The latest results from Peppa Pig maker Entertainment One - showing a £43m loss for the first quarter - do not "make for great viewing", says Russ Mould, investment director at AJ Bell.
He says investors in the firm "may be breathing a sigh of relief over its decision to accept a takeover approach from toymaker Hasbro in
takeover was always likely to be approved, today’s update will sharpen
shareholders minds with many likely feeling a bid came just in time.
“And the hope
now must be that there are no issues over the regulatory approval of the
Peppa Pig losses
US toy maker Hasbro is in the process of buying Peppa Pig owner Entertainment One, which has just issued its first quarter results.
It has reported a loss before tax of £43.9m, compared with £6.8m a year ago.
The its annual general and special meeting to vote on the deal will take place on Thursday.
Rival bid for Peppa Pig?
Hasbro's offer for Peppa Pig owner Entertainment One is a "logical tie-up", according to Russ Mould, investment director at AJ Bell.
the master of a milking a brand to sell all types of merchandise and so it is
the perfect owner of Entertainment One which boasts an ever-increasing
portfolio of popular children’s brands seen on the screen and on the shelves."
question you should now be asking is whether someone else will make a bid for
Entertainment now it is in play. The shares were trading at 571p at the market
open versus Hasbro’s 560p bid, which implies the market is confident about a
wouldn’t be surprising to see Amazon or Netflix want to throw their hat in the
ring given how Entertainment One has such a big library of content which they
need in order to keep customers loyal to their streaming platforms.
more logical would be a counterbid from Disney given it is part owner of the PJ
Masks brand alongside Entertainment One. The imminent launch of Disney’s new
streaming service would be an ideal time to lock in a host of new characters
like Peppa Pig.”
The FTSE 250 also had a positive start to the day, opening 48 points higher at 19,121.
Entertainment One, the production company behind Peppa Pig, was trading 15% higher after it said its president Mark Gordon - a familiar face on the red carpet - would continue to work with the firm, despite a report that said he was leaving his role.
Go-Ahead was also doing well with shares up almost 10% after it increased its expectations for full year results in its bus business.
Shares in Entertainment One are up around 5% after it said its "financial performance of the business is in line with management expectations for the year".
The performance of iconic cartoon character Peppa Pig helped.
"As we continue to focus on unlocking the power and value of creativity, Entertainment One has delivered a solid performance for the year, driven by strong momentum in television, continued growth in family and brands and with the restructuring of film having a beneficial impact on the slate and margins," it adds.
Peppa Pig continued its strong performance in markets around the world, generating multiple revenues outside its licensing and merchandising businesses, it says.
"The production of 117 new episodes is well under way, bringing the total number of available episodes to 381."
The new episodes will be aired by broadcasters from spring 2019 until 2023.
Alongside this, Merlin Entertainments opened two Peppa Pig World of Playcentres during the period, in Shanghai and Dallas, with a further four expected to be opened during the next twelve months, two in China and two in the US.
"These developments will further energise brand awareness and reinforce Peppa Pig's status as an 'evergreen' property. In China, revenues have increased by 50% driven predominately by Peppa Pig."
Another fine mess? Not for Entertainment One
Entertainment One is banking on strong performances from its film division with blockbusters such as Stan & Ollie comping up.
The company said pre-tax adjusted profit for the six months to the end of September rose 7% to £42m.
It said revenue was broadly stable at £405m and it promised "a number of initiatives for Peppa Pig".
Chairman Allan Leighton said: "The Group continues to be optimistic amidst ongoing evolution in the industry".