Seven Arts Pictures plc (sapxf.ob)
Entertainment & Leisure
- Tremendous Market: Both domestically and abroad, the film and entertainment industry shows continues to grow and shows no signs of slowing down. Worldwide, box office receipts reached another all-time high in 2007 with $26.7 billion, a 4.9% increase from 2006 (Source: Motion Picture Association of America) and this year is already setting new records. Seven Arts Pictures is making substantial progress in capturing market share in this industry. In FY ’07, the Company generated approximately $10 Million in revenues and took in $2.2 Million in profits. For 2008, the Company projects estimated revenues of $16.5 Million and profits of $4 Million. With such a pace of growth, Seven Arts Pictures has a forward P/E of 3.8, a fraction of the industry P/E of 29.4.
- Housing downturn and Higher Oil Prices: With oil prices reaching all time highs and the housing prices no longer booming, consumers are cutting down on travel, shopping, trips, and spending on luxury good. One area benefiting from this is the movie business as people home or stay closer to home and they are increasing their viewing of television, DVD rentals, and trips to movie theaters, which provide excellent low cost entertainment and substitute for vacations, shopping trips, and long distance family visits.
- Emerging Players: Partly due to the tremendous capabilities offered by the digital movement, independent film production has surged in recent years. From 2001 to 2007, the percentage of total films release in the U.S. by “independent” studios has increased from 59% to 70% (Source: Motion Picture Association of America). Large studios have devoted their efforts to chasing the next blockbuster and spent ever greater sums of money in production and distribution. The average cost to make and market a major MPAA member company film was $106.6 million in 2007. This includes $70.8 million in negative costs and $35.9 million in marketing costs. (Source: Motion Picture Association of America). By adopting a strategy designed to reduce capital expenditures, Seven Arts Pictures intends to participate in a highly profitable market niche within the film and entertainment industry, and capitalize on developing trends in this dynamic industry.
- Changing Face of the Industry: The increasing digitization of all media types is fundamentally altering the way that people listen to music and watch movies. Following the lead of independent film makers, even major motion picture studios like Sony Pictures, Paramount, and Universal have seen the writing on the wall and partnered with digital distributors. According to Benjamin Feingold, Sony's president of worldwide home entertainment, digital distribution and acquisition, "This is a landmark development in the evolution of home entertainment,” and movie theatres appear to be poised to turn completely into digital cinemas within the next 10 years if not sooner, says John Fithian, president of the National Association of Theatre Owners (Source: United Press International). This paradigm shift in the film industry presents unique opportunities for enterprising and agile companies like Seven Arts Pictures that are capable of adjusting to the changing face of the industry.
Company Contact Information
2-3 Fareham Street
London, , W1D 3BB
United Kingdom
- Phone:011 44 2070435394
- Fax:n/a
- E-mail:info@7artspictures.com
On-line contact form
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