Interim Management Statement

Entertainment One Ltd.

Interim Management Statement

Entertainment One Ltd. presents its Interim Management Statement:

§ Group revenues for the period 1 April 2014 to 30 June 2014 were up 4% on a pro forma1 and constant currency basis

§ Full year earnings expected to be in line with management expectations

§ Strategic investment in digital agency Secret Location made on 28 May 2014

§ The Group's North American film distribution business strengthened with the acquisition of independent film and television distributor Phase 4 Films ("Phase 4") on 3 June 2014

§ Expansion of the Group's television activities with the announcement on 17 July 2014 of the acquisition of independent television producer Paperny Entertainment ("Paperny")

Overview

The Group has started the financial year in line with management expectations, with pro forma1 and constant currency revenues up 4% compared to the prior year. Earnings for the financial year are expected to be in line with management expectations.

The Group intends to release over 275 films and deliver over 300 half hours of television programming with investment in acquired content rights and productions expected to be approximately £300 million in the current financial year (2014: £271 million).

Film

Film revenues were 4% lower compared to the same period last year on a pro forma1 and constant currency basis, reflecting the impact of timing of releases and the phasing of production deliveries.

Total box office takings of US$82 million (up from US$69 million in the prior year period) were driven by 74 box office releases (compared to 68 in the prior year) including Divergent, Pompeii, Calvary, The Grand Seduction and Love Punch. There were 128 DVD releases during the period (compared to 101 in the prior year) including 12 Years a Slave, Dallas Buyers Club, I, Frankenstein, The Family and Ender's Game. The film slate for the rest of the year includes The Hunger Games: Mockingjay Part 1, Paddington, Suite Française, Insurgent, The Water Diviner, Nativity 3 and Expendables 3.

On 3 June 2014, the Group acquired Phase 4 (www.phase4films.com), an independent film and television distributor based in Toronto, for C$27.0 million. The acquisition consolidates the Group's presence in North America and brings a strong network of key digital partners through direct relationships with Comcast, AT&T, DirecTV, Walmart, Costco and other top-tier retailers in these markets. The Group's enlarged North American film business is now well positioned to continue to benefit from the digital migration across film and television distribution.

1. Pro forma includes the results of Phase 4 Films, which was acquired on 3 June 2014, as if that business had been acquired on the first day of the comparative period.

Television

Television revenues were up 67% on a constant currency basis over the comparative period, driven by the delivery of 37 half hours of content (compared to 26 in the prior year) and strong licensing revenues from Family.

In Television Production & Sales there is a strong pipeline of programming, including the new series Book of Negroes and Worst Thing I Ever Did. Season renewals included Rookie Blue (season six), Haven (seasons five and six), Hell on Wheels (season four) and Saving Hope (season three). In the Group's international television sales operation, AMC Networks' shows Turn and The Red Road have both been renewed for season two, with Matador from the El Rey Network also commissioned for a second season. AMC has also commissioned a new martial arts series, Badlands, which will also be distributed through the Group's international television sales team.

On 17 July 2014, the Group announced the acquisition of Paperny (www.papernyfilms.com), a Vancouver-based high-quality factual television production business, for C$29.2 million. The acquisition will enable the Television Division to further expand its unscripted and factual portfolio as well as being able to offer broadcasters highly sought-after factual programming through its international television sales infrastructure. Paperny has produced over 500 hours of television content since its inception in 1994 and is expected to deliver 80 hours of original programming this year.

Peppa Pig continues to build internationally, with five new US licensing partners announced in the soft goods category (bedding, towels, beanbags and cushions) in June 2014 and better than expected sales of the Peppa Pig: My Birthday Party DVD. In Latin America, a range of products including toys and books are launching in Mexico, Brazil, Columbia, Argentina and Chile this summer with very high demand from retail and consumers. The licensing programme for Ben and Holly's Little Kingdom is also gaining momentum with roll-out plans for toys, apparel and publishing now in place in Italy, Spain, Australia and the UK for autumn 2014. Retail and licensing deals were also completed for the Group's Skelanimals and So So Happy lifestyle brands following a successful licensing trade show in Las Vegas.

Family also opened an office in Melbourne, Australia in April 2014, further expanding its global presence across North America, Europe, the Pacific Rim and Australasia. International revenues now account for more than 50% of the revenues for Family.

Financing

Net debt at 30 June 2014 was higher than the corresponding point in the prior year, primarily as a result of increased investment in acquired content rights and productions, as well as additional drawing of existing facilities to finance the Group's recent acquisitions.  

Corporate Development

During the period, the Group made a strategic investment in Toronto-based interactive digital agency Secret Location (www.thesecretlocation.com). This will support the expansion of the Secret Location business and the development of original interactive properties for the Group and Secret Location's many clients. Secret Location's innovative digital media skills will help drive new opportunities across the Group's international broadcast partners, complementing its productions and third-party content acquisitions.

On 20 May 2014, the Company announced a maiden dividend of 1.0 pence per common share, to be paid to shareholders on 9 September 2014.

The Company's Annual General Meeting will be held on 11 September 2014. Further details will be provided to shareholders in due course.

J.P. Morgan Securities plc is acting as joint corporate broker to the Company and no one else and will not be responsible to any other person for providing the protections afforded to clients of J.P. Morgan in connection with any matter referred to herein.

Notes to Editors:

About Entertainment One

Entertainment One Ltd. (LSE:ETO) is a leading international entertainment company that specialises in the acquisition, production and distribution of film and television content. The Company's comprehensive network extends around the globe including Canada, the US, the UK, Ireland, Spain, Benelux, France, Germany, Scandinavia, Australia, New Zealand, South Africa and South Korea.

The Company provides extensive expertise in film distribution, television and music production, family programming and merchandising and licensing. Its current rights library is exploited across all media formats and includes more than 35,000 film and television titles, 2,800 hours of television programming and 45,000 music tracks.

Further information is available at www.entertainmentone.comor email Redleaf Polhill at [email protected].