Pomvom lands deal with the new The Making of Harry Potter park in Tokyo
Pomvom lands deal with the new The Making of Harry Potter park in Tokyo
The company, which provides photography solutions for theme parks, will install systems in the new Harry Potter park being build by media giant Warner Bros. The transaction is expected to generate revenues of $9-13.5 million per year for five years
The new The Making of Harry Potter park in Tokyo is expected to generate Israeli company Pomvom an amount of NIS 32-48 million per year ($9-13.5 million). The company, which develops digital photography solutions for theme parks, entered into an agreement with the media giant Warner Bros according to which it will provide its services at The Making of Harry Potter park that Warner is building in Tokyo and which is expected to open this June. The company will also continue to provide services at two other Warner parks, Warner Bros Studio Tour in Los Angeles and The Making of Harry Potter in London.
According to Pomvom, the value of the deal, which was signed for five years, is expected to reach NIS 400 million ($113 million), of which 45% will come from the site in Japan. Most of Pomvom's contracts are based on revenue sharing, with 40-60% going to the site operator and the rest to Pomvom. This means that Pomvom's income from the deal should be NIS 160-240 million over five years. In 2022, Pomvom's revenues from the contract with Warner reached NIS 41 million ($11.5 million) and accounted for 21% of its annual revenues.
This agreement joins the non-binding memorandum of understanding that Pomvom signed in January of this year with the American amusement park giant Six Flags, according to which it will provide its services in 11 of its 27 parks in North America for five years. The final signing of the agreement is expected in the coming weeks. Pomovom estimated that its systems would start operating in the parks by the end of 2024.
The agreement with Warner will increase the number of parks in which Pomvom operates to 42 and the agreement with Six Flags is expected to increase it to 53. Another chain with which Pomvom works is Merlin, which operates amusement parks in Europe and the U.S. According to the agreement from June 2021, Pomvom provides its services at 17 of Merlin's sites for five years. Its revenues from this agreement reached NIS 94 million ($26.5 million) in 2022, which accounted for 49% of the company's revenue.
Despite the improvement in income in 2022, Pomvom is still not profitable. The annual loss even jumped from NIS 11 million in 2021 to NIS 24.5 million in 2022. At the end of 2022, the company had NIS 48.1 million in cash and cash equivalents. In the company’s estimation, the new deals, together with the implementation of digital systems and the improvement of operational efficiency, will lead to continued growth in revenues so that during 2024 it will be balanced or profitable.
Pomvom CEO Yehuda Minkovicz told Calcalist: "In 2022 we laid the foundations for digitization in the parks. The contract with Warner is a milestone in our development, with our growth coming through contracts with major players and in long-term agreements. Entering the site in Japan will give us a foothold in the second largest market in the world after the U.S. Beyond the agreements we have announced, we hope to reach additional agreements."
