- Entertainment One swung to first-half loss on Tuesday following an impairment charge owing to 'significant' challenges in the group's home entertainment markets.

The company recorded a one-off charge of £57.0m as it took measures to deal with a challenges in its home entertainment market owing following an 'unprecedented' pace of change in consumer behaviour within the content industry.

For the six months to the end of 30 September, the company reported a pre-tax loss of £40.1m compared with a profit of £2.3m a year earlier, while revenue fell modestly to £404.9m from £412m.

Positive growth in Family & Brands was offset by a decline in Film & Television which the company blamed on fewer film releases and deliveries and the accelerated decline of the home entertainment market.

The family & Brands division was expected to generate strong revenue and underlying earnings (EBITDA) growth across the portfolio in FY19, driven by strong performance of Peppa Pig across core markets, with Asia touted as a key region of growth for the second half.

'In anticipation of the 15th anniversary of Peppa Pig and the Chinese New Year for the Year of the Pig, the Family & Brands business has planned an exciting calendar of events and has partnered with Alibaba for a Peppa Pig Chinese feature film which will launch in cinemas in early 2019,' the company said. Peppa Pig and PJ Masks would continue to drive the growth of eOne's Family & Brands Division in the second half of the financial year, with almost 1,900 live licensing and merchandising contracts expected by the end of 2019, the company said. The second half of the financial year is anticipated to be strong for Film & Television, with underlying earnings (EBITDA) more skewed to the second half, as expected, Entertainment One said. The integration of the Film and Television divisions was on track to generate £13-15 million of annualised cost savings by the end of FY20, as previously guided, with approximately half of these savings expected to be realised through FY19, it added.

'Looking ahead, we anticipate further progress for the Family & Brands properties in China and around the globe, a number of initiatives for Peppa Pig will consolidate its position as one of the leading pre-school brands in the world, as well as the wider merchandising phase for PJ Masks in China,' said Darren Throop, Chief Executive Officer.

'The Film & Television Division has 74% of the full year's expected TV programming margin already greenlit or committed. There is also a full pipeline of development projects across Film & Television which will help drive future growth. Prospects remain bright and eOne is on track to deliver FY19 financial performance in line with management expectations.'

At 8:56am: [LON:ETO] Entertainment One Group share price was -5.1p at 379.3p

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