Entertainment One Ltd (LON:ETO) (eOne) has announced that it will incur a one-off £47m exceptional charge related to the restructuring of one of its larger output deals and the accelerated restructuring of the Film division. On an underlying basis, EBITDA for FY17 is in line with previous guidance for strong growth and in line with our forecasts.
eOne will incur a one-off £47m of cash exceptional costs in the FY17 results. This is £39.5m higher than the exceptional we had forecast.
$25m stems from the renegotiation of one of its larger distribution arrangements. No details have been provided, but given eOne’s strategy to reduce its reliance on larger distribution deals to bring itself closer to the production process, we expect this to be a further step in this direction.
£27m relates to the accelerated restructuring of the Film division, which the group started in FY16, targeting £10m of savings by the end of FY18.
These measures are expected to drive improved underlying profitability and cash flow and we anticipate that more information may be provided at the time of the full year results.
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