Spackman poised for a solid recovery in 4Q

Its blockbuster movie 'Masters' could yield $7.9m.

Masters is set to be released on 22nd Dec and would likely contribute to Spackman's 4Q16 NPAT, said RHB.

"Our expectations of 7.5m in ticket sales would yield profits of USD5.6m (S$7.9m) and bring the company back into the black," said the research house.

In 3Q, a one-off gain of USD2.13m (S$3m) from the disposal of Opus pictures turned 3Q16 into profitability and reduced 9M16
net loss to USD1.65m (S$2.33m) from USD4.86m (S$6.85).

According to RHB, the divestment of loss-making Opus Pictures should reduce SG&A costs significantly by c.70% and be an impetus for the company to bounce back into profitability in FY17.

Its other production house, Zip Cinema Co Ltd, has a good track record and aims to produce 1-2 movies pa.

Coupled with Spackman’s joint ventures (JVs) to produce other movies, these factors should spur growth going forward, said RHB.