Lavern Clarke, Business Editor
Chief executive officer of Pulse, Kingsley Cooper, plans to implement merchandising, tours and other projects to build his cash earnings in the year ahead. - File
A near doubling of advertising and sponsorship deals has boosted Pulse Investments Limited's profits by 126 per cent to$266.14 million at its financial year ending June 2007.
The modeling agency, which is substantially owned by Kingsley Cooper, reported gross turnover of $788.9 million, saying its operating income comprises sponsorship and advertising deals, model agency fees, government grants, property leases and ticket sales.
"Our earnings are about what we expected at this point, but there is great opportunity for future growth," Cooper told the Financial Gleaner on Wednesday.
"However, our earnings increased significantly in all areas of operation, with increases ranging from 33 per cent in rental income to 250 per cent in ticket sales," Cooper told the Financial Gleaner.
Some of the income gains in the past year were linked to business growth in foreign markets, he said, noting that Pulse experienced "increased international expansion, including into hard currency markets for television shows and live events" in places like the United Kingdom and United States.
Ad entitlements
Advertising entitlements rose 79 per cent, cash sponsorships 63 per cent, and model commissions by 73 per cent.
Pulse also carries on its balance sheet another $476.5 million of advertising entitlements, listed as short term assets, up 94 per cent over 2006.
"Only sponsorships relating to the particular year for which the financial statements are being done, are brought into the accounts for that year," Cooper said.
The company's fortunes rest on how persuasive Cooper and his team are in landing new deals. Pulse's business revolves around its model searches, fashion shows and other staged events, and products such as calendars and magazines. It has five television shows.
The modeling agency boss has told Financial Gleaner in the past that sponsorships are "year- to-year commitments", but there are cases were the contracts stretch over two years, and sometimes three, though the latter occurs infrequently.
Pulse is now a well recognised name on the national and Caribbean modeling and fashion scenes. Alongside the annual model searches in various countries, the company also runs Caribbean Fashion Week, which showcases the works of regional designers.
Cooper claims that it is the recognition, as well as continued search for new markets, that has boosted his business in the past few years.
"Sponsorships keep increasing because Pulse keeps improving the quality and reach of its events and activities and expanding its business," said Cooper.
"Very importantly also, Pulse keeps increasing the value proposition to sponsors."
That value proposition, he said, is in the form of bigger and better benefit packages, penetration of new markets, and plugging the product.
Last year, Pulse also doubled its profits to $117 million, up from $63 million in 2005. The company's stock, however, barely trades on the exchange. Pulse traded only twice in 2007, with the stock remaining firm at $2, well below its book value of $3.67.
On Wednesday, the asking price was $2.36 but bids were $2.15, resulting in no trades.
That current stock price, times its 253.67 million of issued shares, gives Pulse a stock market value of $503 million. Compared, the company's balance sheet reflects net assets of $965.6 million, with fixed and intangible assets of $428.55 million.
Expansion
Cooper says his outlook for the year ahead is continued expansion locally and internationally.
Planned product introductions include branded merchandise, international packaged tours to Pulse events, and outdoor advertising - all to generate cash.
Cooper is also in the process of developing his property Villa Ronai as a new money spinner, but that project is expected to take three years.
"We have been doing the necessary work in terms of planning and approvals for our Villa Ronai Destination Spa & Suites and we intend to start construction towards the end of the financial year," he said.
Ronai is to be promoted as a luxury spa, targeted at personalities in the entertainment and fashion industries.
The plans include 35 suites, a spa, shops and restaurants, and a fitness centre "with access to nature trails and other eco-experiences," Cooper said.
"Our intention is to continue to diversify our earnings base, with an emphasis on cash revenues."
The modeling agency ended its financial year in June with cash flows of just $1.6 million.
"Pulse's main earning strategy going forward is to constantly develop and improve these new and existing products," said Cooper, "and to use advertising entitlements to market them as well as support new products as they are introduced into the marketplace."
lavern.clarke@gleanerjm.com
