Media matters by Leslie Copeland

In as sector where egos, image projection and control freakery abound, Julian Turner, the boss of fast growing publishing house Electric Word, is a welcome antidote. He’s softly spoken, understated, quietly confident and wont to deliver on realistic trading promises and forecasts.

This is perhaps why some very weighty institutional investors now populate his shareholder register. As well as Newton Investment Management, Electric Word counts the revered Henderson Global Investors and the respected Marlborough Fund Managers among its key supporters.

According to Turner ‘the change in our investor base is very welcome. For a long time we were only really backed by retail investors – and of course we are, and will continue to be, grateful for their support. But larger, more significant investors have come on board and I think they have done so because they know we are capable of completing a significant transformation of this company. But of course we will do it in a measured proper way.’

For the full year to November 2003, the group produced turnover of just over £3 million and carried heavy losses. At the interim period to May this year, revenues of £4.8 million were struck and a welcome profit of £313,000 delivered.

The trading leap has come about via a mixture of sound organic growth and canny acquisitions in its two markets – the public sector and the sports sector. Needless to say, the full year results are expected to be very strong, with the market anticipating sales of almost £11 million and profits of £0.9 million.

Says Turner: ‘we have done many deals in our space, but we retain our original focus. We identify niche communities, we undertake a tremendous amount of intelligent database work and we sell magazines, newsletters and information that is of keen professional interest and relevance.’ Of course, Electric also undertakes training, research and is fully exploiting the events/conference side.

Interestingly, although the group operates websites and e-zines, the particular areas it operates in have not fully exploited the digital revolution. Turner explains that ‘our markets have not been quick to migrate online but it is now happening. We can see many interesting opportunities. We are only partially built’. At just £10.62 million, its only partially valued as well.

Content in the making
A fundamentally different business, but another where a quiet revolution has taken place these last few years, is ContentFilm.

Once involved wholly in the ultimately unrewarding business of film production and theatre distribution (remember the woeful Winchester Entertainment?), Content reinvented itself by purchasing (at a seemingly great discount) a film and television library called Fireworks for $21.5 million. When added to its existing film sales and finance arm – and its inherent skill at selling third party products for commissions
and fees – it all added up to an intriguing mix.

In the year to March 2006 Content managed to move back to the black (profits of £100,000 against losses of £5.9 million). Debt was also significantly reduced.

Chief executive John Schmidt, however, didn’t stop there. As soon as the results were out he announced the purchase of US-based UAV Corporation, for $7 million cash, and Allumination, an acquirer of home entertainment rights that distributes on DVDs, for $4.47 million. In all, this arm now has 700 different DVD titles to sell.

In a recent statement, Schmidt reiterated that trading at Fireworks International and ContentFilm International had remained strong over the summer, while business at Allumination had traded in line with expectations.

For added spice, he threw in news of a potentially lucrative distribution deal with Heavy.com, apparently one of the fastest growing youth websites in the world.
The upcoming interim results will make interesting reading for an asset- and content-rich venture that is valued at just £42.52 million.