Pulse adjusts approach to revenue recognition
Published:Wednesday | December 3, 2025 | 12:05 AM
Pulse Investments Limited has reported a sharp contraction in core revenue for the financial year ending June as it reshapes its business model.
The modelling agency and hospitality company reported turnover of $157.5 million, down from $815.1 million in 2024 – a decline of more than 80 per cent, reflecting the company’s decision to halt the recognition of new advertising entitlements, a non-cash component of revenue tied to barter arrangements with media houses.
Management, led by Managing Director Safia Cooper, reported that while entitlements earned during the year amounted to $326.7 million, they were not booked as income, pending evidence of monetisation.
Pulse’s external auditor, Baker Tilly, flagged the advertising entitlement balance – valued at $2.23 billion, or 18 per cent of total assets – as an area of concern. In its audit report, Baker Tilly noted the uncertainty surrounding timing and mode of utilisation of these entitlements, and confirmed that an impairment provision of $450 million has been applied, up from $316 million last year.
The auditor emphasised that while broadcasters have confirmed the amounts due, recoverability remains dependent on Pulse’s ability to convert these credits into cash or equivalent value. Pulse, meanwhile, applied nil value to both in-kind sponsorship and advertising entitlements.
At year end, Pulse’s operating profit fell to $344 million, buoyed by unrealised gains of $410 million on investment properties. Without these fair value adjustments, the underlying business would have posted a significant operating loss.
Administrative and other expenses were trimmed to $93 million, compared to $285 million in the prior year, reflecting cost containment amid reduced show production and sponsorship activity. However, impairment charges – primarily on advertising entitlements – totalled $134 million, further eroding operating margins.
Net profit amounted to $358 million, or five cents per share, down from $543 million, or eight cents per share, in 2024.
The company’s net cash holdings improved slightly to $33.6 million, but liquidity remains tight against current liabilities of $205 million and non-current obligations exceeding $2.27 billion, including a senior secured bond of $804 million and related-party debt of $987 million.
Post-year end, a lawsuit was filed on August 25 by Hortense Waul, businesswoman and retired physical therapy assistant who is also a top-10 shareholder in Pulse with 2.575 per cent of the shares. Waul is seeking to recover an alleged unpaid shareholder loan of US$80,000.
Pulse’s balance sheet continues to lean heavily on real estate. Investment properties climbed to $8.69 billion, up from $8.21 billion, following revaluation gains on Pulse’s Trafalgar Road and Villa Ronai holdings. These assets now represent 72 per cent of total assets. Leasehold properties and improvements were carried at $519 million, unchanged from the prior year.
The auditors highlighted the valuation of investment properties as a key audit matter, warning that small changes in discount rates could materially affect the reported values.
Pulse is now focusing on luxury hospitality and wellness tourism as paths to growth, with plans to redeploy the undrawn portion of a $1.1-billion development facility towards the transformation of Villa Ronai into a five-star resort, management said. At year end, this application was under review by Barita Investments Limited, the bond arranger.
Pulse said the repositioning will unlock long-term value, but the timeline and funding structure are yet to be finalised. At the company’s annual general meeting in April, Chairman Hilary Phillips announced a team dedicated to analysing the options.
Subsequent to the meeting, Pulse announced the addition of hotelier Dimitris Kosvogiannis to its executive team to drive the luxury hospitality programme.