Pre-tax profits at Entertainment One (ETO) may have fallen, due to higher marketing costs and a £2.5m one-off charge related to its proposed acquisition of Alliance Films, but the content owner and distributor is confident of a much stronger second half.
For one thing, there are some 100 film releases planned, which include the final instalment of the hit Twilight Saga franchise. A number of popular TV series are also boosting revenue such as Call Me Fitz, Rookie Blue and Hell on Wheels. Each of these series has been re-commissioned. US licensing and merchandising of Peppa Pig is also going much better than chief executive Darren Throop anticipated. "Peppa Pig has been well received, which is promising for both US and international growth," he says.
Longer term, E1 can expect to benefit from a deal with Steven Spielberg's Dreamworks, signed September, to exclusively distribute the studio's output in the UK and Benelux countries over the next four years.
The acquisition of Alliance Films, a Canadian entertainment company with over 11,500 titles, is still awaiting regulatory approval. Mr Throop says £110m has been raised in an oversubscribed equity placing to part-finance the deal.
Broker N+1 Singer forecasts full-year adjusted pre-tax profit of £48.9m with an adjusted EPS of 17.2p (from £43m and 15.4p previously).
ENTERTAINMENT ONE (ETO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 167p | MARKET VALUE: | £450.9m | |
| TOUCH: | 165-169 | 12-MONTH HIGH: | 209p | LOW: 129p |
| DIVIDEND YIELD: | nil | PE RATIO: | 33 | |
| NET ASSET VALUE: | 78p | NET DEBT: | 52% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 205 | 9.80 | 4.00 | nil |
| 2012 | 221 | 1.00 | 0.20 | nil |
| % change | +8 | -90 | -95 | - |
Ex-div:n/a Payment:n/a *Includes intangible assets of £160m, or 59p a share | ||||
