TIDMETO
RNS Number : 7144J
Entertainment One Ltd
04 April 2018
Date: 4 April 2018
On behalf Entertainment One Ltd. ('the Company',
of: or 'the Group', or 'eOne')
Embargoed 0700hrs
until:
Entertainment One Ltd.
Trading Update
Entertainment One Ltd. provides the following trading update on
the Group's performance for the year ended 31 March 2018.
Highlights
-- Strong underlying EBITDA performance: continued
momentum in Family and Television, with an
improved second half performance in Film and
realised cost savings
-- Integration of the Film and Television Divisions
progressing well, with the appointment of Mark
Gordon as Chief Content Officer following the
acquisition of the remaining stake in The Mark
Gordon Company
-- Year-end adjusted net debt is anticipated to
be under 2.0x underlying EBITDA, following
the acquisition of the remaining stake in The
Mark Gordon Company
-- Performance for the year has been in line with
management expectations, consistent with trends
highlighted in the Interim Results
Operating Performance
Family momentum remains strong across key brands
The strong performance over the first six months of the
financial year has continued into the second half. Reported
revenues for the full year are anticipated to be around 50% higher
than the prior year, with a similar trend in underlying EBITDA.
Across Family & Brands there are now over 1,500 live licensing
and merchandising contracts globally (2017: almost 1,100).
Peppa Pig continues to perform well in mature markets such as
the UK and Australia, with significant demand for licensed products
in China driving further growth in the period. This has been
supported by nationwide broadcast on the CCTV network and through
more than 45 billion views on Chinese video on demand (VOD)
platforms and over 50 licensing partners now supporting the growth.
In the US, expansion of the team and a continued investment in
marketing continues to build the brand. In Japan, Peppa Pig debuted
on TV Tokyo in October 2017, with a consumer product rollout to
follow during 2018.
PJ Masks awareness and performance remain very strong on
television and streaming services. Season two started airing on
Disney Junior US in January 2018 to strong ratings and season three
has been greenlit in the period, supporting further growth for
FY19. The global consumer products rollout for the brand has
continued successfully during the year, and is tracking ahead of
expectations, driven by a strong toy line offering. Products were
first launched in September 2016 in the US and continue to generate
strong retail sales in the territory. In China, PJ Masks launched
on three major VOD platforms (Tencent, iQiyi and Youku Tudou) in
the period and a consumer product rollout is planned for FY19.
The Group has seen continued demand for its Family content from
VOD platforms, with several premium deals being closed in the year
covering key territories including the US, the UK and China.
Two new shows, Cupcake and Dino: General Services and Ricky
Zoom, will make their broadcast debuts in FY19 and a new comedy
series was greenlit in the period.
The second half saw the retail landscape affected by Toys R Us
store closures in the US and UK. The Group expects there to be some
impact for its brands in the short term and is monitoring the
situation closely with its partners; this impact is not anticipated
to be significant. Overall, eOne's brands performed well in Q4 2017
with strong sell-through outside of Toys R Us stores.
Another good year in Television
Television has had another good year with revenue growth across
the business. Underlying EBITDA also grew, driven by a strong
delivery pipeline of eOne original television series. It is
currently anticipated that eOne's Television Division will deliver
around 850 half hours of produced/acquired content for the full
year.
eOne's scripted business delivered first seasons of new legal
drama series Burden of Truth, police show The Detail and comedy
Let's Get Physical. Returning shows delivered in the second half
included second seasons of Ice, Ransom and Mary Kills People,
second and third seasons of detective show Cardinal and the third
season of comedy You Me Her.
The US unscripted business performed extremely well with
delivery of Ex On The Beach to MTV, additional episodes of new hit
show Siesta Keys and new seasons of franchises Naked and Afraid and
Growing Up Hip Hop. Renegade 83 also produced and delivered the
two-part docu-series Aaron Hernandez Uncovered on the former NFL
New England Patriots star to the Oxygen Network.
The Mark Gordon Company ('MGC') generated continued revenue
growth during the financial year and the studio continues to
benefit from its library of television and film titles, with their
relatively high margins, favourably contributing to both underlying
EBITDA and cash flow generation.
In MGC's television business, revenue was primarily driven by
Designated Survivor (currently in season two with an order of 22
episodes). During the period, MGC had five series airing on both US
network and premium cable, all with continued strong viewership,
including season twelve of Criminal Minds (renewed for season
thirteen), season two of Criminal Minds: Beyond Borders, season
five of Ray Donovan (renewed for season six), season two of
Quantico (renewed for season three) and season thirteen of Grey's
Anatomy (renewed for season fourteen) becoming the longest running
scripted prime-time show currently airing on the ABC network. Also,
the period saw a straight-to-series order by ABC of the Grey's
Anatomy spinoff, Station 19, which premiered on 22 March 2018.
In addition to its existing TV programmes, MGC has numerous new
television projects in production, including a new teen dramedy
Youth & Consequences partnering with YouTube Red (premiered 7
March 2018). And MGC is currently in production, with a
straight-to-series order from ABC, on The Rookie starring and
executive-produced by Nathan Fillion, who formerly starred in
Castle, which aired eight seasons on ABC - this project will be
similar to Designated Survivor where eOne will handle all
international distribution rights outside the US.
MGC also completed its first feature film Molly's Game which was
distributed internationally by eOne across its territories and sold
around the world by Sierra Pictures. Film titles in various stages
of development and production include The Nutcracker and the Four
Realms, Official Secrets and The Killer.
