Entertainment Rights Plans Cost Cuts

LONDON, October 31: In the wake of a pre-tax loss of £105 million for the first eight months of the year, on revenues of £20.3 million, Entertainment Rights has announced plans for cost-cutting and disposing of select "non-core" assets.

The kids’ programming giant attributed the loss to an asset impairment charge of ?83 million. It announced several initiatives to lower its debt, including a move to save at least ?5 million by year-end, as well as an asset sale. The company has not identified what "non-core" assets will be on the auction block, but they will include select music publishing rights. ER also named a new CFO, Edward Knighton.

"The period under review has been one of considerable disruption to our financial results and represents something of a watershed for the company," said ER’s chairman, Rod Bransgrove. "A number of issues have emerged from our detailed review of the business, which we commenced last year and which has been led by our recently-appointed chief executive since March 2008, and these have conspired to present a worse picture than had previously been envisaged. Having initiated this wholesale review of the company’s operations I am personally committed to see the business through to a period of stability. I will use my longstanding industry knowledge and relationships to secure the best outcome for all stakeholders. I anticipate this exercise should be complete by the company’s year end and I intend to stand down as chairman at that point to allow others to drive the future success of the business."

Nick Phillips, the company’s chief executive, added: "Our licensing business is trading strongly and we are continuing to hold promising discussions with broadcasters on future commissions, and this is a good indication that Entertainment Rights’ underlying business is in good health. Our forecasts of retail activity have taken a conservative approach to Christmas trading in light of the wider economic conditions and the resultant impact on consumer confidence. I, together with my entire team, am making every effort to see that the business is placed firmly on track for long-term profitable growth."

—By Mansha Daswani