In 2005, HUMNL shares were offered via an Initial Public Offering (IPO). Its authorised and the paid-up capital is Rs 700M and Rs 500M, respectively. Of this, Rs 270 million were raised from sponsors, Rs 80 million from private placements and Rs 150 million from the general public.
Within the television medium, HUMNL offers HUM TV, HUM Sitaray and Masala TV under its belt. Besides, its publications include Masala TV Food magazine, Humsay, Catalogue (a Bridal Couture Week Magazine), and Style G.L.A.M. Just recently, the company has acquired Newsline magazine which is among the leading social political magazine in Pakistan.
HUM NETWORK'S GLOBAL PRESENCE: HUMNL is aggressively pursuing its vision to become an internationally famed channel. By expanding its global presence in a jiffy, the company is leading by example. Besides its subsidiaries in the UK and USA, the company is taking the next big step by setting up a subsidiary in the UAE. This was unearthed by the company through a stock exchange announcement in the beginning of the month. Referring to the notice, "The name HUM Network FZ LLC has been reserved with the UAE authorities for the formation of the wholly owned subsidiary. The said subsidiary will be registered after regulatory approvals and completion of the due process in UAE".
HUMNL'S FINANCIAL JOURNEY OF 5 YEARS: HUMNL's financial performance during the last two years has been very encouraging. Its resounding success started from FY13 when HUMNL flaunted a bottom line growth of a whopping 98 percent year-on-year. Since then, double-digit profitability growth has become more like a norm for the firm. Its revenue generation capacity has also stayed healthy with an average annual growth rate of 21 percent between FY09-FY14. Higher revenues are the outcome of HUM TV going global and the gradual diversification in its revenue base.
However, the good point is that despite strengthening top line, the company has successfully worked on moderating its production costs during the last three years. From a level of as high as 56.6 percent in FY12, its production cost tanked to 48 percent in FY14.
Thanks to strong top line growth coupled with cost rationalisation, gross margins have improved to 48 percent from as low as 37 percent in FY12. However, this is still low when compared to a gross margin level of 58.8 percent in FY09. But with the company growing by leaps and bounds, gross margins can be expected to escalate further in coming times. Besides, its deleveraged balance sheet is another interesting feature that alleviates the financial servicing burden from the income statement.
HALF YEAR ENDED DECEMBER 2014: It seems like there is no stopping to HUMNL's rising trajectory. The beginning of FY15 proved to be no exception to the trend with the profitability boasting a growth of a healthy 31 percent year-on-year. During the half year ended December 2014, the company feasted on burgeoning top line, declining costs and improving margins.
Top line marked a rise of 33 percent year-on-year with HUMNL's growing market share of its satellite channels. Owing to management's successful cost rationalisation efforts, gross margin improved by 200bps. Net margin, on the other hand, inched down a tad owing to rising distribution costs.
REVENUE BASE: ADVERTISEMENTS STILL DOMINATING Looking at the revenue base of HUMNL, the share of revenues from advertisements has gradually declined, but it still dominates with a revenue contribution of 90 percent as of December 2015. Focus on subscription income is rising steadily and now stands at 8 percent (FY13: 2percent, FY14: 6 percent). Digital media division is in its infancy stages and hence not in a position to contribute a significant share. Production revenue contribution, however, has remained stagnant at 2 percent since FY13.
FUTURE OUTLOOK: HUMNL's plans seem to be far-reaching. Its management is constantly coming up with new ventures, which has helped the firm to consolidate its market positioning while faring well for its financial footing. In this regard, the addition of UAE subsidiary under HUMNL's will be another breakthrough for the firm. The company can reap additional benefits in the form of increased geographical presence, additional revenues, a more diversified revenue base, and cost and efficiency advantages.
Besides, on the technological front too, the company has managed to keep up the pace and the launch of 3G and 4G networks in recent times speaks volumes that the company is gearing up its digital media division. Hence, increased revenues from this segment can be expected to buttress bottom line growth in years to come. With HUM TV's increasing global presence, the management is mulling over to bump the global outreach of Masala TV. HUMNL's unfurling horizons make it well-equipped to cope up with the competition given by news channels in recent times.