Rather than a golden goose, Entertainment One (ETO) has a platinum piglet. Peppa Pig, along with third-party deals and acquisitions, propelled the TV and film distributor's underlying cash profits up 11 per cent to £117m for the year to March.
The pre-school property drove sales in the TV segment up 32 per cent to £232m. However, fewer theatrical releases, a tepid worldwide box office and falling DVD sales pushed film revenues down 13 per cent to below £600m.
Entertainment One continued its shift towards higher-margin production by acquiring reality TV studios Force Four and Paperny. It also bought Grey's Anatomy producer The Mark Gordon Company. The group intends to deliver over 850 half-hours of new TV programming this year - nearly a half more than in 2014 - and release 250 films into cinemas, up from 227 last year.
Acquisitions meant adjusted net debt ballooned 36 per cent to £225m. But the group's cash generation also improved, with adjusted free cash flow more than doubling to £41m. And prospects look strong: international roll-outs and new product deals with US retail giants Walmart and Target promise to help Peppa Pig scurry past last year's record of $1bn (£640m) in retail sales.
Broker Investec expects pre-tax profit of £84.8m, giving EPS of 22.4p (from £75.2m and 20p in 2014).
| ENTERTAINMENT ONE (ETO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 330p | MARKET VALUE: | £974m | |
| TOUCH: | 329-330p | 12-MONTH HIGH: | 361p | LOW: 266p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 123p* | NET DEBT: | 86% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 470 | 11.4 | 4.5 | nil |
| 2012 | 503 | 23.1 | 8.8 | nil |
| 2013 | 629 | 5.5 | -0.5 | nil |
| 2014 (restated) | 823 | 21.5 | 7.2 | 1.0 |
| 2015 | 786 | 44.0 | 14.3 | 1.1 |
| % change | -5 | +105 | +99 | +10 |
Ex-div: 9 Jul Payment: 10 Sep *Includes intangible assets of £297m, or 101p a share | ||||
