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Family growth at eOne can’t offset film declines

The company reported US$1.19 billion in revenue for fiscal 2018, with declines on the film side cancelling out growth by kids brands Peppa Pig and PJ Masks.
May 21, 2019

Entertainment One’s full-year revenue fell 9% to US$1.19 billion, as continued growth in its family and brands business was offset by reduced revenue on the film side.

eOne’s family and brands revenue increased 28% to US$202 million, driven by strong performances from Peppa Pig and PJ Masks (pictured). Revenue for Peppa Pig was up 20% to US$114.9 million, due to a lift in broadcasting and licensing deals (up 144% to US$38.8 million), and retail sales grew 6% to US$2.5 billion. PJ Masks revenue was up 39% to US$75.8 million for the year.

eOne noted that a number of other family shows will launch next year. Ricky Zoom is set to make its broadcast debut on China’s Youku platform in summer 2019 before rolling out globally in the fall and winter. The property will be supported by a consumer products launch in spring/summer 2020. Additionally, family-oriented series Alien TV and Ninja Express are currently in production. The company also plans to open two Peppa Pig World of Play centers, in Shanghai and Dallas, in the second half of the year.

In the company’s film, TV and music division, which is reported collectively, revenue was down 13% to $1 billion. It’s worth noting that eOne’s investment in acquired film content dropped to US$91.8 million, which the company said is in line with its strategy to shift investment from acquisition to production. On the TV side, eOne’s investment in acquired content climbed to US$55.4 million, up from US$45.4 million a year ago.

Meanwhile, revenue derived from theatrical film releases was up 7% to US$77.6 million. The hike comes as eOne transitions to focus on releasing fewer films annually. The company reduced its film slate to 57 titles in fiscal 2019, down from 85 in 2018, while the average box-office revenue per title increased by 56%. Strong performers on the film slate included Green Book, which grossed more than US$300 million internationally. In territories where eOne handles theatrical distribution, the film grossed around US$60 million, according to the company.

Underlying EBITDA for the fiscal year was up 21% to US$251.8 million, while adjusted before-tax profit dropped 43% to $80.8 million.

Over the past two years eOne has been integrating its film and TV units. The company said that process is now complete, and is expected to yield annual savings of up to $US$19 million by the end of 2020.

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