Profits dented by Alliance takeover bid
Entertainment One reported sales up 8% to £220.5 million ($350 million) for the six months to Sept. 30 but pre-tax profits were down 90% to $1.59 million due in part to the cost of its $230 million takeover bid for Alliance Films.
The company said that the Alliance acquisition is on track to close early in 2013, subject to approval by the Canadian Competition Bureau. Financing of the deal was completed in October, with an equity placing that raised $175 million in cash.
EOne’s box office takings in Canada, the U.S., the U.K., Benelux and Australia rose 46% in the six months. Hit titles included “Looper” and “The Sweeney” in the U.K. and “The Sapphires” in Australia.
But with the number of films released up to 89 vs. 74 in the same period of 2011, prints and advertising costs increased 30% to $50 million, resulting in a 68% drop in earnings.
Profits were also dented by the phasing of revenues from eOne U.K.’s subscription video-on-demand deal with Amazon’s Lovefilm, which was weighted more heavily toward the first half in 2011. Digital sales in the film business were up 40%, excluding the Lovefilm deal.
On the TV side, eOne delivered 138 hours of new programming, up 89%, including new seasons of “Saving Hope,” “Hell on Wheels” and “Haven.” Sales were up 70% to $93.8 million, with earnings up 39% to $15.2 million.
The annual independent valuation of eOne’s film, TV and music library increased 10% to $385 million.