Monday 5 December 2016

Ardmore expansion could boost profits by €1m a year, buyers told

Published 30/10/2016 | 02:30

Former U2 manager Paul McGuinness
Former U2 manager Paul McGuinness

Ardmore Studios has told potential buyers that earnings in the current year will take a hit due to the postponement of a €100m-plus movie production and filming for Penny Dreadful coming to an end.

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However, the Co Wicklow studios, owned by former U2 manager Paul McGuinness and accountant Ozzie Kilkenny, expect earnings before interest, tax, depreciation and amortisation (Ebitda) to go from €1.4m this year to around €2.3m next year. This is as a result of new shows going into production and income from 47,000 sq ft of extra space.

It is understood that an information memorandum prepared by IBI Corporate Finance has outlined how additional stage space could boost revenue and profits in the coming years.

Potential investors could increase Ebitda by investing €5m in the expansion of its capacity.

This would have the potential to bring in additional earnings of €1m a year.

There are also plans to further develop Ardmore with the possibility of developing a tourist facility at the site being flagged, according to sources close to the process.

The site's location in a prime area of Leinster is also highlighted with the potential for alternative uses raised.

IBI believes that recent improvements to the section 481 tax breaks for the film industry will place Ardmore in a good position to attract international interest.

Sources said that a multiple of 10 times Ebitda would be expected for an asset such as Ardmore, suggesting a price of €15m.

However, with management expecting bigger profits next year, the sellers may be seeking a higher price. The company had been close to closure in 2012 but has turned its financial position around over the past three years under the management of Siun Ni Raghallaigh.

She is a shareholder in Troy Studios, a newly-opened facility in Limerick.

Ardmore has housed a number of major productions including The Tudors and Braveheart.

Productions currently on site include The Professor and The Madman, and Into the Badlands, while in its statement the company said a "healthy number" of potential productions are in the pipeline.

Sunday Indo Business

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