Main Event third-quarter profit slows
Published:Wednesday | September 18, 2019 | 12:22 AM
Main Event Entertainment Group, which provides lighting and stage equipment for large events, reported higher revenue but profits slowed by 40 per cent in the July third-quarter 2019 compared with year – earlier levels.
“We have encountered cost control challenges this year. We have taken note of increased prices in third party inputs and increased incidents of inefficiency internally,” stated Main Event in the preface to its financials signed by its directors. “We are actively reviewing our processes and logistics with the aim to improve efficiencies.”
The company reported net profit of $14.7 million, on revenue of $468.6 million in the quarter compared to $24.5 million in profit a year earlier, on revenue of $363.7 million. Revenue grew nearly one-third despite the 40 per cent drop in profit, which signalled increased growth and investment at the company.
The company attributed its revenue growth to its “sustained thrust” to diversify the company’s core income stream. Main Event spent over $151 million to purchase property and equipment in the ensuing financial year on new services over nine months.
More than two-thirds of that spend was on audiovisual filming tools and equipment. A year earlier it also spent $160.3 million, according to the financials. The company created a business segment called M Style, which focuses on providing services for wedding, and a training centre called M Academy, which would augment its traditional entertainment services.
“The M Style experience, our presence in the west, and the M Academy project have been material contributors to growth,” stated the company.
Roughly 20 per cent of its revenue now comes from these newer product offerings. Over nine months, total revenue for the company hit $1.36 billion from $1.07 billion a year earlier. Profit before tax grew to $108 million over nine months from $105 million a year earlier.
Higher revenue resulted in cushioning the impact of investments in its new equipment and increased debt servicing. Consequently, its cash flow and equivalents at the end of the period totalled $21.7 million, compared to negative cash flow of $1 million a year earlier.
The group operates with $1.0 billion in total assets with shareholder’s equity at $631 million as at July 2019.