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 acquisition agreement with Hasbro, for 560p per share cash, is to be put to share-holders on 17 October, with the circular now available. Approval requires two-thirds of votes cast to be in favour. Our forecasts are withdrawn.
Peppa Pig continues to increase its traction across different media and territories. Good progress is being made in China, where 117 new episodes are set to air by 2023. New toy products are being launched with partner Alpha and licensed products across other categories, such as food and beverage, publishing, furniture and kitchenware are scheduled to roll out over the year. Visitor attractions based on the property are attracting increasing numbers. PJ Masks has been building its presence in key markets ahead of the important retail season. Ricky Zoom has launched successfully in China, with roll out in other key markets imminent.
There is no quantification of the decline in FTM revenues, described as ‘slight’ and stemming from timing and mix in Film and TV. Music is growing very strongly, adding in new revenue streams from publishing and artist management, live touring and music creation for Film and TV (a key benefit from being within eOne). The library revaluation of $2.1bn would have been $0.1bn higher at last year’s exchange rates. This equates to c 75% of the current group market valuation.