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DEAG’s 2017 “going according to plan”

Deutsche Entertainment AG founder and CEO Peter Schwenkow says Q1 has exceeded expectations, despite minor drops in both revenue and profit

By IQ on 01 Jun 2017

Mick Jagger, The Rolling Stones, Macau, 2014, Orient'Adicta, DEAG, Peter Schwenkow

DEAG will promote German dates for the Stones' No Filter European tour


image © Orient'Adicta

Deutsche Entertainment AG (DEAG) CEO Peter Schwenkow says he is happy with the German promoter’s start to the year, despite slight decreases in revenue and profit and a falling share price.

The value of DEAG’s sales in the first quarter (Q1) of 2017 was €19.5 million, down from €31.3m in Q1 2016, with gross profit and earnings before taxes and interest (EBIT) also both declining, to €6.1m (from €6.7m) and €200,000 (from €300,000), respectively.

Its share price has also fallen more than 15% in the last month alone, from €2.91 on 2 May to €2.47 today.

Despite this, Schwenkow says sales and EBIT in Q1 were “above expectations”, saying the Euro 2016 football championships “resulted in higher sales in Q1 and Q4 2016”.

According to the company’s latest financial results, its core promotion and ticketing businesses remain “very profitable”, with gross profit margin rising to 31.4% compared to 21.7% in Q1 2016.

“For us, 2017 has been going according to plan,” comments company founder Schwenkow. “Our activities in the UK in particular and in the domestic market have developed quite positively across the board.

“For us, 2017 has been going according to plan”

“In view of the good start to the second quarter and the well-filled event pipeline, DEAG will also be offering high-calibre, high-turnover and high-margin events in the quarters to come. These include, among others, the open air event Matapaloz at Hockenheimring that is likely to attract 70,000 visitors, top acts such as Iron Maiden, Anna Netrebko and Aerosmith and the German tour of The Rolling Stones, which is already sold-out.

“The Family Entertainment division will continue the strong growth of the previous quarters. The very successful, in-house Christmas Gardens are also being extended to other locations due to the positive response. For 2017 DEAG expects around 830,000 visitors at seven locations. In addition, the company’s own ticket sales through the online sales platform MyTicket will contribute to the sustained improvement in profitability.”

Schwenkow also reiterates DEAG’s intention to acquire another British promoter, saying the company is in “advanced negotiations” to add a third business to its UK stable (it partially owns Kilimanjaro Live and classical music promoter Raymond Gubbay Ltd). Sources tell IQ the company in question is a regional pop promoter.

DEAG was rebuked by German financial watchdog FREP earlier this month for “substantially overstating” its recent financial success.

 


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