Fiscal woes turn Star’s future dark

U.S., Euro prod'n causes lower profits for Oz producer/distrib

SYDNEY — Dark clouds in the form of falling profits and sagging share prices hang over major Australian TV and film producer-distrib Southern Star, executive chairman Neil Balnaves admitted Tuesday at the company’s annual general meeting.

Sagging European demand for Aussie drama, caused by Euro broadcasters increasing local production and committing to large U.S. output deals, saw Southern Star’s annual net profit nearly halved to A$5.5 million ($3.6 million) in the year to March 31 and has forced the company to diversify into kidvid and docus.

European program sales, which normally contributed 70% of the company’s revenue, were down to 35%, while the company’s stock price is down from a 52-week high of 99¢ to 63¢.

Balnaves warned that earnings for the six months to Sept. 30 would “show reduced profits.”

While Southern Star’s acquisitions last year of British producer-distribs Circle and Primetime created the world’s 10th-largest indie distrib of English-lingo programming, Balnaves admitted that in the current problematic environment for independent programming sales, “we went out and bought the equivalent of straw hats in winter.”

Addressing persistent rumors that Southern Star was the subject of a takeover offer, Balnaves said falling profits and stock prices meant “opportunistic buyers will come knocking, just as we did (with Primetime and Circle).”

Meanwhile, Southern Star has clinched a deal for America’s Showtime and Hallmark to join Star to produce a miniseries remake of “On the Beach.”

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