Headline figures only serve as a trailer for Entertainment One (ETO). Stripping out currency shifts and last year's acquisition of Alliance Films, the independent film-and-TV distributor's sales only inched up 2 per cent.
Yet underlying operating profit rose by a half to £90m. That reflects Entertainment One's strategy of acquiring exclusive content rights, then exploiting them across multiple platforms worldwide. That hasn't been cheap - last year it invested £271m in content rights and production, a 27 per cent increase. Yet the result is a content library worth an estimated $650m (£410m).
The group has been getting its money's worth: last year it released 275 movies, including Oscar winner '12 Years a Slave', and churned out 317 half-hours of TV. This frenzy of releases boosted underlying cash profits at its film and TV divisions by 19 and 44 per cent, respectively. It also signed a distribution agreement with AMC Network, which finance chief Giles Willits believes is a "game changer" that will provide a "massive boost" to international sales.
Analysts at Investec placed their forecasts under review, but "expect no material changes". They currently forecast adjusted pre-tax profits of £86m this year, giving EPS of 21.8p (£75.2m and 20.9p in fiscal 2014).
| Entertainment One (ETO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 271p | MARKET VALUE: | £784m | |
| TOUCH: | 271-272p | 12-MONTH HIGH: | 368p | LOW: 178p |
| DIVIDEND YIELD: | 0.4% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 106p* | NET DEBT: | 50% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 419 | 8.0 | 5.1 | nil |
| 2011 | 470 | 11.4 | 4.5 | nil |
| 2012 | 503 | 23.1 | 8.8 | nil |
| 2013 | 629 | 5.5 | -0.5 | nil |
| 2014 | 820 | 21.0 | 7.1 | 1 |
| % change | +30 | +282 | - | - |
Ex-div: 9 Jul Payment: 9 Sep *Includes intangible assets of £283m, or 98p a share | ||||
