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Peppa Pig the star performer once again for Entertainment One as profits climb

The FTSE 250 group’s flagship brand helped to more than offset a slowdown in the films business last year

Peppa Pig
China is proving to be a lucrative market for Peppa Pig

Another strong showing from Peppa Pig helped to offset a weak performance in Entertainment One Ltd’s (LON:ETO) film division last year.

The rollout of Peppa into China, as yet a relatively untapped market, is going strong, with more than 40mln books having been sold since its launch two years ago, while the show is enjoying “ongoing success” in its more established territories.

READ: Peppa Pig brings home the bacon

Group adjusted pre-tax profits for the year ended March 31 climbed 11% to £144mln (2017: £130mln), driven by the Family & Brands division, which saw sales jump 50% to £138.6mln.

But total group revenue slipped 4% to £1.05bn (2017: £1.08bn), weighed down by a weak performance in eOne’s film division as a result of fewer movies being made.

The FTSE 250 group is “reshaping” its film and TV divisions into a single, more streamlined structure, which should generate cost savings of between £13-15mln a year by 2020.

On target to double size of business by 2020

“It has been a strong year for the group, as we combined our Film and Television operations into the Film, Television and Digital Division for FY19, completed the acquisition of the remaining stake in The Mark Gordon Company and continued the reshaping of our Film business,” said chief executive Darren Throop.

“All of these initiatives sharpen our operational focus and facilitate success in today's evolving entertainment market.”

He added: “I remain confident that we will achieve our target of doubling the size of the business in the five years to FY20.”

New cartoons doing well, too

Markets.com analyst Neil Wilson wrote: “Peppa Pig is the golden goose for Entertainment One but it doesn't always do to be so reliant on a single franchise, even one as popular as the cheeky little piglet.

“Last September the company hinted at ways of becoming less dependent on the series, at the same time as it talked up the prospects of the series reaching large new audiences.”

He continued: “Judging by today's FY results Peppa remains unstoppable and the further good news is that there's lots more in the stable for the firm, with PJ Masks now also doing very well.”

Shares edged 0.6% higher to 290.8p in early deals on Monday.

--Updates for analyst comment and share price--

Quick facts: Entertainment One

Price: 557.5 GBX

AIM:ETO
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Market Cap: £2.78 billion
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