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Wednesday 21 August 2019

Hit shows Peppa Pig and PJ Masks push Entertainment One profits higher

Entertainment One posted a 53% hike in underlying interim pre-tax profits to £36.4 million as its TV arm offset losses in the film business.

Entertainment One
Entertainment One

By Holly Williams, Press Association Deputy City Editor

Entertainment One has posted a jump in half-year profits thanks to its popular children’s television shows as Peppa Pig takes China by storm and PJ Masks becomes a global hit.

The group posted a 53% hike in underlying pre-tax profits to £36.4 million for the six months to September 30 as its TV arm offset losses in the film business.

Its family TV business notched up a 71% hike in retail sales to $1.2 billion (£907 million), driven by Peppa Pig’s growing fan base in China, while Disney Junior’s PJ Masks cartoon saw revenue growth of more than 600%.

The group said it saw “very strong potential” for PJ Masks as the show catches up with long-time favourite Peppa Pig.

PJ Masks

Underlying earnings for the family arm rose 54% to £62.1 million, with better-than-expected sales across China, where Peppa Pig is now broadcast nationwide on the CCTV network and has gained more than 34 billion views on Chinese social media platforms since the launch of the brand in September 2015.

The group said the film release of Peppa Pig: My First Cinema Experience was also a highlight, raking in £3.6 million in box office takings in the UK, as well as another 2.2 million Australian dollars (£1.3 million) in Australia and New Zealand.

Its overall television arm – including eOne Television, The Mark Gordon Company, its music business and digital content studio – saw earnings rise 11% to £20.6 million.

But the Canada-based, UK-listed media group revealed that underlying losses at its film division widened to £2.6 million from £2.3 million a year earlier after revenues fell 29%.

It blamed this on a lack of new releases, but is hoping for a bounce back in the second half, with upcoming titles including Steven Spielberg-directed film The Post, starring Tom Hanks and Meryl Streep, and A Bad Moms Christmas.

Darren Throop, chief executive of Entertainment One, said the group’s strategy to invest in content “continues to bear fruit”.

He added the firm looked forward to an “exciting” period ahead and was on track to meet full-year expectations.

Shares in the group rose 4% after the results.

Analyst Malcolm Morgan, at Peel Hunt, said the group’s first half “belongs to PJ Masks”, which he hailed as the star performer.

Entertainment One recently took a £47 million hit from restructuring its film arm, shifting the business towards digital content and producing fewer, bigger movies.

This saw annual profits dive 22% to £37.2 million.

Entertainment One has been the subject of takeover approaches in recent years, with ITV abandoning a £1 billion pursuit of the firm last year after its initial offer was snubbed.

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