With limited time to act on the Rights Issue and no one to...

With limited time to act on the Rights Issue and no one to bounce ideas or observations off about DES I will, at the risk of airing my ignorance, post a fair wack of my time, condensed into a couple of hopefully discernable paragraphs for discussion on Hot copper. Please pick holes and question it. Remembering it’s a discussion forum and its imperative to do your own research. I have no formal qualifications and make no recommendations. I’ll break it up into a couple of threads starting with DESTRA ENTERTAINMENT and as that goes stale I throw in DESTRA MEDIA.

Heres my take-

Destra Entertainments main source of revenue is hard copy DVD’s and CD’s. Destra’s HY reported “Strong DVD format sales performances across sports, children’s and feature film genres” I think this will be their bread and butter for sometime yet. A HC poster, “Scooters” convinced me to do more research on this side of DESTRA, I enjoyed it. I now believe the move to “full rights” initiated by MPH in 2006 is a positive one capable of providing long term revenue streams, including, from formats yet to be utilised. Magna Pacific now owns the full rights to distribute twenty-three feature films for theatrical release in Australia and New Zealand and holds a shared interest in an additional two films.Distributors tend to do well in the movie industry. It is also a buyers market for distributors.

DESTRA Entertainment will be the biggest beneficiary of the consolidation process. The focus on increased margins currently (12.8%) should produce rewards. Destra flagged some revenue degradation as it drops low margin lines, however I still believe there will be continued growth. The multi million dollar deal with Fremantle Media is expected to start producing income from September 08. A1 GP and UEFA Euro 2008 will also have some impact.

I know there is a never ending list of ifs, buts and maybes but I had to start somewhere so I’ve modelled using the DEC 07 financials as a base. And tried to project what it may look like in DEC 08.
I've increased revenues by 5% and margin by 10 % ie 59m x 14% = 8.26 million ebita.I think this is conservative (Too?)and reflects caution as I await clarity on the “Full Rights” impact on the financials. The Consolidated Revenue statement had scope for substantial savings, so I thought the margin growth a reasonable assumption as well. I’ll revisit this regularly, particularly after the full year.
Again this is my view only and welcome comments good and bad for anyone interested in DES.

Regards


Oscar

Now back to the Day Job