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eOne plots film & TV arms merger as revenue grows

Entertainment One has posted revenues of more than £1 billion (US$1.4 billion) as it revealed plans to merge its television and film assets into a single studio operation.

eOne CEO Darren Throop

eOne CEO Darren Throop

With eOne attempting to double in size in the five years between 2015 and 2020, the firm is planning on bringing the film and TV divisions together.

This comes after the film and TV sales units merged on April 1, which eOne sees as creating a “harmonised commercial arm” that allows for more a “holistic approach to investment decisions”.

eOne’s full-year revenues to March 31, 2017, of £1.08 billion were up 34.9% year-on-year.

Earnings before interest, tax, depreciation and amortisation of £160.2 million were an increase of 24% on 2016, though a one-off item of £47.1 million and a number of other costs brought underlying EBITDA down to £37.2 million, significantly down 2016.

eOne Television posted revenues of £452.7 million, which was up a whopping 85%, while Designated Survivor prodco The Mark Gordon Company contributed £328.2 million, a 74.7% uptick. Earnings for those units were £30.9 million and £26.2 million, respectively.

The eOne Family unit that houses Peppa Pig and PJ Masks brought in £88.6 million, up 33%, on earnings of £55.6 million.

“The television and family divisions have performed extremely well this year, both with double-digit growth in sales and continuing to build momentum for the future,” eOne CEO Darren Throop said.

“Particular highlights include The Mark Gordon Company illustrating its strength in creative content production with the success of internationally acclaimed Designated Survivor, as well as the very successful rollout of the licensing programme for newcomer PJ Masks, which supported another stellar year for Peppa Pig.”

The financials also show eOne TV invested £156 million in produced and acquired content in the 2017 full year, with this set to rise to £210 million in 2018. The Mark Gordon Company invested £102 million. This is projected to drop to £80 million in 2018, though the number of half-hours it produces will rise from 56 to 75.

eOne was last year subject to a £1 billion takeover bid from UK commercial broadcaster ITV as its share price fell. However, it turned the offer down, claiming it undervalued the business, and Throop was quoted this week saying he now plans to raise more capital from Wall Street investors.

“Entertainment One has delivered a strong trading performance for the year, with very pleasing revenue growth from Television and Family, and another year of growth in underlying EBITDA,” said eOne chairman Allan Leighton.

“It is particularly noteworthy that this performance includes significant organic growth and has been delivered against a backdrop of a recovering film business after two years of market volatility. This robust set of results allows the board to increase the dividend for the year to 1.3 pence, in line with its progressive policy.”