Media content distribution company Worldwide Entertainment Group (ASX:WWG) has placed an operating subsidiary into voluntary administration after the strong Australian dollar restrained revenue and cashflow generation.
The company has appointed Victor Dye of Dye and Co as administrator to Worldwide Entertainment Production and Sales.
In a market statement, the parent entity said its operating subsidiary generates nearly all its revenue from overseas broadcast markets, with contracts denominated in foreign currencies.
As a result of the upswing of the Australian dollar against all major currencies – particularly the US dollar – operating cashflows have been significantly impaired.
The strength of the Australian dollar has reduced revenue by almost 30% since early in the financial year, Worldwide Entertainment said.
Despite the name, Worldwide Entertainment Production and Sales stopped generating new programming and wound down its production unit in 1H11, according to the company's interim report. It has since been concentrating on distributing its existing portfolio.
According to the report the parent has a second operating subsidiary, Genr8 Digital Media, which concentrates on licensing shortform content for digital, web video and other new media markets.
The parent entity reported a 38.1% decrease in profit for FY11 to $56,600, on 14% lower revenue of $3.34 million.
WWG shares were suspended from quotation on Friday, last trading at $0.044.
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