No Pain, No Gain: How showbiz and share can make a good mix
Saturday 02 October 2004
I love a good whodunit. And, to my mind, there is no better exponent of this fascinating art than Agatha Christie and her arch detective, Miss Marple. So imagine my delight at the prospect of a new Miss Marple TV series, with the accomplished actress Geraldine McEwan following in the proud footsteps of Joan Hickman as the rather ancient, prim and proper detective.
Chorion, an AIM-traded company, is behind this latest Christie initiative. It is one of those relatively recent creations - embracing what is described as intellectual property or, to be more explicit, the ownership and exploitation of a host of literary names. Besides Agatha Christie it takes in Georges Simenon (Inspector Maigret) and Nicolas Freeling (Van de Valk). It is also in talks to acquire the rights to another well-known crime writer. But murder mysteries are only part of the Chorion library. It has a burgeoning child's sector with Noddy and the Mr Men collection as star attractions.
I have followed Chorion for some time, and I regard it as a candidate for the No Pain, No Gain portfolio. Unfortunately, from my standpoint, its shares have been strong lately, following impressive interim figures. My current inclination is to hang on, hoping they drift lower once the swell created by the results dies down.
At the half-way stage pre-profits were £1.1m, up from £520,000. For the year, before goodwill amortisation, around £5.4m is likely, with maybe £8m or so in sight for next year. Like so many relatively small groups Chorion, capitalised at £40m, is not rewarding its shareholders with dividend payments. And, despite encouraging prospects, the share performance means long-term shareholders are out of pocket.
It can trace its lineage back to the Burford property group, which spawned the quoted Trocadero company, running a leisure centre in London's Piccadilly. The famous old Troc was not a profitable investment and Chorion, owner of some author rights and a string of sophisticated bars under the Tiger Tiger banner, emerged.
In May 2002 the bars were hived off as a separately quoted company, Urbium. It has, like the residue intellectual property side, prospered since the split - events that have not been fully reflected in the share prices.
I was, at one time, pondering slipping Urbium into the portfolio. There is no doubt that as bar chains go, it is exceptionally well run. It has smartly avoided the belly flops that have afflicted SFI and Regent Inns, and has achieved impressive progress. But Urbium is operating in one of the most accident-prone areas of the leisure industry and its strong exposure to London's West End could create added problems. So my interest in the bars chain evaporated. But my researches had, not surprisingly, spread over to Chorion - and I liked what I found.
I decided to wait until the interim results appeared. In retrospect, I should have moved in ahead of the figures. Yet even now, at 230p, the shares are not expensive. Readers may recall I criticised Chorion for the way it handled a £16.5m cash raising exercise earlier this year. Only selected City investors were invited to participate in a share placing at 203p, with the vast body of shareholders left out in the cold. Still, that is now water under the bridge and there is no point harbouring a grudge. Around the time it elected to pull in extra cash the group acquired, for £28m, the Hargreaves Group, famed for the Mr Men collection.
It has already demonstrated its ability to make assets sweat. Considerable success has been achieved with Noddy around the world and Enid Blyton's little character seems set for an interesting - and hopefully profitable - run in the US. The Mr Men portfolio appears ready for much more determined exploitation with only a modest increase in overheads.
At the other end of the spectrum, a four-strong set of Poirot TV films has been screened in this country and appeared in the US. A Maigret series has arrived in Italy. I remember the huge TV success Maigret enjoyed in the black-and-white Sixties with Rupert Davies. I, for one, would be delighted if the old French detective achieved another TV run in this country.
But Chorion's horizons will not be limited to detection and children's characters. The chief executive, Nicholas James, talks about spreading into romance and science fiction.
Showbiz is often unpredictable and yesterday's hit is no guarantee of continuing success. But Chorion does seem to have acquired the happy knack of topping the bill. It has attracted take over attention in the past. A cheapskate approach was rightly rejected. But it must be looking increasingly enticing to one of the international giants. Any bid could - and should - be a real blockbuster.
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