Bollywood movie firm Eros sees profits fall as it plans London exit

BOLLYWOOD film company Eros International saw shares nosedive yesterday after it posted a fall in profits and said it expected to abandon London’s markets for New York by the end of the year.

The Indian firm said pre-tax profits fell by 15 per cent to $45.6m (£29.5m) even as revenues were up 4.3 per cent to $215m in the year to the end of March, as delays to blockbuster titles hit margins.

This sent the Aim-listed firm down 11.5 per cent to 203.8p, its lowest point this year, as it gears up for leaving the index to join the New York Stock Exchange.

Eros had announced its intention to move last year, but put the plan on hold due to market volatility. It believes that listing in the US will give it a higher valuation than in London.

“The board continues to believe that the listing will give the company a definite strategic advantage while giving access to additional equity capital and liquidity as well as trading with a more comparable peer group with broader analyst coverage,” chief executive Jyoti Deshpande said, adding that the listing should be completed by the end of the year, pending regulatory issues.

Steve Liechti, a media analyst at Investec, said the news that Eros was back on track for a New York float is “positive given higher US multiples”, and that the company is well positioned for growth.

Eros is aiming to take advantage of India’s rapidly expanding pay-TV market, and has teamed up with US cable operator HBO to improve its sales outside of cinemas. It said revenues were also driven by viewers around the world watching its popular YouTube channel.