The Market Loves DEAG’s Figures

With sales up 26 percent to euro 83 million and liabilities reduced by around euro 29 million, the Prime Standard (Neuer Markt) appears to be taking the view that DEAG chief Peter Schwenkow is sorting the company out and it’s worth a small gamble that growth will come from stability.

It’s a message Schwenkow sent out more than a month ago when telling Pollstar he expected the numbers for 2006 to be "good" and 2007 to be "even better."

The media and market analysts were also expecting a fairly buoyant balance sheet, and the share price rose from euro 1.58 to euro 2.05 during the latter part of February.

It bumped back down to euro 1.70 in the two days before March 30th, when the 2006 results were published. But when the news of an improved performance was published, it quickly soared up to euro 2.25, nearly 50 percent up on its early February value.

"Obviously the capital market loved them," Schwenkow told Pollstar after the announcement that last year’s figures show a 50 percent increase in (EBIT) earnings.

Tours including Justin Timberlake, The Who, Christina Stürmer, Lang Lang, Amy Winehouse, and Chris de Burgh and shows with Genesis, Take That, and Gwen Stefani are all selling well, and Schwenkow said he’s looking for 2007 sales to grow by at least 20 percent (to more than euro 100 million) and the EBIT to double to euro 6 million.

After declaring 2004 profits of about US$5.9 million dollars, which was mainly the result of a one-off tax windfall, DEAG’s had a net loss of euro 3.8 million for 2005, although that included exceptional items such as writing off euro 3 million in respect of the goodwill for the business areas managed by former partner Marcel Avram.

For DEAG shareholders, it’s a very satisfactory end to what was sometimes a turbulent year.

Apart from DEAG coming to the end of its agreement with Avram’s Swiss-based Entertainment One, it also parted company with Barrie Marshall’s London-based Marshall Arts.

Expansion on the promoting side included acquiring a majority share in Hermjo Klein’s Arena Concert & Event (ACE), which joins a team that already includes Carlos Fleischmann, Johannes Wessels and Klaus Boenisch.

In November, when many of the company’s three-year bonds came to fruition, Schwenkow was spared from using the proceeds of the Marshall Arts deal to settle them as most of the bondholders opted to switch to DEAG shares rather than draw their cash.