Having walked away from merger talks earlier this year, Welsh television producer Boomerang is cash rich and looking to pick up some bargains.

With its own in-house production facilities, including studios and editing suites, the Cardiff-based company produces a wide variety of television programming ranging from drama and children’s to comedy and extreme sports. A swathe of recommissions were won during the year, with much coming from Channel 4 and its Welsh counterpart, S4C.

Annual results to May showed all of this flowing through to the financials, with revenues, boosted by two acquisitions, doubling to £20.9m and profits up 144% to £2.1m, before tax and exceptionals. Cash flow of just over £1m plus £2.2m of proceeds from the IPO on AIM last November boosted cash levels to £6.3m.

Further acquisitions, to capitalise on a government drive to make more television programming in the regions, are being sought. Broadcasting regulator Ofcom is increasing its quota of programming made outside London from 30% to 35% and Boomerang sees this as an excellent opportunity.

Many London-based production companies struggle to win commissions, but if they used Boomerang’s in-house studio and editing suites they would qualify for these regional quotas. ‘We’re looking for two different types of company,’ states finance director Mark Fenwick, ‘digital media companies and those with good exposure to the networks [BBC and ITV].’

Adding that ‘valuations were racy in the sector but they have come down now’, Fenwick hopes to add ‘at least one’ acquisition in the current financial year. Shares in Boomerang Plus look fairly valued on forecast earnings of 17.3p for 2009, but with around 90% of revenues already booked, the company is well positioned. Buy.

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Boomerang Plus	AIM	£13.13m	147.50p	0.00p
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