Entertainment One Ltd (LON:ETO) expects full year revenues in its family division to jump 50% thanks to the popularity of Peppa Pig.
The UK film and television production company said Peppa Pig continued to perform well in mature markets such as the UK and Australia but “significant demand” for licenced products in China has been driving growth.
The children’s TV show had more than 45 billion views on Chinese video-on-demand platforms and tie-ups with more than 50 licensing partners.
READ: Entertainment One shares rise as it reports better-than-expected full year profits
However, the company – which also sells Peppa Pigs toys merchandise – acknowledged the challenges on the high street following the collapse of Toys R Us in the UK.
It expects there to be “some impact” to its brands in the short term and it is “monitoring the situation closely” but added that the impact is “not anticipated to be significant”.
Film box office revenues fall
The film division is expected to see box office revenue drop about 37% as the number of titles it released fell to 145 from 172 the previous year.
Movie titles in the period included ‘I, Tonya’, ‘Molly’s Game’ and ‘The Post’, which all received Oscar nominations.
In the new financial year, the company said the distribution pipeline is expected to be strong with planned releases including: family adventure comedy ‘The House With A Clock In Its Walls’, starring Cate Blanchett and Jack Black; ‘On The Basis Of Sex’, a biopic of US Supreme Court Justice Ruth Bader Ginsburg, starring Felicity Jones and Army Hammer; and ‘Green Book’, a period drama starring Viggo Mortensen and Mahershala Ali.
“Once again, Entertainment One has delivered a robust performance for the year with great momentum in both television and family,” chief executive Darren Throop said.
“The repositioning of the film business is progressing on track and we are well-placed to put a greater emphasis on a production model supported by strong content relationships.”
Shares fell 1.9% to 279p in late morning trading.
Relying too heavily on Peppa Pig franchise a risk, says analyst
AJ Bell investment director, Russ Mould, said: “The Peppa Pig children’s series remains a big driver for the company as it performs well in mature markets like the UK and Australia and expands in newer geographies like China and Japan.
“Being too closely tied to one blockbuster franchise is a risk though, as investors in Harry Potter publisher Bloomsbury could attest. Bloomsbury traded close to £4 when Pottermania was at its height in the mid-noughties but now changes hands for just 176p.”