In the rapidly evolving world of film and television, content is key. That's good news for Entertainment One (ETO), whose high-quality content library was valued at $1.5bn (£1.2bn) at the start of the reported period. Although this was up more than $500m on 2015, it omits the added value that has come from a plethora of film and television launches in the year to March 2017. These new releases, added to the enduring popularity of the group's family and television franchises, sent adjusted cash profits up by a quarter.
Statutory numbers have been skewed by the group's recent consolidation and restructuring. A number of acquisitions made in the 2016 financial year added an extra £14.5m to intangible costs in these numbers. Meanwhile, the closure of physical distribution warehouses added £10.1m. Strip these out, along with other one-offs items, and pre-tax profits increased 25 per cent to £130m.
Home Entertainment continued to struggle, with revenue down 22 per cent to £149m as DVD demand faltered. But the group's partnerships with 21st Century Fox and Sony Pictures should start to galvanise a recovery here. Broker Numis thinks this will help boost adjusted pre-tax profits and EPS to £150m and 22.5p, respectively, in the year to March 2018 (up from £130m and 20p in FY2017).
ENTERTAINMENT ONE (ETO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 244.4p | MARKET VALUE: | £1.05bn | |
| TOUCH: | 244.4-244.8p | 12-MONTH HIGH / LOW: | 263p | 144p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 79 | |
| NET ASSET VALUE: | 156p* | NET DEBT: | 25% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 0.63 | 5.5 | -0.5 | nil |
| 2014 | 0.82 | 21.5 | 7.2 | 1.0 |
| 2015 | 0.79 | 44.0 | 12.7 | 1.1 |
| 2016 | 0.80 | 47.9 | 9.8 | 1.2 |
| 2017 | 1.08 | 37.2 | 3.1 | 1.3 |
| % change | +35 | -22 | -68 | +8 |
Ex-div: 6 Jul Payment: 8 Sep *Includes intangible assets of £710m, or 165p a share | ||||
