Lahore, March 07, 2022 (PPI-OT):The ratings reflect Brainchild’s ability to uphold its relative market position in its respective niche of the advertising arena. With a portfolio of sound multinational clientele, the Bee Squared Group (Brainchild, Blitz and Z2C Pakistan), grasps a prominent position in the related market. Strength is derived from company’s strong customer base which are renowned and leading corporate in their respective segment companies. Sponsor acumen provides comfort to the ratings as is evidenced through well-devised corporate strategies.
Additionally, association of an international media brand and support of a team of energetic individuals bodes well for the business prospects. The operating segment of the company is directly influenced by the pattern of advertising expenditure in the economy. Future advertisement paradigm is shifting towards digital media, and the Company is positioning itself accordingly to take benefits. During 1HFY22 revenues showed slight growth whereas margins remained static. Going forward overall performance of the company is expected to improve as forecasted by the management based on future business dynamics.
Media business also anticipated to receive benefits from the recovery and revitalization of the overall growing economy and the industry. The concept of Brainchild functioning as a bridge between clients and media entails timely delivery of services and payments, key recipe is prudent cash management. Brainchild has carved out strategies to avail benefits of its liquidity management schemes. This income stream nurtures the company’s bottom-line margin, in the absence of which the profitability falls thin. Financial risk profile is displayed by adequate coverages and leveraged capital structure. Borrowings majorly constitute short term lines from commercial banks to fund working capital needs and optimize cash management operations.
The ratings are dependent on the management’s ability to sustain the market position amidst fierce competition and changing business environment. Profit generation from core business remains critical. Meanwhile, financial metrics including but not limited to working capital management and debt coverage must be upheld.
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Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
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Lahore, Pakistan
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Email: hammad.rashid@pacra.com
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