Entertainment One

LN: ETO

£2778.2m market cap

557p 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

The vote on the Hasbro offer (560p in cash) was passed by the requisite number of shareholders at the GM on 17 October. Certain other regulatory approvals and other customary closing conditions still need to be obtained and it is expected that the deal will close in Q419. eOne’s trading update to 23 September (ie most of H1) did not disclose figures due to the 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. Our forecasts are withdrawn.

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 28.9 5.3
2019A 941.2 197.6 160.0 25.0 22.3 6.1
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
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.

Last updated on 15/11/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) 662.2
Forecast gearing ratio (%) 88
Price performance
%
1m
3m
12m
Actual (0.5) 40.0 39.1
Relative* (1.8) 34.2 33.1
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