Entertainment One Swings to First-Half Profit
TORONTO - Film and TV sales has lifted Entertainment One to a first-half pre-tax profit as the Canadian producer eyes a possible auction of the business.
Toronto-based Entertainment One, which trades on the London Stock Exchange, on Monday posted an interim profit of $15.9 million, against a pre-tax loss of $2.4 million in 2010, as overall revenue rose 1% to $331 million.
The producer of TV shows like ABC’s Rookie Blue and HBO’s Hung, and the Canadian and UK distributor of the Twilight movie franchise, returned to profit despite its North American physical home entertainment wholesaling business remaining a drag on its bottom line.
Entertainment One posted an adjusted pre-tax profit of $30.5 million, compared to a year-earlier adjusted pre-tax profit of $8.5 million.
The Canadian producers’ entertainment division, which includes film and TV production and distribution, saw revenue increase 9% to $227 million.
Revenue was up 6% in the UK, where Entertainment One owns the lucrative Peppa Pig TV property, due largely to digital sales.
Canadian film distribution revenue was down 6% as Entertainment One delivered 27 titles theatrically, including Source Code and The Lincoln Lawyer in the first half to September 30, against 32 titles released in the same period of 2010.
The year-earlier period included the release of The Twilight Saga: Eclipse.
The US film distribution business also saw revenues fall amid the liquidation of Borders and lower sales to Blockbuster after an entry into bankruptcy protection and subsequent store closures.
On the TV side, revenue rose 26.5% to $56.5 million, as Canadian TV production levels rose sharply during the first half with pipeline series like Rookie Blue, Haven, Hung, Party Mamas and Hell on Wheels.
On the North American distribution front, Entertainment One continues to feel the impact of the industry-wide DVD slump.
Overall distribution revenue slid 13.4% to $142.2 million.
In Canada, where Entertainment One maintains a sizable physical home entertainment wholesale business, revenues were down in part on fewer DVD releases of Hollywood blockbuster titles.
And in the U.S., where the Canadian company releases music and video product, the distribution business posted positive performance at Entertainment One’s music label.
The latest results from Entertainment One follows the company this summer indicating it was “considering its strategic options” after receiving buyer interest.
J.P.Morgan and Credit Suisse were retained to sift through possible bids for the media rights producer and distributor.