BENGALURU: The Entertainment One Limited Group (Entertainment One, the Group) reported 4.5 percent decline in reported revenue in FY-2015 (year ended March 31, 2015, current year) at Ł 785.8 million as compared to the Ł 823 million in FY-2014 (previous year). Lowering of revenue was driven by lower revenues in the Film Division, partly offset by strong revenue growth, up 36.7 percent, in the Television Division. However, underlying EBIDTA improved 15.6 percent to Ł 107.3 million in the current year as compared to the Ł 92.8 million last year.
Notes: Underlying EBITDA is operating profit before one-off items, ‘tax, finance costs and depreciation related to joint ventures’, share-based payment charges, depreciation and amortisation of acquired intangibles.
Further, the Group’s reported profit before tax more than doubled (up 2.05 times) in the current year to Ł 44 million as compared to the Ł 21.5 million in the previous year.
Company speak
Entertainment One Group chief executive Darren Throop said, “The Group’s model to source, select and sell has once again underpinned both a strong set of results and significant operational progress including new deals with digital platforms, the acquisition of the stake in The Mark Gordon Company and further progress internationally for Peppa Pig. During the year we set out our updated growth strategy and since its launch have made solid progress against this across each pillar.
Scale is key, fundamental to attract and partner with more of the world’s best creative talent to produce the best content for distribution across our global network, which drives an improved financial return for the Group. This, alongside our portfolio approach which mitigates against concentration risk, ensures that eOne is well positioned for the coming year and beyond.
Great content is at the heart of Entertainment One. Consumer demand for high quality content continues to grow, with a variety of digital media platforms emerging to service this demand. As these platforms enhance their offering and reach a wider global audience, we anticipate that audiences will increasingly focus on the quality of the content that they consume, gravitating towards premium television series, film and speciality genres. This market dynamic plays to Entertainment One’s strengths and supports our strategy to double the size of the Group within five years.”
Film division
The Group’s Film division reported 13.6 percent decline in reported revenue in FY-2015 at Ł 592.6 million as compared to the Ł 686 million in the previous year. Film division’s underlying EBIDTA declined slightly to Ł 73.1 million from Ł 74.1 million reported a year ago. Film division reported adjusted free cash flow declined 10.1 percent in FY-2015 to Ł 20.5 milli0n from Ł 22.8 million in the previous year.
The Group’s investment in acquired content and productions for the Film division declined 7.4 percent in FY-2015 to Ł 175.7 million from Ł 189.7 in FY-2104.
Within the Film division, Film Distribution and eOne Features are two segments.
Film Distribution comprises of Theatrical, Home Entertainment, Broadcast and Digital and Other.
Film Distribution reported revenue was down 12.7 percent to Ł 581.4 million in the current years from Ł 665.6 million in the previous year. Film Distribution underlying EBITDA was marginally higher year on year reflecting the reduction in print and advertising and other operational costs as a result of reduced theatrical activity, and increased contribution from the mix of higher margin ancillary windows
Theatrical reported revenue declined 37.6 percent to Ł 79.7 million in the current year from Ł 127.7 million in the previous year, reflecting lower box-office takings due to lower releases in FY-2015 as compared to FY-2014 (227 releases as compared to 275 release in the previous year. Key releases in the current year included The Divergent Series: Divergent, The Expendables 3, Foxcatcher, Paddington, Pompeii, Mr Turner, A Walk Among the Tombstones, The Hunger Games: Mockingjay Part1 and The Divergent Series: Insurgent.
Home Entertainment reported revenue declined 13.6 percent to Ł 246 million in FY-2015 from Ł 283.4 million in the previous year, reflecting the continuing migration from physical to digital formats and the impact of lower theatrical activity in the year says the company. 718 DVD titles were released in the current year as compared to 738 in FY-2014.
Broadcast and Digital reported revenue declined 2.6 percent to Ł 214.6 million in FY-2015 from Ł 220.4 million in FY-2014. Key broadcast/digital releases in the year included The Twilight Saga: Breaking Dawn Part 2, Looper, 12 Years A Slave, American Hustle, Trailer Park Boys, Pompeii, Silver Linings Playbook and Chronicles of Riddick: Dead Man.
eOne Features reported revenue declined 29.9 percent to Ł 20.9 million in FY-2015 as compared to the Ł 29.8 million in FY-2014. The underlying EBIDTA from this segment was down 97.2 percent to Ł 0.1 million in FY-2015 from Ł 3.5 million in the previous year, reflecting a reduced film production slate against a strong comparable period, which included the release of hit Insidious: Chapter 2. Adjusted free cash flow increased to Ł 5.2 million (2014: outflow of Ł 2.5 million).
Television Division
Television division reported 36.7 percent increase in reported revenue in FY-2015 at Ł 227.6 million as compared to the Ł 166.5 million in Fy-2014. The division’s underlying EBIDTA surged 67.7 percent to Ł 41.6million in FY-2015 as compared to the Ł 24.8 million in the previous year.
Television division segments are Production and Sales; Family and Licensing; and Music.
Production and Sales segment reported 33.5 percent growth in reported revenue to Ł 148.4 million in the current year from Ł 111.2 last year. Underlying EBIDTA increased 32.3 percent to Ł 16.4 million from Ł 12.4 in FY-2014. Investment in productions increased 17.9 percent to Ł 91.5 million in the current year from Ł 77.5 million in FY-2014.
The company says that on a pro forma basis, Production delivered 572 half hours of programming, compared to 507 half hours in the prior year. Key deliveries included deliveries of eOne’s flagship shows including season five and six of Rookie Blue, season four of Hell on Wheels, season five and six of Haven, season two of Bitten, season three of Saving Hope, as well as miniseries
The Book of Negroes. This also included 215 half hours of programming which was delivered by Paperny Entertainment and Force Four Entertainment which were acquired in the year. Programming delivered by these acquisitions included season two of Chopped and Timber Kings, season three of Border Security: Canada’s Frontline, and led to significant growth in the Group’s North American reality television business. In total, pro forma investment in productions increased 14 percent to Ł 95.9 million (2014: Ł 83.8 million).
Family and Licensing reported revenue increased 71.3 percent to Ł 60.8millin in FY-2015 from Ł 35.5 million in FY-2014. The segment continues to perform very strongly with the continued success of Peppa Pig, where the franchise generated over US$ 1 billion of retail sales in the financial year. Peppa Pig ended the year with over 600 licensing deals globally informs the Group.
Music reported revenue declined 7.2 percent to Ł 18.4 million in FY-2015 from Ł 19.8 million in FY-2014. Investment in acquired content and productions at Ł 2.5 million was unchanged as last year. The number of releases was marginally lower at 74 in 2015, versus 77 in 2014.