Report cool on U.K. indie TV’s upside

Numis claims Shed Prods., RDF Medi overvalued

LONDON — The City’s love affair with Blighty’s burgeoning independent TV production sector is cooling.

A report from media watchers at Numis Securities claims Shed Prods. and RDF Media, which both bowed on the London stock market last year, are overvalued.

Report also is skeptical that new terms of trade giving producers more rights to their shows and forcing the BBC to air more independent production are as beneficial for the sector as assumed.

“Although both of these changes would appear to be straightforward wins for the indies, we believe the devil is in the detail, and that actually the upside from these changes is much more limited,” said Numis.

“One of the key concerns we have with indies … is the inherent volatility of much programming, which is subject to fads and fashions.”

Numis recommended a target share price of £1.87 ($3.27) for RDF, vs. Monday’s closing price of $3.80, and a target share price of $1.89 for Shed, vs. a closing price of $2.50 on the same day.

Acknowledging that RDF, producer of “Wife Swap” on both sides of the Atlantic, was “as good as it gets in terms of indies,” the sector had “a great deal to prove in terms of reducing volatility and demonstrating sustained organic revenue growth and cash generation.”

The report comes just days after U.S.-owned TWI concluded a deal to buy U.K. indie Darlow Smithson. It also is eying entertainment specialist Tiger Aspect.