Mondo’s FY16 results, which were delivered ahead of guidance and show a significant increase in sales from the strategically important Asian market, are a confident step towards delivering its ambitious five-year growth plan. The shares, at the bottom of peers on 2017e P/E, have yet to catch up.
An ambitious growth strategy
Mondo TV (MI:MTV) has a strong position in the market for the production, acquisition and exploitation of the rights to children’s animated film and television content. In October 2016, it unveiled its revised five-year plan, with the ambition to almost triple revenues (+189%), EBITDA (+229%) and net income (186%) by 2021. Investment will focus on higher-growth geographies (China and the Gulf), formats (notably the teen markets), as well as the higher-margin licensing and merchandising activities.
Funding available to execute plan
The funding has been put in place to finance the planned increase in investment. During 2016 Mondo placed €5.3m of equity with GEM and in July 2016, it reached an agreement with Atlas for the issue of up to €15m of convertible bonds. €4.5m were issued during FY16 and year-end debt was €0.7m net of €1.8m in cash. A further €7.5m of bonds have been issued since the year-end, leaving €3m available and, if required (not currently expected), the group has access to the remaining €30m share subscription facility with GEM.
FY16 results a confident step forward
FY16 results were ahead of guidance given last October. A continuation of the strong performance delivered at the interim, FY16 revenues increased 55% to €29.2m (guidance €27.3m), EBITDA of €19.4m was a 109% increase on FY15 (guidance €18.3m) and net profit of €8.6m was ahead of guidance (€8m). In line with the group’s strategy, the mix of sales shifted towards the strategically important Asian market, which almost doubled its contribution to revenues.
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