Strong results see Entertainment One cancel sell off
Editor ©RapidTVNews | 14-02-2012
An excellent Q4 2011 has prompted film and TV content acquisition, production and distribution firm Entertainment One to cancel a proposed, and expected, sell off.
In an Interim Management Statement international, the entertainment group reported what it said was strong performance in its film business with significant growth in digital sales and substantial growth in TV revenues driven by increased investment in content.
Moreover the company reported that EBITDA margins have improved as the mix of profit is more heavily weighted to the film and TV businesses which have seen 100% year on year growth in digital revenues. This has offset the impact of a decline in physical distribution consistent, said Entertainment One, with the transition of the market towards online exploitation of content.
Television revenues, including those from its Family division, were said to be “significantly ahead of the prior year”, with 39% growth in the year to date. Standout for the quarter included the remaining episodes in the first season of epic railroad series Hell on Wheels, which became the second highest watched show ever on AMC; completion of delivery of the third season of comedy Hung; and the second season of mystery drama Haven.
In addition the first episodes of The Firm were delivered to broadcasters in December and premiered in Canada and the US in January. For the full year the business expects to deliver a similar number of half hours of production compared to the prior period, with, said the company, investment in programming “significantly ahead highlighting the increasing quality and scale of the Television production slate.”
Such performance, allied to a sense of confidence in prospects for the coming year in both the film and TV division has resulted in a review of strategic options focused on acquisitions rather than outright sale of the company. Taking stock of its economic situation following the quarterly results, a statement by Entertainment One’s board said: “[the board] has considered various proposals that have been made for all or parts of the group and has concluded that these do not adequately reflect the Company’s value. As such, the Board is no longer considering the outright sale of the business.”
However, it did add that through the continuing review of strategic options, the company, would evaluate a number of acquisition opportunities.