LETTER TO SHAREHOLDERS
The last decade was an era of digitization for India and UFO has played a pivotal rolein the entire journey of transforming Cinema in India from being 100% physical prints tonearly 100% digital. This journey has been extremely challenging and we have successfullybuilt India's largest digital cinema distribution and in-cinema advertising network ofover 5000 screens. In the process significant long-term value has been created for allthe stakeholders in the cinema value chain. Our aspirations of digitizing cinema in Indiawere ably supported by Private Equity investors in the initial years of our operations andthey have successfully exited part of their investments through the Company's IPO.
During the first fiscal year as a listed Company we continued to deliver steadyimprovement in our performance. Total consolidated revenues grew by 19% to Rs. 5721 Mn infiscal 2016. EBITDA was higher by 15% at Rs. 1848 Mn and Net Profits stood at Rs. 635 Mnhigher by 30% over the previous fiscal. UFO has become nearly a net-debt free Company onthe back of healthy cash generation during the year. Our strengthened financial positionand improved profitability underpins the Board's recommendation of a final dividend of30% taking the total dividend for the year to 80% i.e. Rs. 8 per equity share.
Our performance during the year was driven by higher advertisement revenue increasedVPF and sale of products. Advertisement revenue was up 35% over last fiscal largely drivenby increasing volumes. The average inventory sold per show per screen grew from 3.36 to4.15 minutes and has substantial headroom for delivering growth going forward. We remainedfocus on enhancing business from existing advertisers as well as adding new advertisers towiden the client base. This was evident from the repeat business and higher number of newclients. On the theatrical side VPF revenues grew due to higher realization and morenumber of releases during the year.
A favourable macro-economic environment is essential for any business to operateefficiently. The Government has been pushing initiatives like 'Make in India Rs. and otherkey reforms to drive economic growth. The passage of the GST Bill and the implementationof the 7th Pay Commission Model Shop and Establishment Bill (2016) and One Rank OnePension (OROP) scheme are likely to result in higher consumer discretionary spends whichwill benefit the Media and Entertainment space.
The next few years are going to be very important for UFO as we will continue to buildon our past achievements and leverage our existing infrastructure in the big screenentertainment space. To further propel the growth in the foreseeable future we haveintroduced new strategic initiatives like Caravan Talkies NOVA CINEMAS and hyper-localadvertising solution - UFO Framez mainly driven by innovation.
It gives us immense pleasure to express sincere gratitude to all our stakeholders. Wewould especially like to thank our esteemed shareholders for their unconditional support.We would also like to appreciate the efforts and valued contribution of our employees andthe leadership team that have helped the Company to reach new heights.
Creating value for all stakeholders is our top priority which we intend to deliverthrough strong emphasis on values good governance focused vision and consistentperformance. We have placed the necessary building blocks for success and are confident ofcapitalizing on the opportunities before us and continue achieving healthy and sustainablegrowth going forward.
|Warm Regards || |
|Sanjay Gaikwad ||Kapil Agarwal |
|Founder & Managing Director ||Joint Managing Director |