Entertainment One Share Discussion Threads

[csmwssk12hu] 25/8/2016 19:14

Well I got in at 233 and out at 253 earlier this week, I had feeling if itv was going to bid more they would do within two weeks, good luck to all left behind my personal opinion is these will drift lower to about 180 then either rise if things go well or fall if they don't whatever anyone says what values something is what someone else will pay for it, itv obviously decided they were not worth what the board was asking, the danger here is the board may have got it very wrong, they said they wanted north of 350p, prior to itv coming along these were sitting below £2, it's a bit like having a £200k house and someone knocking on front door and offering £236k and you saying I want £350k+, that's okay if you don't want to move, but if your in the business of making money for your shareholders maybe you should negotiate a bit more, on my watch list I had e one and e sure, if you sold your e one at 253 and switched to e sure you would have 271 now, why hang around waiting for a few percent more when you can sell and move on to the next one? Let's face it the most anyone thought itv would bid is 284 and it would have took best part of six months to get paid out I hope you get to the 284 mark if your still holding but don't forget there's no such thing as a bad profit and if you never sell you never make

[cautious7] 25/8/2016 17:19

Good recovery from 205p

Regards

LOL

[1gw] 25/8/2016 16:54

The discount rate is "calculated using the Group's published posttax weighted average cost of capital (8.3%) and a 6% overhead allocation (reflecting management's estimate of the Group's cost of managing its content library)" according to the 9th September TU.

So that WACC will change from time to time and ETO and their auditors will doubtless have conversations about it since it will also be used in the impairment tests relating to the acquisitions they have made - if you look at the 2015 AR (note 15, page 104) you can see that the WACC came down from 9.5% in 2014 to 8.3% in 2015.

I think the model is that ETO will propose what they believe to be appropriate discount rates for use in these calculations and then the auditors (and maybe the independent content valuers) will review and challenge those assumptions.

[raffles the gentleman thug] 25/8/2016 16:28

But the valuation is carried out independently, not by ETO themselves, so I don't think they have any say in discount rates etc. But it matters not for the shares are cheaper, and growing faster than anything else in the sector, and the interim results should be encouraging

[1gw] 25/8/2016 16:24

I have no idea raffles, just interested to see the number. Apart from the content library itself, the discount rate they use is clearly a key variable - and I wonder if they could argue their WACC has come down as a result of bond yield trends or has it gone up as a result of the new datapoint on debt they have from their own fundraising.

I note that last year the TU which contained the updated content valuation came out a week before they announced that CPPIB was taking Marwyn's stake. Was that coincidental or could the deal have been contingent somehow on seeing that number? And would this year's update be an important consideration for anyone thinking about formalising an approach to ETO at the moment?

[raffles the gentleman thug] 25/8/2016 16:13

Do you have an expectation on what this is going to be 1gw ? Must be getting close now to the group market cap I would have thought

[1gw] 25/8/2016 16:06

Looking back at last year, it looks like the March 2015 content valuation wasn't around for the annual report but was announced in the 9th September trading update.

So given the annual report is going out a bit later this year, I would guess it is touch and go whether they have the content valuation by the cutoff for publication. Who knows, is that one thing they're waiting for before publishing?

[raffles the gentleman thug] 25/8/2016 15:44

for all we know melody9999 ITV might have been prepared to pay more than 236p but management were playing hard ball, and arguably rightly so.


Would have thought imminently on the AGM notice 1gw, but do they deliver the content valuation then or with the half year results ?

[1gw] 25/8/2016 15:31

Back to wondering when the AGM notice and accompanying annual report (with updated content valuation?) are going to come out...

[raffles the gentleman thug] 25/8/2016 13:28

I am switching out of ITV into ETO here - ITV on 13x earnings with a studios business growing 2% organically or ETO on 10x earnings with a television business growing over 20% organically - really rather easy decision - big mistake of ITV not to pay up

[mr_spock] 25/8/2016 13:26

There has been a lot of upfront investment spend in production, and ETO have made it clear in the past that there is usually a wait of two years or more before that starts to pay off. I'm holding and hoping they deliver.

[melody9999] 25/8/2016 13:22

ITV would have paid 236p which was too low. Now we can get them at 208p. Mmmmm!

[hvs1] 25/8/2016 13:22

oh dear, isn't itv buying the sh*tty ole pig company now

cant be that desirable a purchase then, lol

shame in one way, means old throopy will carry on his binge buying debt fest.

another OAF magnet, lol

[napoleon 14th] 25/8/2016 13:18

All a bit obvious to me. ETO plainly were not interested @ 236p,
ITV pretending they were serious & wanted due diligence... what for?

ETO is cash positive & scoring successes big time. ITV can just drool over the piglets
& pine for the Mark Gordon business. Clearly not realistic, more opportunist.

I've held ETO for years & reckon the payoff will come anyway.
Sod off ITV; it's 300p+ or forget it! Why RNS what has been said?

210p without a bid? That's better.

[sphere25] 25/8/2016 13:18

I haven't finished ;-)

This is why you will be well out of the money if another bid doesn't transpire:

"It doesn't seem long ago that the company commentary on funding was that senior debt would be extinguished in the near future. Here we are with the creation of a seven-year £285m senior note. The cost of this is significantly above the debt it replaces. This refi package follows on from the rights issue that funded the additional Peppa Pig acquisition and raised an additional £60m on top. And still we expect Entertainment One to be free cash flow negative in aggregate over the next three years."

It'll be more than three years the way ETO keep it pushing things back!

Headed well under £2. I'm not even short!

Always happy to provide an alternative to those who often wear rose tinted specs.

[raffles the gentleman thug] 25/8/2016 13:08

thank you sphere25 thats all I want to hear - there was no cash burn last year !! Share you couldn't say that in plain english though. ...

Sold ITV at the highs of day and buying copious amounts of ETO from distressed sellers who will regret their actions in the coming days ...

[sphere25] 25/8/2016 13:02

Sphere25
25 Aug '16 - 13:00 - 1730 of 1730 0 0 Edit
Operating cash flow consistently exceeded by investment spend.

That's all that matters!

Price at intraday low now.

-16% is kind by Mr Market.

[sphere25] 25/8/2016 13:00

Operating cash flow consistently exceeded by investment spend.

That's all that matters!

Price at intraday low now.

-16% is kind by Mr Market.

[raffles the gentleman thug] 25/8/2016 12:44

Sphere25 ... proceeds of rights issue: £194.5m; Acquisitions (net of debt acquired): £177m, but net debt still falling by more than double the difference, or £44.1m - so I ask you again where exactly is the cash burn because free cashflow was generated last year - precisely £43.3m of it ?

[raffles the gentleman thug] 25/8/2016 12:43

Sphere25 ... proceeds of rights issue: £194.5m; Acquisitions (net of debt acquired): £177m, but net debt still falling by more than double the difference, or £44.1m - so I ask you again where exactly is the cash burn because free cashflow was generated last year - precisely £43.3m of it ?

[raffles the gentleman thug] 25/8/2016 12:36

Sphere25 ... proceeds of rights issue: £194.5m; Acquisitions (net of debt acquired): £177m, but net debt still falling by more than double the difference, or £44.1m - so I ask you again where exactly is the cash burn because free cashflow was generated last year - precisely £43.3m of it ?

[tsmith2] 25/8/2016 12:08

Tea leaves telling me - intra recovery coming up..