Focus on documentaries pushes Zinc Media back to profit

Alys Key
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Brook Lapping, a unit owned by Zinc, made Inside Obama's White House last year (Source: Zinc Media)

Aim-listed Zinc Media has set its sights on acquisitions after the group swung to a profit for the first time since 2010 on the back of its renewed focus on TV production.

The group, which owns documentary-makers, including the company behind last year's Inside Obama's White House, exited most of its loss-making publishing business this year.

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The figures

Although revenue fell 12.6 per cent to £19.8m in the year to 30 June, underlying earnings came in at £440,000, compared to a loss of £430,000 last year.

The company undertook fundraising and debt restructuring throughout the year worth £1.27m.

Since refocusing on TV, the company has begun working with a raft of new clients, and its order book is 76 per cent higher as of June this year than it was in 2016.

Shares were up 2.7 per cent today, trading at 95p.

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Why it's interesting

The company was previously known as Ten Alps, but renamed this year to be called Zinc Media as it signalled a new strategy.

The main focus of Zinc is now on its five core TV brands, having exited most of its loss-making publishing business. It said today that it has retained a single profitable publishing business, based in Macclesfield.

Analysts at N+1 Singer said underlying earnings were above expectations, and were bullish on its prospects for the coming year.

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"The turnaround of Zinc is gathering momentum and we expect another leap forward in profitability this year," they said. "TV production assets are well sought-after and are scarce. Zinc presents a good opportunity to gain exposure to an undervalued stock in this attractive segment."

While the group has traditionally made programmes mostly for the BBC, it has this year made TV for Channel 4, Channel 5, ITV, Sky and international networks such as HBO and National Geographic.

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What Zinc Media said

Speaking to City A.M. this morning, Zinc's chief financial officer David Galan said the group was now in the market to add more TV production companies to its portfolio.

"We see ourselves as a consolidator," he said. "We're looking for UK independent companies within factual programming, but we'd also look at companies with specialisms in genres we don't do.

"There's also a big push by broadcasters to spend outside of London so we are looking for regional companies."

He added that the changing media landscape heralded by Rupert Murdoch's proposed takeover of Sky was unlikely to affect the company's prospects because "with Netflix and Amazon now on the scene, the budgets for content are just getting much, much higher."

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