Entertainment One has posted a £43.9m quarterly loss just days before Hasbro puts its multi-billion acquisition of the company to a shareholder vote.
The Q1 financials reveal a seven pre cent drop in year-on-year revenue to £173.1m. Losses in the three months to 30 June grew six-fold compared with the £6.8m posted in the same period in 2018.
The company blames the “lower performance” on mounting debt and its acquisition of Audio Network, a stock music catalogue for the TV, film and advertising industry which cost £178m. Fewer scripted programmes also affected sales, the company said, though Keanu Reeves-fronted murder romp John Wick 3 helped boost film revenues.
Crucially though, Peppa Pig, the jewel in eOne’s pre-school crown, has “maintained momentum” in its key markets, and PJ Masks, fully launched in major global markets, is performing well in the US and China.
Share value dipped yesterday in light of the performance, but the company is still head and shoulders above its valuation before Hasbro’s approach was announced in mid-August. Before Hasbro’s involvement, eOne shares were worth less than 400p, but closed out yesterday at 562p and continue to rebound today, 11 October.
Next Thursday, Hasbro will put its £3.3bn acquisition of eOne to a shareholder vote. Positive news on the pre-school front will play well with investors, but younger kids aren’t the only audience Hasbro is hoping to target through the purchase.
Claire Gilchrist, Vice President, Hasbro Consumer Products, told LTW.MEDIA last week that the pick-up would play a big role in its transformation from a toy company to an organisation built around broader “play and entertainment” brands, experiences and products.
“The potential that the pending eOne acquisition brings to that goal is tremendous,” she said.