Tips Music (TIPSMUSIC) Q4 10/11 earnings summary

Executive summary

• FY2010-11 performance weakened after the film Prince underperformed; reported income was Rs. 67.24 crore vs. Rs. 85.06 crore, and PAT was Rs. 2.98 crore vs. Rs. 8.48 crore.

• A 25,000-plus song archive and film library of 27 releases supported recurring royalty income, while planned film releases aimed to restore growth.

Financial highlights

• Total income fell to Rs. 67.24 crore from Rs. 85.06 crore; turnover was Rs. 66.60 crore, including Rs. 36.73 crore of royalty receipts and Rs. 29.06 crore of film production and distribution receipts.

• EBITDA was Rs. 12.12 crore vs. Rs. 15.50 crore; PBT before prior-period expenses was Rs. 4.07 crore vs. Rs. 9.81 crore; PAT was Rs. 2.98 crore vs. Rs. 8.48 crore.

• EPS was Rs. 1.81 vs. Rs. 4.90; operating cash flow was Rs. 12.63 crore vs. Rs. 9.01 crore.

• Revenue fell from Rs. 85 crore to Rs. 67 crore, primarily reflecting the disappointing performance of Prince.

Outlook and guidance

• Planned FY2011-12 releases included Race 2, a mid-budget Shahid Kapoor film and Punjabi film Jihne Mera Dil Luteya; a studio tie-up for investment, funding and distribution was also planned.

• Around five films were planned by March 2013, with revenue targeted to rise from Rs. 67 crore in FY2010-11 to Rs. 200 crore by 2013.

• Film-library royalties and the 25-year music repository were expected to support continuing annuity revenues.