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Entertainment One profits as Peppa Pig and PJ Masks drive growth
Peppa Pig and new stablemate PJ Masks drove an 11% increase in annual profit for Entertainment One as family shows and merchandise made up for weakness at the company's film division.
The producer of TV shows and films' adjusted pre-tax profit for the year to the end of March rose to £177m from £160m. Revenue was little changed at £1.05bn from £1.08bn a year earlier.
As usual for eOne, as the company is known, its family and brands division was the main source of growth. The business, which produces TV shows and licenses merchandise using its characters, is home to Peppa Pig, the children's animated show that has swept the world.
Family and brands revenue rose 56% to £138.6m, leading to a 48% increase in earnings before interest, tax and other items to £82.3m. Peppa Pig revenue rose to £84.7m from £70m as retail sales linked to the character rose to $1.3bn (£960m) from $1.2bn.
The company has been looking for another source of revenue for family and brands and has pinned its hopes on PJ Masks, which features a team of junior crime fighters. Retail sales linked to the series rose to $1bn from $0.3bn, helping revenue jump to £48.8m from £13.5m.
Darren Throop, eOne's chief executive, said: "The family and brands business goes from strength to strength, ahead of our expectations. Peppa Pig continues to engage and delight children in important markets such as the UK, the US and China, where we have just started to implement our licensing programme. We also started the global roll-out of PJ Masks to consumer markets, where traction has been both immediate and strong."
Business was weaker at eOne's film division where underlying earnings fell by a third to £35.1m due to fewer films being released with a lower profile. The company is shifting the film business towards production and away from distribution to get more control of quality and content and combining it with its TV business.
The company had a setback on 14 May when 'Designated Survivor' was dropped by the US network ABC. The series was the main source of revenue growth for Mark Gordon Company, which eOne took full ownership of in January. The company is looking for a new home for the series.
Neil Wilson, chief markets analyst at Markets.com, said: "Peppa Pig is the golden goose for Entertainment One but it doesn't always do to be so reliant on a single franchise. Judging by today's FY results Peppa remains unstoppable and the further good news is that there's lots more in the stable for the firm, with PJ Masks now also doing very well. Film and TV integration remains a work in progress but should come up with a leaner operation."