Profits plummet at Peppa Pig owner Entertainment One
The owner of children's cartoon character Peppa Pig saw half-year profits tumble after investing in films, but is hoping for Christmas hits from upcoming movies including Bad Santa 2.
Entertainment One saw shares fall as much as 13% after it revealed pre-tax profits crashed 80% to £3.7 million in the six months to September 30.
On an underlying basis, profits fell 40% to £23.8 million.
Its results come just months after Entertainment One fended off a £1 billion takeover attempt by broadcasting giant ITV.
Entertainment One said it counted the cost of investment in films over the first half - such as Steven Spielberg's version of Roald Dahl's The BFG and Bad Moms.
It revealed that full-year spending on film content would reach around £160 million, with some 180 movies set to be released over the full year.
Chief executive Darren Throop said the investment was expected to pay off in the second half, with a line-up including current sci-fi hit Arrival starring Amy Adams, Bad Santa 2 with Billy Bob Thornton and Office Christmas Party.
He said: "The group's strategy to invest in content continues to bear fruit and the entertainment market's focus on quality content plays to Entertainment One's strengths, ensuring that the group is ideally positioned for the future.
"Whilst theatrical investment has impacted profitability in the period, we will see the financial benefits of this investment delivered in the second half of the financial year."
The investment in films offset a 19% rise in revenues to £401 million for the first half, thanks in part to the unstoppable success of its Peppa Pig show.
It said the cartoon pig has now become the best-selling toy for pre-school girls in America and is also taking China by storm.
Peppa Pig helped its family division see revenues rise 16% to £37.9 million and earnings lift 13% to £24.7 million.