Entertainment One

LN: ETO

£2844.9m market cap

571p last close

Entertainment One specialises in the development, acquisition, production, financing, distribution and sales of entertainment content. Its rights library is valued at US$2.0bn and is exploited across all media formats.

Investment summary

On 23 August, Entertainment One announced that it has agreed a bid from Hasbro, Inc. at 560p in cash, valuing the group at £3.3bn ($4.0bn). FY19 results showed strong (21%) growth in underlying EBITDA. The Family & Brands division is benefiting from the higher margins from 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%. In July, eOne reached a multi-year production agreement with Mark Gordon to develop and produce content.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 1029.0 163.6 124.2 19.3 29.6 5.4
2019A 941.2 197.6 160.0 25.0 22.8 6.3
2020E N/A N/A N/A N/A N/A N/A
2021E N/A N/A N/A N/A N/A N/A
Last updated on 16/09/2019
Industry outlook

SVOD is rapidly gaining share, growing at a reported 20% CAGR. Competition between platforms is driving the requirement for premium content and, despite the proliferation of non-linear distribution channels, there is still a tendency for the audiences to gravitate towards particular hits. This is driving a trend to high production values, with the real underlying competition to grab and maintain audience attention. eOne’s platform-agnostic stance allows it to take good advantage of the market vacillations.

Last updated on 16/09/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) 662.2
Forecast gearing ratio (%) 88
Price performance
%
1m
3m
12m
Actual 43.3 48.7 47.0
Relative* 38.5 48.0 47.4
52-week high/low 589.0p/336.4p
*% relative to local index
Key management
Darren Throop CEO
Joe Sparacio CFO
Mitzi Reaugh Non-executive director

Content on Entertainment One