Proactive Investors - Run By Investors For Investors

Entertainment One drops as full year sales disappoint

A strong performance from eOne's Peppa Pig series was offset by a decline from the film and TV arm
john wick
Not just a Piggy face, eOne also will distribute films such as John Wick 3

Sales and profits at Entertainment One Ltd (LON:ETO) fell more than expected in the year to end-March as the Peppa Pig producer completed its pivot from film distribution to production.

Revenues of £941.2mln were down 9% on the prior 12-month period and a fair bit lower than the average City estimate of £1.1bn.

READ: Entertainment One raises £130mln to fund largest ever acquisition

This decline came as growth of 28% in the Family & Brands segment - thanks to a strong performance from Peppa Pig, significant growth from PJ Masks and delivery of new show Cupcake & Dino - was offset by a 13% decline in Film, Television & Music as its strategy adjusted to the shift away from film distribution.

The group said the transition of eOne’s film business was “now largely complete”, with a reduced slate of higher quality titles delivering a 56% increase in average box office revenue per release. Meanwhile, the firm's owned content rights library was independent valued at US$2.0bn, up from US$1.7bn a year ago.

eOne's underlying earnings (EBITDA) were 21% higher at £197.6mln thanks to 37% growth in Family & Brands and a 9% increase in Film, Television & Music, but reported profit before tax dropped to £36.8mln from £64.9mln due to higher impairment charges.

Earnings beat

Adjusted diluted earnings per share rose 30% to 25p, 3% ahead of analysts’ forecasts, while reported EPS fell to 2.5p from 12p reflecting the higher one-off charges.

The full year dividend was nudged up by 7% to 1.5p per share, as net cash generation from operating activities doubled to £30mln and net debt ended the year at £341.5mln.

Looking forward, eOne said the Family & Brands would be boosted by new seasons and licensing and merchandising lines for Peppa Pig and PJ Masks, the launch of a new series Ricky Zoom beginning in China, further cost savings in Film, third-party productions including the latest in Keanue Reeves' John Wick series, plus the £178mln acquisition of UK-based Audio Network that was completed post year end.

Shares in eOne were down 4.5% to 439.6p on Tuesday morning. 

View full ETO profile View Profile

Entertainment One Timeline

Related Articles

Augmented Reality on phone
March 21 2019
The firm currently has around nine companies in its portfolio that are either direct investments or through its sub-fund, Suir Valley Ventures, in which it holds a 22% stake
Live Company
Thu
In June 2019 the company signed a five-year deal to create tours themed around properties owned by children’s television network Nickelodeon
mobile marketing
April 02 2019
The merger is structured as an offer by Taptica that will see it owning 50.1% of the enlarged group and Rhythm One owning the remaining 49.9%

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use