Micro cap television producer Zinc Media (ZIN:AIM) has renewed focus after exiting its loss-making publishing business. It is now seeking to consolidate a fragmented independent TV production sector.

Formerly called Ten Alps, and part-founded by pop star Bob Geldof, the company was renamed earlier this year as part of its shift in strategy. It now specialises in factual programming, receiving
a 2017 BAFTA nomination for Inside Obama’s White House.

In the year to 30 June 2017 the company returned to profit, albeit a modest £0.4m, at the adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) level. At the end of June, the order book for the TV division was up 76% to £6.5m and has subsequently risen further to £8m.

The development of streaming services through Amazon and Netflix has created demand for an increasing volume of quality content. To capitalise on this trend chief operating and financial officer David Galan says Zinc is shifting emphasis from one-off documentaries to longer running series which are suitable for international distribution. As part of this process the company is targeting selective acquisitions.

House broker N+1 Singer comments: ‘TV production assets are well sought-after and are scarce. Zinc presents a good opportunity to gain exposure to an undervalued stock in this attractive segment.’

Based on Singer’s forecasts for 2018 the shares trade on a forward price-to-earnings ratio of 11.7. (TS)

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