Investor Wag Informal Investment Insights

Beyond International Limited (ASX:BYI) FY13 Results

Today the company reported FY13 NPAT and EPS 9.6% above FY12's results. This is slightly below the low range of the guidance given earlier this year of a 10-15% increase. As such, a few investors headed for the door which saw a large 9.44% drop in share price by day's end.

The slight miss in forecast can be entirely attributed to the continued sluggishness of the digital media division BeyondD. Not only did it not turn a profit, but it also took a net -$350k hit on EBIT (-$650k write down of goodwill but +$300k reversal of earnout payments).

Other points of interest:

  • The home entertainment division continues to struggle. No surprise here, it's going to be all about managing the decreased demand for physical media over time and the transition to, likely less profitable, digital platforms.
  • Its core business of making TV shows and distributing them is going well. Revenues increasing in the two divisions by 10% and 23%, and EBIT up 4% and 51% respectively. The margin compression of the production and copyright segment is of slight concern, but it could be entirely a timing issues.
  • 34% of the company's revenues is USD denominated. A falling AUD generally has a positive impact. However the company does enter currency hedging contracts for new productions and this saw a net impact of -$200k. If the AUD remains at its current levels or continues to fall against the USD we will see additional positive impacts. However due to hedging, the impacts will likely to be always slightly delayed rather than immediate.

Overall, not too much to complain about. It's has once again strung together another good result. And it's still attractively priced (P/E ~10.5) for a growing, foreign currency exposed, non-mining-related company in this current environment.

As discussed previously, the biggest challenge and opportunity for Beyond is the changing environment for content producers. If one can make the right moves, it may work out very profitably. Kevin Spacey has something to say on this topic also...


BYI last traded at $1.63.

Disclosure: At the time of publishing I own shares in BYI