UK distributor plans to cancel listing on AIM after 2012 loss.
Metrodome’s preliminary results for 2012 highlight ongoing difficulties for the UK distribution business as a whole.
Metrodome Group posted a full-year loss before income tax expense of £870,000, from a profit of £412,000 in 2011.
Company revenue fell 9% from £9m in 2011 to £8.2m in 2012 and underlying EBITDA came in at only £93,000, down from £656,000 in 2011.
DVD rental revenue fell 17.2% to £290,000 and DVD sell through dropped 18.2% to £5.4 million.
Cinema sales almost doubled year-on-year but VOD revenue, which the company sees as a key driver of future growth, only saw a marginal increase.
However, despite the downturn in some key areas, Metrodome remained profitable with gross profits of £3.1m and total income of £4.4m, a significant improvement on the £8.3m loss in 2011.
Plans to leave AIM
In light of the difficult market conditions, however, the Metrodome board has decided to cancel its listing on AIM, the sub-market of the London Stock Exchange.
The company said of the de-listing: “We can no longer justify the expense [of being listed on AIM] when we see little prospect of raising funding in the near future.”
Metrodome, as with all UK distributors, was hit hard by HMV entering administration but finance director Deborah Brown also admitted that subsidiary company Hollywood Classics, while still remaining profitable, had “not been doing as well as the company would have liked”.
The company made four staff redundant in early 2013 in a bid to cut overheads and needed to secure new loan funding of £750,000 in January 2013 from major shareholder Alerria Management.
Despite the financial downturn, the company has been aggressive in its volume and type of acquisitions in the past 18 months and has recorded a number of critical hits including 2012 Oscar nominated In Darkness and 2013 Oscar nominated drama A Royal Affair. Among well-received recent acquisitions are Frances HA and Prince Avalanche.
In a bid to diversify and increase rights ownership, the company also announced its expansion into production with a slate of five films through subsidiary Cinedome.
Metrodome chairman Mark Webster conceded that the current market poses significant challenges.
“We have seen a shakeout in the film distribution industry with the recent difficulties of some of our main competitors,” he said.
But he expressed optimism that the company was well positioned to improve its financial standing: “The Group is in a good position to capitalise in the marketplace and well positioned for organic growth.
“This will be achieved by continuing to acquire and/or produce good quality content for UK distribution and the acquisition and representation of classic film libraries across all platforms including the emerging digital platforms which will be a catalyst for growth.”
The company released seven films theatrically in 2012 in addition to 22 one-print releases to launch DVD campaigns. It released 57 DVD titles.