grow 40% in the current year. As I'll explain (see Background), the 34 year old business has developed an enviable film library and have rights to over 2,100 films and I found it interesting to note that a figure mooted in the valuation of their IP was a figure well in excess of $1.5 billion when discussed at a recent analysts visit to the company's Indian businesses. They have a multi-platform approach to exploit and develop their catalogue of films via Theatre, TV and Digital/ Home Entertainment and have de-risked their business model by covering much of the production costs through licensing and pre-sale agreements well before a films release date. Interested? Read on. Market Data Eros International EPIC: EROS (AIM listed) Website: http://www.erosplc.com/ Price 230p Shares in issue 118m Market cap £271m AIM Listed 52-week range 190p-273p Financials Quick run through Full year & Interim results 2011 Preliminary Results – 31st March 2011 http://www.investegate.co.uk/Article.aspx?id=201105310701345273H Financial Highlights • Group turnover up 9.9% to US$164.6 million (2010: US$149.7 million) • Profit before tax up 12.6% to US$55.8 million (2010: US$49.5 million) • Basic EPS up 5.8% to 38.6cents (2010: 36.5 cents) • Net debt reduced by 30.2% to US$72.8 million(2010: US$104.3million) 2012 Interims Results – 30th September 2011 http://www.investegate.co.uk/Article.aspx?id=201111140700510145S Financial Highlights • Turnover up 35.3% to US$92.0 million (H1 2010: US$68.0 million) • Profit before tax up 3.9% to US$29.0 million (H1 2010: US$27.9 million) • Basic EPS down 7.5% to 18.64 cents (H1 2010: 20.16 cents)* *Basic EPS of 18.64 cents was 5.6% higher to H12010 EPS of 17.65 cents on a like for like basis, adjusting dilution of Indian subsidiary IPO. • Net debt at 30 September 2011 of US$114.2 million (31 March 2011: US$72.8million) Earnings(in cents) Just to provide a flavour of the earnings growth Eros have achieved over the last 5-years with a 30%-40% increase forecast in 2012. 2007 29.9c 2008 33.5c 2009 35.1c 2010 36.5c 2011 38.6c Forecasts 4 brokers covering the stock, all with BUY recommendations. Consensus forecasts: - 03/ 2012 PTP £51.43m EPS 33.38p PER 6.9 03/ 2013 PTP £58m EPS 37.79p PER 6 Amortilization of intangibles JT Cod, a much respected investor and poster over on ADVFN provided the following in-depth analysis in May 2010. It is worthwhile noting his comments in relation to the large scale amortilization of intangibles which have impacted the reported profitability of the company. http://uk.advfn.com/cmn/fbb/thread.php3?id=12508266&from=3677#firstpost As JT's post indicates Eros have basically ramped up the IP/ content for the business since 2007. To put this into context, Eros have invested c. US$603m (per 2011 Annual Report) in its library in the past five years, an incredible spend in content. They are now be reaching an inflection point where operating cashflow exceeds spend. Background – History & recent developments Established in 1977 the company has come a long way from financing 3 movies per year and this year content distribution/ production will total 120 movies. Quite a step-change. In 2006, Eros PLC, the holding company of the Eros Group, became the first Indian media company to obtain a listing on the Alternative Investment Market (AIM) of the London Stock Exchange and maintain a free float of 29% with 71% held by founding family interests (likely to be reduced to facilitate a move to the Official List or secondary listing). In order to take advantage of growth opportunities in a number of areas they successfully listed their Indian subsidiary on the Indian Market during October 2010. While doing so they sold a 21.88% stake in the Indian subsidiary, Eros International Media Ltd (EIML), with the offer 30x over subscribed. This raised $79m for use in expanding their content portfolio and development of further business streams. Business Streams Theatrical (2011: $56.9 million revenue) - 35% of revenue Eros released a total of 77 films in 2011. The Indian theatrical market has seen growth in both multiplex and single screen theatres with the number of digital screens overtaking physical print distribution thereby creating high margin revenue increases. The increased availability of screens has seen a trend towards wide releases and therefore a greater skew towards opening box office weekend (can be as high as 70%) as a percentage of total box office revenue across the run of a film. High-budget films are increasingly being released in digital screen format with the model in India a revenue share from multiplexes based on a pre-agreed share and minimum guarantee advances from single screen chains. Eros has released a number of blockbusters during Q3 2012 and I expect a trading update shortly that will showcase blockbuster revenue and profitability that will underline the prospect of significant earnings growth this year. Television (2011: $60.6 million revenue) – 37% of revenue License new and library content to all the major television networks in India such as Star, Sony, Zee and Colours as well as International networks Eros pre pre-sells a large proportion of their future slate to secure visibility of revenues that underwrite a significant part of IP/ content costs. Digital and Home Entertainment (2011: $47.1 million revenue) – 28% of revenue Digital media has been a strong area of growth as music monetisation grows through digital avenues such as online and mobile. For example, they have experienced over a billion video views on YouTube channels. Considerable investment has been made in digitalising existing content with an experienced industry figure brought in recently to exploit this area. There is possibility of an agreement with global online platform owners (such as Netflix or Lovefilm) or perhaps the launch of an Eros-branded online film rental business which could generate substantial subscription revenue streams or pay on demand. This arm also includes the EyeQube visual effects studio, established by Eros and operational since 2008. This provides work for Hollywood film studios as well as an in-house facility for Eros. They were involved recently in work for Disney (computer-generated effects for Tron Legacy). Given the low labour costs of their Indian domicile