It has been a transformational year for Entertainment One (ETO), the company behind Peppa Pig. An exclusive deal with Steven Spielberg's Dreamworks, and January's acquisition of rival Alliance Films, establishes the group as the world's largest independent film distributor. Strip-out almost £27m of one-off costs, mostly acquisition-related, and pre-tax profit jumped 25 per cent to £53.8m. Annual savings of C$20m (£13m) have been found already from the Alliance deal and entry to the FTSE 250 beckons if a planned switch to a primary listing goes ahead.
Further substantial savings from Alliance are expected, too, and a maiden dividend is pencilled in for 2014. The group can afford it. At the core film division, pro forma revenue, which irons out the contribution from Alliance, grew 4 per cent to £721m - generating £64.5m of underlying cash profit, up 7 per cent. Over 250 movies are slated for release this financial year, including Dreamworks' WikiLeaks film, 'The Fifth Estate'. Television production revenue jumped over a fifth and, despite declining music sales, the television division grew profits 2 per cent to £17.6m. Of course, Peppa Pig is a big earner and ratings in the US have rocketed. Sales of toys have, too, and roll-out in Wal-Mart looks likely next year.
Broker N+1 Singer expects adjusted pre-tax profit of £74.3m for 2014, giving adjusted EPS of 19.5p (from 15.9p in 2013).
ENTERTAINMENT ONE (ETO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 196p | MARKET VALUE: | £536m | |
| TOUCH: | 195-198p | 12-MONTH HIGH: | 201p | LOW: 129p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE | 121p* | NET DEBT: | 44% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 343 | -31.0 | -23.2 | nil |
| 2010 | 419 | 8.00 | 5.10 | nil |
| 2011 | 470 | 11.4 | 4.50 | nil |
| 2012 | 503 | 23.1 | 8.80 | nil |
| 2013 | 629 | 5.50 | -0.50 | nil |
| % change | +25 | -76 | - | - |
*Includes intangible assets of £349m, or 128p a share | ||||
