eOne ‘on track’ despite share plunge

Entertainment One has issued a statement saying it is on track to deliver its full-year financial targets in the wake of a sharp fall in its share price yesterday.

The UK-listed company has recently issued new bonds as part of a refinancing, and in a statement to the London Stock Exchange said that process has afforded it greater operational flexibility.

It said the £285 million (US$430 million) deal “provides the company with a long term capital structure appropriate for its strategic ambitions”.

“In addition, the refinancing permits greater flexibility by relieving constraints and costs the company historically suffered when undertaking acquisitions and other corporate activity, and allows the company to react swiftly to commercial opportunities”.

The market, however, reacted badly to the news with eOne shares falling over 20% yesterday, before rallying slightly.

Company CEO Darren Throop (pictured), who yesterday bought eOne shares taking his holding to 2.3%, has repeatedly stated that he wants to double the size of the production and distribution firm through a combination of organic growth and acquisitions. This morning the company said that target remains in place and achievable.

“The company continues to have confidence in its target of doubling the size of the business by 2020, with strong organic growth and carefully targeted acquisitions,” eOne said.

In TV eOne is best known for distributing The Walking Dead and for its smash hit kids series Peppa Pig.

Analysts said that eOne’s debt refinancing looked expensive, but made sense in the current financial climate.