Entertainment One - Trading update and library revaluation

Entertainment One’s trading update to 23 September (ie most of H1) does not disclose figures, due to the Hasbro bid. The group is heavily weighted to H2. Family & Brands achieved flat revenues against prior period, despite a difficult trading environment. Film, TV and Music (FTM) revenues were slightly behind, with a strong music performance offset by unflattering comparatives in film and TV due to timing and mix. The independent library revaluation was $2.1bn at end March (2018: $2.0bn). The ac

Entertainment One - Mark Gordon’s content

Entertainment One (ETO) has reached a multi-year production agreement with Mark Gordon to develop and produce content. The continuing alignment of his efforts with the group’s objectives is good news and removes any residual uncertainty post last month’s press stories. We have now updated our forecasts for the bond refinancing; the reduction in forecast interest costs results in uplifts to PBT and EPS for FY20e and FY21e of 4–5%. ETO is currently trading at a discount of around 7% to peers, base

Entertainment One - Content creation and ownership

Entertainment One’s full year results showed strong growth in underlying EBITDA, +21%, broadly in line with market and our estimates. The Family & Brands division is benefiting from the higher margins from advertising and streaming video on demand (AVOD and SVOD), with underlying EBITDA up 28%. Film, TV & Music’s performance reflects the completion of the transition in film and the shift in mix toward TV, with an improvement in underlying EBITDA margin from 11.6% to 14.6%. Our revised forecasts

Entertainment One - Sounds like a good deal

Entertainment One (eOne) has announced the acquisition of Audio Network for £165m (cash-free, debt-free basis) alongside a share placing at 450p to raise c £130m. Audio Network’s business model meshes very neatly with eOne’s, adding both music resource and a substantial recurring revenue base while giving the group’s existing artists and catalogue new revenue-generating opportunities. The purchase price represents 15x LTM reported EBITDA and management indicates the deal would be earnings enhanc

Entertainment One - Good year all round

Entertainment One’s (eOne) year-end trading update indicates financial performance in line with expectations, with the groundwork in place for good progress across both Family & Brands and Film, Television & Music. The benefits of the transition towards production in film are clear, with better margin potential, a reduced risk profile and stronger free cash flow. Our EBITDA and EPS forecasts are unchanged and we have introduced numbers for FY21e, showing continuing progress. The intense competit

Entertainment One - 2019: Year of the (Peppa) Pig

Entertainment One’s interims are in line with expectations. Our FY19 and FY20 revenue forecasts are trimmed but we have lifted expected margins, leaving EBITDA and EPS broadly unchanged. This reflects the further mix shift to Family & Brands, where good momentum continues behind Peppa Pig and PJ Masks, especially in China. Film & TV is part-way through its transition from distribution to content production, with divisional EBITDA also impacted by an H2-weighted release schedule. The net effect w

Entertainment One - Library valuation uplift

Entertainment One’s (eOne’s) pre-close trading update confirms the group is trading well and is on track to meet full-year market forecasts. There is no change to our forecasts at this juncture. The group’s rights library has been independently reassessed and has increased to a value of US$2.0bn, from US$1.7bn at the time of the last valuation in March 2017. The group’s current market capitalisation is c £1.8bn (US$2.3bn). Recent strong share price performance has narrowed the discount to peers,

Entertainment One - Unlocking the value of creativity

Entertainment One’s (eOne’s) capital markets day (CMD) presentation highlighted its strong content and depth of management, with its independence allowing the luxury of platform agnosticism. With the major tech platforms building audience engagement to drive their broader business models, high-quality content remains a key differentiator that plays to eOne’s strengths. The strategy for Family & Brands is to focus on a tight portfolio, maximising merchandising and licensing opportunities. Recent

Entertainment One - On course to double EBITDA by 2020

An excellent performance from Family & Brands and strong growth in Television offset declines in Film to deliver EBITDA growth of 11%, which is in line with forecasts. The group is in good shape entering FY19 and is on track to deliver to its five-year plan to double EBITDA by 2020. The shares are on a c 40% P/E and c 20% EV/EBITDA discount to global peers and we believe they offer good value.

Entertainment One - Nothing unscripted about Whizz Kid acquisition

eOne’s bolt on acquisition of Whizz Kid in the UK further builds on its expanding capabilities in the non-scripted television production segment. The £6.9m consideration paid for a 70% interest will be part funded utilising some of the excess proceeds of the recent placing and shares.

Entertainment One - On track for full year

eOne’s FY18 trading update puts the group on track to deliver to expectations with continued excellent momentum in Family, a solid performance from Television and a better second half in Film.

Entertainment One - Takes full ownership of MGC

eOne has announced the proposed acquisition of the remaining 49% of the Mark Gordon Company (MGC) for $209m, financed with a mixture of new equity and debt. We estimate that the deal will be slightly earnings accretive in its first year before an anticipated $7-10m of cost synergies. In our view it is a logical extension of the group’s strategy to build a diversified content business.

Entertainment One - PJ Masks catching Peppa

eOne’s H118 results delivered a 36% increase in EBITDA driven by an outstanding performance in Family with Peppa Pig making its mark in China and the rapid global roll out of PJ Masks establishing it as a global brand. Management has reiterated that the company is on track to deliver full year expectations; we have updated our forecasts for mix effects but leave our overall EBITDA forecast unchanged.