EyeQube can undercut visual effects production in other countries and still make mouth-watering margins of 100%. ...those all important Pro's & Con's Pros • Indian box office growing strongly - Driven by rising average ticket prices and a greater number of screens. • Geographic expansion – Number of recent announcements provide indication that Eros are leveraging their IP/ content and developing a number of other markets including the Far East and SE Asia. • Current movie slate delivering blockbusters - The key 2011 blockbuster movie releases have outperformed management expectations at the box office. This success drives TV syndication deals, with box-office success creating better pricing power for Eros. • Excellent visibility on future projects - The company has locked in all film projects for all of FY2012 and FY2013 and some of FY2014. The costs of these movies have been partially underwritten through TV syndication pre-sales, significantly reducing the risk of this pipeline. • TV syndication market remains buoyant - Intense competition for subscribers among the major four satellite platform owners has kept content prices high. • Developing digital strategy gaining traction - Eros has a number of existing digital initiatives, but these are being unified and enhanced by the company's new Head of Digital. There is possibility of an agreements with global online platform owners (such as Netflix or Lovefilm) or launch of an Eros-branded online film rental business which could generate subscription revenue streams, • India's Entertainment Tax under review - At present, large-scale entertainment shows (including cinema releases) in India are subject to a tax of 25-30%, included in the price of the ticket. This regime is currently under review, with a proposal to reduce this rate to around 14%, with any savings likely to be shared between the cinema owners and the production companies. Cons • Shareholding structure – Eros are controlled by the Lulla family who hold 70% of the equity. I would anticipate that this will reduce as the company are actively exploring a secondary of Full market listing and this will provide the opportunity to attract institutional investors and opportunity to sell down the family stake. • High level of content costs – (See amortilization in write up). Eros's model is built on continued investment in content to drive revenues ($140m annually forecast). Cash inflows from exploiting its content more than offsets this amount, so the company is cash-generative. • Content – Analysts have noted that Hindi content is relatively formulaic and there is always the danger of audience fatigue. • Domestic competition - Film production remains fragmented in India and Eros have something of a monopoly in this area as I've discussed. This opens up the possibility that an Indian Media conglomerate could make a strategic decision to enter the industry and result in an increase in competition. • Piracy - Likely to remain an issue and dictates aggressive first week film launch strategies and rapid follow through of DVD/CD products. • Release dates crowded - Increasing output and requirement for weekend/holiday windows (only 52 weeks/year). Eros is concentrating on fewer mid to larger Hindi releases. • Hollywood competition - Dubbed Hollywood films gaining acceptance. • Movie failure - Scale/portfolio approach helps but some decent hits are required each year to boost catalogue performance but Eros mitigates risk by aggressive first week openings and pre-sales which imply poor reviews hit figures less. • Distribution - The multiplex 'stand off' in 2009 hit audience sales and production. • Currency weakness – Two thirds of Eros sales are Indian Rupees (INR) and recent fall in INR/$ exchange rate (was recently as low as 53 INR/$ but subsequently has recovered) could impact $ quoted EPS figures. In the longer term more revenue will be in $ and therefore exchange rate will probably be neutral. (Note to self – removed the rose tinted specs with con's exceeding pro's, as acknowledged in my DOTD write up ;-) Conclusion Hopefully I've managed to provide a snapshot of the business which will assist future research. As highlighted in my opening gambit, Eros are forecast to grow earnings significantly this year and at the current price are on a PER below 7 which surely undervalues the business by some margin. Many investors will see an investment into the Entertainment Industry as high risk but as I've indicated in the write-up, Eros pre-sells a film through satellite pre-licensing, music, brand tie-ups, etc, and therefore in most cases they will have recovered the costs of c.50% of a movie before it's release. In this manner then even if a movie is a flop at the box office then Eros will have recouped the great majority of the costs and downside is limited to c.10-15% loss while the upside for a hit or blockbuster can range up to 100%. I also appreciate the AIM listing and family share ownership (c. 70%) will put many off but I reckon that this share ownership structure will change in 2012 as the company achieves a Full London listing or listing on a market that attributes a more realistic valuation on the company. A recent analyst visit to India provided mouth watering valuations on the company IP/ content with figures between $1.5 billion and $10 billion mentioned. When you consider that the company have invested $603m in content since 2006 and own the rights to over 2,100 films not to mention a considerable music catalogue, then a figure within this range is certainly not fanciful and leaves the current market cap of £271m well behind. I also expect their digital development to bear fruit and the company to either develop an in-house platform or go sign up with pre-existing model such as Netflix or Lovefilm to exploit their IP/ content with their expansion into other geographical territories also making a greater positive impact. The write-up is intended to stimulate research and no investment advice is intended. There is a thread running over at the other place. http://uk.advfn.com/cmn/fbb/thread.php3?id=12508266 Disclosure I have built a modest holding in EROS. Kind regards, GHF
Eros share price data is direct from the London Stock Exchange
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