Shares in Entertainment One Ltd (LON:ETO) collapsed on Tuesday Morning after the Peppa Pig owner’s interim results failed to live up to expectations.
Underlying earnings (EBITDA) fell to £38mln for the six months ended 30 September, well down on the £52mln eOne posted for the same period last year, despite revenues actually increasing by almost 20% to £401mln (1H 2015: £337mln).
Normalised profit before tax also slipped sharply to £23.8mln, wildly missing City broker Numis’ expectations of £37.5mln.
The film and TV distribution firm said investment into its theatrical and film arm was behind the drop and expects this to drive second half performance, but the City was unimpressed nonetheless.
The wider markets didn’t react well either, with the share price posting a double digit fall in early trading.
Numis did hold out some hope for the group though, pointing out that eOne has “good visibility over its performance in the second half and is on track to deliver full-year results in line with expectations.”
It wasn’t enough to change the broker’s generally downbeat assessment of the stock though, and it retained its ‘hold’ recommendation and price target of 215p from Entertainment One.
eOne has been in the news quite a lot over the past few months after it rejected a £1bn takeover offer from UK broadcasting heavyweight ITV PLC (LON:ITV) back in August.
At the time, the Canadian firm claimed that the offer “fundamentally undervalues the company and its prospects.”
Shares in eOne slumped by 12%, or 30p, to 216p.