SINGAPORE (Feb 28): Spackman Entertainment has swung back to profitability in FY17, posting earnings of US$2.98 million ($3.93 million), compared to a loss of US$2.43 million in FY16.
Revenue for the full year ended Dec 31 2017 was 36% higher at US$20.6 million from US$15.1 million a year ago.
This was mainly attributed to an increase of US$4.90 million from distribution of films and others due to the recognition of the share of profit of US$3.98 million for acting as the producer for Master and sales of distribution rights/video on demand (VOD) sales for the ancillary market in Korea for The Outlaws of US$2.60 million, as well as an increase of US$2.25 million from leasing of equipment to third parties by Frame Pictures which was acquired in March 31 2017.
This was partially offset by a decrease of US$1.98 million from production of films as the percentage-of-completion for Golden Slumber and Sovereign Default in FY17 was lower as compared to that for Master in FY16
Cost of sales decreased by 36% to US$12.3 million from US$19.1 million last year, partly attributed to a decrease of US$5.60 million from distribution of films and others due to fewer motion films distributed by the group in FY17 mainly as a result of the disposal of Opus Pictures.
Hence, gross profit for FY17 came in at US$8.28 million, compared to a gross loss of US$4.0 million in FY16.
Other income was 61% lower at US$3.28 million from US$8.41 million a year ago, mainly because there was an absence of non-recurring gain of US$2.40 million in FY16, as well as the absence of loss on film borne by external investors which amounted to US$5.45 million in FY16.
General and administrative expenses increased by 24% to US$6.04 million from US$4.89 million in the previous year, due to the acquisition of Frame Pictures.
During FY17, the group recorded profit from share of results of an associate of US$38,000 compared to a loss of US$71,000 the same period last year, attributable to its talent management business while its losses incurred in FY16 was mainly due to its variety show production, TV/media commercials and music video production businesses which had been disposed of in July 2016.
As at Dec 31 2017, the group’s cash and cash equivalents stood at US$6.24 million.
Richard Lee, interim CEO and executive director of Spackman says, “Some of the key acquisitions and investments completed during the year have already contributed to our fiscal year results, and we believe that they will continue to positively impact our corporate development. As we focus on leveraging our content and talent management platform to participate in top quality projects, we look forward to further benefitting from our entertainment-related investments.”
Shares in Spackman closed at 9.4 cents on Wednesday.