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TV Gains Offsets Film Losses at Entertainment One

TV hits such as “Designated Survivor” and “Peppa Pig” are driving Entertainment One’s business as the company’s film division continues to struggle. Growth at The Mark Gordon Co. and the strong performance of kids’ shows “Peppa Pig” and “PJ Masks” bolstered eOne’s results, but revenue and profit declines in the independent studio’s film business weighed on the half-year numbers.

Overall revenues for the six months to end-September were down 1% year-on-year at £395.7 million ($523.7 million). EBITDA profit was up 36% at £51.4 million across the period. The pre-tax profit was £800,000 compared with a £2.5 million loss in the same six months last year.

The company has combined some of its film and TV sales, and the TV side continues to perform well, with notable deals in the period such as the sale of ABC series “Designated Survivor” to Netflix, which took international rights. It also had its first Emmy nomination, for “L.A. Burning: The Riots 25 Years Later.” TV revenues were up 17% at £168.5 million. Looking ahead, eOne told investors that combining film and TV sales will lead to increased revenue and profit in FY2018.

The Mark Gordon Co. makes “Designated Survivor” and is also developing movies including “Chronicles of Narnia: The Silver Chair.” It first completed feature, “Molly’s Game,” will be released at the end of the year, with eOne handling international distribution and STX Entertainment handling the U.S.

A smaller number of releases and reduced theatrical and home entertainment activity, however, led to a 29% slide in film revenues of £171.8 million. The company said it “will continue to reshape its film operations as it adapts to the changing marketplace.” It revised downward its full-year guidance for the total number of film releases through the year, from 200 to 180.

“Peppa Pig” and “PJ Masks” drove growth at the kids’ and family division. Toys and merchandise sales associated with those properties brought in $1.2 billion in retail sales in the half year. Overall revenue increased 64%, taking the total to £62.1 million.

Company CEO Darren Throop has set out to double the size of the business between 2015 and 2020. “The television business has 82% of the full year’s expected margin already committed or greenlit; the family business is underpinned by exceptional performance from ‘Peppa Pig’ and ‘PJ Masks’; and the film division continues to focus investment on new partnerships to reshape the business,” he said. “As such, the group remains on track to deliver full-year financial performance in line with management expectations.”

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