A bumper set of results from Entertainment One (E1) was overshadowed by news that the movie distributor has held bid talks with Canadian film producer Alliance Films. Analysts say the acquisition could cost more than $300m (£191m) which is higher than E1's senior debt facility of $224m (£143m). Management say a deal, if it materialises, would be funded via debt and equity, implying a potentially significant equity fundraise.
In the year to March, E1's underlying pre-tax profits soared a third to £43m underpinned by strong growth in both film and TV. The fourth instalment of the Twilight Saga helped drive film revenues up by 17 per cent to £272m, with 152 releases generating $212m in box office takings. Moreover, a deal with online streaming service LOVEFiLM helped double digital revenues to £66m.
And a growing slate of TV programmes, and recommisions of successful programmes such as The Walking Dead and Rookie Blue, propelled television revenues up by 43 per cent to £97m. The unit is also continuing to benefit from the success of Peppa Pig, which, following its triumphs in the US, Australia, Italy and Spain, is set to debut in the Far East and Latin America next year. Peppa merchandise will also be rolled out in the US and Europe in time for Christmas.
Analysts at Investec expect current year EPS of 16.9p (2012: 15.4p).
ENTERTAINMENT ONE (ETO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 138p | MARKET VALUE: | £265m | |
| TOUCH: | 136-140p | 12-MONTH HIGH: | 209p | LOW: 128.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | 16 | |
| NET ASSET VALUE: | 110p* | NET DEBT: | 43% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 264 | -7.7 | -9.5 | nil |
| 2009 | 343 | -31.0 | -23.2 | nil |
| 2010 | 419 | 8.0 | 5.1 | nil |
| 2011 | 470 | 11.4 | 4.5 | nil |
| 2012 | 503 | 23.1 | 8.8 | nil |
| % change | +7 | +103 | +96 | - |
*Includes intangible assets of £165m, or 86p per share | ||||
