Strong growth in Television and Family for Entertainment One (LON:ETO) was boosted by acquisitions and offset a weak performance in Film, as forecast. Television and Family accounted for 61% of EBITDA, have excellent pipelines and, with a stronger film slate, FY17 should see strong growth across all divisions. We see plenty of scope for the significant ratings gap vs peers to close.
Balance tilts towards higher margin segments
FY16 results hold no major surprises: revenues increased by 2.2% with strong growth from Television (+31.2%) and Family (+9.5%) offset by a weaker Film performance (-6.6%) and acquisitions contributing £22m.
EBITDA increased 20.3% on margins of 16.1%, up 2.4%, reflecting the shift in the mix of the business towards the higher margin divisions.
Content investment of £219m was lower than forecast and consequently adjusted cash conversion improved to 62%. Consolidated net debt of £299m comprised £181m of corporate debt and £118m of production finance. The dividend increased by 9% to 1.2p.
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