- Library value up 13% and H118 trading on track

Operating performance across all Entertainment One (eOne) divisions is in line with management’s full year expectations, with the H1/H2 weighting expected to be broadly in line with last year. As the group’s business grows, so does its library valuation, which has increased by 13% y-o-y to $1.7bn, underpinning c 80% of the current EV.

Brave Bison - Growth Stampede Continues at Brave Bison

Brave Bison has released its FY23A results which are in-line with the upgraded expectations at the recent trading update. The acquisition of SocialChain has transformed The Group’s offering in the fast-growing social and influencer segment of the market leaving it well-positioned for the expected pick-up in marketing spend in 2024. Management have continued to drive operational efficiencies in The Group, for example rolling out an advanced resource planning tool, which has contributed to Adj EPS

Morning Note – 22 April 2024

LIBERUM: The Liberum Leisure Digest: NLW increase - pricing power is key

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

LBG Media (LBG LN) - Strong momentum into FY24

Resilient growth in core markets: Revenue of £67.5m is +7.5% YOY (FY22: £62.8m) and +0.7% vs. Zeus estimate of £67.0m, with growth across Direct and Indirect divisions benefitting from increased activity with new and existing clients.

S4 Capital - Extension of recovery horizon

S4 Capital had a difficult FY23, as flagged, with reduced client confidence and spend, particularly from those clients in the tech sector, and on larger transformation projects. Management is cautious in the short term, with no substantive changes likely in H124, but sees conditions likely to improve in H224 as economic pressures ease. The group’s longer-term prospects should be buoyed by its positioning across data and digital marketing and, in particular, in incorporating AI into hyper-persona

Next 15 Group PLC

While 2.5% revenue growth and 6.1% EBIT growth is relatively pedestrian by Next 15’s historic track record, we see the last year as one of the most impressive reported by Next 15. Revenue growth and margin expansion has been delivered in the face of a significant slowdown in demand from the group’s historic core technology sector clients. We believe a number of factors are in play here, not least the growing diversity of Next 15’s client and business mix as a result of M&A over the last th

LIBERUM: Time Out: Expanding the Markets pipeline

Team Internet Group - Growth and returns, acquisition bolsters outlook

Team Internet’s FY23 results exceeded our forecasts and consensus on revenue and EBITDA. Online Marketing was driven by increased consumer engagement, reflecting investment in delivering more targeted ads across a wider array of channels. The group’s latest acquisition, Shinez, strengthens Online Marketing via diversification of publishers and is earnings accretive with scope for further synergies. Online Presence returned to strong revenue growth, driven by demand for exotic domains, pricing op

Next 15 Group - Baked in AI opportunities

Next 15 Group's net revenues grew 2.5% in the year to January, despite difficult markets. Adjusted operating margin rose from 20.2% to 21.0%, helped by head office cost savings. In common with much of the sector, spending by tech clients was soft, down 17% like-for-like. The group did well, though, in growing spend from non-tech clients, up 11%, making for a strong overall performance in a market beset by ongoing macro uncertainty. Next 15 has been building its AI capabilities for some time and

STV Group+ (STVG, House Stock at 235p) - Recent news extends positive momentum

Team Internet Group (TIG LN) - Record results

Team Internet’s FY23 results confirmed another strong year of trading from its Online Marketing and Online Presence businesses. Both revenue and EBITDA growth remained in double digits, margins on net revenue continued to improve, and cash conversion remained strong. We continue to believe that the Group has substantial long-term growth opportunities including international expansion, new partner development, and vertical integration. In our view, Team Internet’s strong track record, cash genera

Brave Bison - Underlying Performance Reassuringly In-line

Brave Bison has released its interim results for the period ending June 2023. The update shows the SocialChain integration has been materially completed, with synergies mostly realised and new client wins taking place as a combined business. Gross revenue increased 15% YoY to £16.9m and net revenue increased 23% to £10m, both driven primarily by the new contribution from SocialChain. Adj EBITDA increased by 20% to £1.9m and Adj PBT increased 16% to £1.5m, both in-line with expectations. We have

Data Driven Marketing

Jaywing is a UK marketing services company with a clearly differentiated market position in data science. Core, is the delivery of behavioural insights and algorithms to enhance the roi of clients marketing and customer experience programmes and, in a highly personalised way. The acquisition of search marketing specialist Epiphany in March 2014 was strategically transformative, giving Jaywing a profitable growth platform as well as consolidating its leading position in digital data and online m

Cenkos: Brave Bison Group Plc -- The Next Link in the Chain

Brave Bison has raised £4.75m of equity capital at 2.3p, to help fund an acquisition of a complementary business, called Social Chain. The target will bring significant brand recognition and cross-selling opportunities to blue-chip clients. We forecast an increase in FY23E revenues of £12.4m to £42.9m, a £1.0m increase in Adj EBITDA to £4.1m and an 11% increase in Adj EPS from 0.22p to 0.25p. Post-acquisition, Brave Bison would trade on a discount to the peer group median across EV/Sales, EV/EBI