Entertainment One reported revenue and pre-tax profit up 25% in its annual results to the end of March and said it will seek a premium listing on the London Stock Exchange.
The firm, now the biggest independent distributor in the world, also gave details of costs that resulted from store closures at HMV and Blockbuster UK: “Due to this reduction in shelf-space, the group has reduced its projected ultimate DVD and Blu-ray revenue across a number of titles, recording a one-off charge of £1.6 million to write down certain film titles to their recoverable amount. In addition, a one-off bad debt expense was recorded of £0.1 million.” Home video “performed strongly” in the UK in the year, eOne said, with 85 titles led by a larger number of theatrical releases and direct-to-DVD titles such as “House at the End of the Street”, “The Courier”, “Crossfire”, “Hooligan” and “The Walking Dead Season Two”. CEO Darren Throop said “another strong set of results” in “a very positive year” for eOne “clearly demonstrates the strength of our strategy of investing in world-class content and exploiting our distribution rights on a multi-territory, multi-platform basis”. He cited the approved acquisition of Alliance Films and the success of “Peppa Pig” in the United States. The year’s success had led to its plans for the LSE, Throop said, “Our application to transfer to the premium listing segment and intention to adopt a progressive dividend policy will enable us to drive value for our shareholders.” The film division released more than 200 titles theatrically and gross box office was up 79% to $376 million with a strong slate of films in place for the coming year, eOne said. The distributor’s biggest release of the year was the fifth “Twilight Saga” instalment, “The Twilight Saga: Breaking Dawn – Part 2”, which in the UK was the highest grossing box office release of the series. Other significant releases in the year included “The Impossible” (pictured), “Nativity 2”, “Quartet’, “The Sapphires”, “Silver Linings Playbook” and “Django Unchained”. Revenue increased by 25% to £629.1 million with profit before tax up by 25% to £49.3 million supported by increased investment in content, up 57% to £95.4 million. Proforma revenue increased by 4% in the year to £721.2 million due primarily to continued growth in the UK and a strong performance in Australia, eOne said. This drove an increase in pro forma underlying EBITDA of 7% to £64.5 million (2012: £60.4 million). Pro forma investment in content was £139.0 million (2012: £136.6 million). The firm said it plans to release more than 250 films theatrically during the next financial year, including “The Hunger Games: Catching Fire”, “RED 2”, “Now You See Me”, and “Ender’s Game”. It said it expected investment in content to increase to more than £175 million in the new financial year. In addition to multi-territory titles, UK releases will include thriller “Prisoners” starring Hugh Jackman, Jake Gyllenhaal and Melissa Leo; Steven Soderbergh’s Liberace biopic “Behind the Candelabra” starring Matt Damon and Michael Douglas; animated comedy “Free Birds” with the voices of Owen Wilson and Woody Harrelson; and Steve McQueen’s latest drama “Twelve Years a Slave” starring Michael Fassbender, Brad Pitt and Chiwetel Ejiofor. In addition to theatrically released titles, DVD releases will include the third season of hit TV series “The Walking Dead”, “Sweet Vengeance”, “The Rise” and “Frankenstein’s Army”. The television division delivered 295 half hours of television programming compared to 237 in in the year earlier with a strong pipeline of new network orders and renewals already commissioned. “Peppa Pig”, which remains the UK’s No. 1 pre-school property, had a successful nationwide licensing and merchandising launch in the US and continues to expand internationally, the firm said. In the UK, eOne released 29 feature films in the year, up from 11 the year before, and said titles such as “The Impossible”, “Nativity 2”, “Song For Marion” and “Side Effects” helped box office revenues. Broadcaster sales increased with Channel 4 and BBC package deals including titles such as “The King’s Speech” and “The Fighter”, eOne said, and digital continued to be significant with Lovefilm the major contributor supported by sales to Netflix following the Alliance deal. Digital sales increased 36% year-on-year to £90 million. The Family business had another year of strong licensing and merchandising sales, eOne said, with revenue overall up 7% as licensing and merchandising revenues increased driven by international deals for “Peppa Pig” in Spain, Italy and Australia, offset by slightly lower revenues in the UK due to the timing of licensee renewals. Home video and digital sales “performed well” and increased year-on-year due to strong sales in Australia and Italy, the firm said. “Ben & Holly’s Little Kingdom” progressed well in the UK despite strong competition, eOne said, and the delivery of season two and continued strong support of free-to-air television were expected to stimulate licensee demand in the forthcoming year. – By Ray Bennett