Entertainment One Ltd (LON:ETO): An excellent performance in Television and Family and the recovery in Box Office in Film underpinned strong revenue and EBITDA growth in FY17 and the outlook for FY18 remains positive. The efforts that the group has made to move closer to the creative process in Film, and to diversify beyond Film, has greatly improved the financial and risk profile. We expect the ratings gap to peers to narrow.
Television and Family power growth, Film stable
Revenues increased 35%, 8pp ahead of our estimates with an exceptional performance from Television (+85%) and Family (+33%) and the Sierra acquisition supporting the Film division’s overall growth (+7%). Currency and acquisitions contributed 15% and 6%, respectively. EBITDA growth of 24% lagged revenue growth due to mix effects, but was broadly in line with our forecast as was adjusted EPS at 20.0p. Net debt increased slightly to £187.5m (1.2x EBITDA) and a dividend of 1.3p has been proposed.
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