Music continued to grow its underlying EBITDA performance as a
result of improved margins following the transition from physical
to digital. In its Publishing and Music Supervision operations, the
business continued to work in partnership with eOne television and
film projects, including MAKEREADY's A Million Little Pieces, Ice
(season two), Let's Get Physical, as well as supervising the music
on the recent PJ Masks Live! tour and providing the theme song for
the upcoming Ricky Zoom series in Family.
Strategic shift in Film continues
For the financial year just completed, the Group will have
released 145 titles (2017: 172), with box office revenues down
around 37% during the year as a result of lower volume and profile
titles compared to the strong slate from the previous period. For
the year as a whole, the Group is expecting overall revenue from
its Film business to decrease as a result of both the declining
volume of films released in the period, as well as the reduced
contribution from related ancillary windows.
Against the current film market backdrop, where value is
increasingly concentrated around blockbuster content from the major
studios, the Group's Film businesses performed well during the
second half. Key titles during the period included Molly's Game,
Steven Spielberg's The Post from Amblin Partners and I, Tonya from
Sierra Pictures (all of which received Oscar nominations). Other
notable territorial box office successes included Wonder in Canada
and Spain, Finding Your Feet in the UK and Australia and BAFTA
nominated The Death of Stalin in the UK.
Looking ahead to the new financial year, the distribution
pipeline is expected to be strong. Current planned releases from
Amblin Partners include family adventure comedy The House With A
Clock In Its Walls, starring Cate Blanchett and Jack Black, On The
Basis Of Sex, a biopic of US Supreme Court Justice Ruth Bader
Ginsburg, starring Felicity Jones and Army Hammer, and Green Book,
a period drama starring Viggo Mortensen and Mahershala Ali. The
Group will also distribute two films from distribution partner
Annapurna Pictures: comedy-drama Where'd You Go Bernadette? (based
on the best-selling novel and starring Cate Blanchett and Kristen
Wiig) and Backseat, a comedy starring Christian Bale, Amy Adams and
Steve Carrell, directed by The Big Short's Adam McKay.
As highlighted in the Interim Results, the Group has continued
to reshape the Film business with realised cost savings and an
increased focus on deep creative partnerships with the industry's
highest quality film-makers, where it has more ownership and
greater control over the content. Reflecting this strategic shift
towards content production, five titles have commenced principal
photography during the period. A Million Little Pieces, starring
Aaron Taylor-Johnson, Charlie Hunnam and Billy-Bob Thornton is the
first film from the Group's MAKEREADY venture with Brad Weston.
Mary, starring recent Academy Award winner Gary Oldman, is a
low-budget supernatural thriller genre, where eOne has enjoyed
previous success with the Sinister and Insidious franchises.
Official Secrets, starring Ralph Fiennes and Keira Knightley is
directed by Gavin Hood, who also directed the eOne feature
production Eye in the Sky. New films also include Sierra/Affinity's
Haunt and Australian co-production Nekromancer. In addition to
these recent starts, the
Group expects production to continue to ramp-up as internal as
well as partner development projects enter the packaging stage.
Darren Throop, Chief Executive, commented:
"Once again, Entertainment One has delivered a robust
performance for the year with great momentum in both Television and
Family. The repositioning of the Film business is progressing on
track and we are well-placed to put a greater emphasis on a
production model supported by strong content relationships.
The recent acquisition of the remaining stake in The Mark Gordon
Company represents a major milestone for the Group, creating
financial and strategic opportunities as we bring the Film and
Television Divisions together into a single operating division.
With top-tier new talent relationship opportunities coming to eOne,
Mark Gordon's creative leadership further strengthens the Group's
position in the creative industry.
Management anticipates that the full year performance for the
Group to 31 March 2018 will be in line with its expectations."
The Group expects to announce its results for the year ended 31
March 2018 on 22 May 2018. The Group will be adopting IFRS 15 -
Revenue Recognition from 1 April 2018 and will provide further
information on the impact of this adoption when it reports its Full
Year Results.
Enquiries:
Rebecca Sanders-Hewett +44(0)20 3865
Alma PR Susie Hudson 9667
Entertainment +44(0)20 3714
One Ltd. Patrick Yau 7931
Notes to Editors:
Entertainment One Ltd. (LSE:ETO) is a global independent studio
that specialises in the development, acquisition, production,
financing, distribution and sales of entertainment content. The
Company's diversified expertise spans across film, television and
music production and sales, family programming, merchandising and
licensing, and digital content. Through its global reach and
expansive scale, powered by deep local market knowledge, the
Company delivers the best content to the world.
Entertainment One's robust network includes film and television
studio The Mark Gordon Company; content creation venture Amblin
Partners with Steven Spielberg, DreamWorks Studios, Participant
Media, and Reliance Entertainment; newly-launched MAKEREADY with
Brad Weston; leading feature film production and global sales
company Sierra Pictures; unscripted television production company
Renegade 83; world-class music labels Dualtone Music Group and Last
Gang; and award-winning digital agency Secret Location.
The Company's rights library, valued at US$1.7 billion (as at 31
March 2017), is exploited across all media formats and includes
about 80,000 hours of film and television content and approximately
40,000 music tracks.
www.entertainmentone.com
This information is provided by RNS
The company news service from the London Stock Exchange
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