CHORION: International Brand Strategy Drives 35% Revenue Growth, Profits Up 63%

Children’s revenues up 43%, Crime revenues up 24%

NEW YORK & LONDON--()--Chorion, the global media content group, announces results, under UK GAAP, for the 15 months to 31 March 2009 including pro-rata figures for the 12 months to 31 March 2009.

Financial highlights

  • Group 12-month revenues up 35% to £53.7m (12 months to 31 March 2008: £39.9m)
    • 15-month revenues £59.2m
    • 55% of 15-month revenues from international sales
  • Children’s Divisions 12-month revenues up 43% to £33.4m (2008: £23.4m)
    • 15 months £37.1m
  • Crime division 12-month revenues up 24% to £20.3m (2008: £16.4m)
    • 15 months £22.1m
  • Group 12-month EBITDA up 63% to £14.6m (2008:£8.9m)
    • 15 months £13.6m

Brand highlights

  • Mr. Men and Little Miss revenue up 44%
    • Over 12 million Mr. Men books sold in UK, US, France and Australia in 2008
  • Noddy in Toyland, a new 52-episode show, went straight in as the no.1 pre-school show for 4 to 6 year olds in its first month on Five
  • Olivia successfully launched in US in February 2009
    • Achieved top ratings in US within two months
    • Distributed into another 122 countries, of which 119 will be on air in 2009
    • DVD retail success in US
  • Six Agatha Christie TV films delivered; new ITV output deal for a further eight films
    • Remake of Murder on the Orient Express, starring David Suchet, in production for ITV
    • Four million books sold
  • New pre-school property Octonauts successfully sold to BBC (UK), TF1 (France) and ABC (Australia)

Waheed Alli, Chorion’s Chairman commented

“Our strategy to develop and launch a new children’s property each year is showing real returns.

“Olivia was successfully launched earlier this year, achieving top ratings within months, while Mr. Men has increased revenues by 44%. Noddy has been refreshed with a new TV series and continues to be a success 60 years after it was first published.

“Equally important, we have seen notable international revenue growth against a difficult economic environment as our brands take hold in the US, as well as Europe and Australia.”

Strategic overview

Chorion’s goal is to become a significant global provider of children’s entertainment through the acquisition, origination and development of a diversified portfolio of children’s brands and characters capable of generating significant returns from television and film, as well as licensing and merchandise, particularly in the key territories of the US, Japan, UK and France.

The rationale for Chorion going private in 2006 was to provide the necessary flexibility to enable the long-term, strategic development of children’s brands, which typically take three to four years from development to launch in the international TV and merchandising markets.

The last few years have seen a transformation of the Group. This has included: the development of a broader and growing portfolio of children’s brands with international appeal; the maintenance of the strategy to launch one new property annually; the increase in long-term visibility, recurring and international revenues; and importantly the achievement of growth in the US.

Financial review

Group

The results of Chorion’s investment in brand development and international sales are evident in the Group’s financial performance.

Group revenues were £59.2m in the 15 months to 31 March 2009. For the 12 months to 31 March 2009 (on a proforma basis), revenues increased 35% to £53.7m (12 months to 31 March 2008: £39.9m).

International revenues continued to grow strongly in the 15 months to 31 March 2009, representing some 55% of total Group revenues.

On a 12-month basis EBITDA jumped by 63% to £14.6m (2008: £8.9m). On a 15-month basis EBITDA was £13.6m. The Children’s division contributed more than 74% of the Group’s profits.

Children’s division

The Children’s division was the main driver of growth and profitability, contributing 63% of revenues, or £37.1m, (15-month basis) with more than 86% coming from licensing and merchandising. On a 12-month basis, revenues were up 43% to £33.4m (2008: £23.4m).

Mr. Men saw revenue growth of 44% and accounts for 18% of Group sales; Noddy accounts for 14% and Olivia 5%. Olivia’s contribution is particularly notable, given its relatively recent launch in key territories that have yet to reach their full marketing potential.

Crime division

The Crime division contributed £22.1m, in the 15 months to 31 March 2009. On a 12-month basis, revenues were up 24% to £20.3m (2008: £16.4m), reflecting the delivery of six films in the period.

The Crime division contributes about a quarter of Group gross profits, with the majority driving from the ever-popular Agatha Christie properties such as Poirot and the new Miss Marple series on ITV.

Brand review

Children’s division

Mr. Men and Little Miss

Over the past 15 months, Chorion has significantly developed Mr. Men with a two-tier global strategy designed to preserve the essence of the original, publishing-based brands, while at the same time extending them into new categories and new territories with the support of a substantial investment in mass media.

The strong growth of Mr. Men has been led by a tremendous uplift in exposure on television – it is now on air in 70 countries – and online. This in turn has fuelled record publishing performance and further supported the brand. Strong clothing sales made Mr. Men a top selling T-shirt in the US and the UK.

Other highlights of the Mr. Men brand include:

  • More than 6.8m books sold in the UK in 2008, up 14% on 2007
  • US book sales up more than 400% in 2008 to 1.7m, France up 30% to 1.6m, Australia up 20% to 1.8m
  • Global internet strategy rolled out; 1.5m monthly page views in the UK and localised versions of the site have now launched in the USA, UK, France, Australia, and Japan.

With these building blocks in place, and the soon to be launched marketing campaigns by key partners, the brand will have a very substantial retail presence world-wide.

Noddy
Chorion has invested in new content to refresh and support an ever-popular character whose TV presence was enhanced with a new 52-episode animated show, Noddy in Toyland, which went straight in as the no.1 pre-school show for four to six year olds in its first month on Five.

This new content has allowed Chorion to focus on a new marketing campaign, with a wider range of consumer products and merchandising on sale in several key retail outlets in the UK, France and Portugal. During the period, Chorion signed a new master toy partnership with NSR in Hong Kong.

Christmas 2009 will see a celebration of Noddy’s 60th anniversary, involving a brand extension and the introduction of the brand into two important new regions: Spain and Canada. The Noddy consumer products roll-out is making good progress, focused on making the brand work across a wide range of global retailers.

Olivia
After four years of development and production, Olivia launched to great acclaim on the leading US pre-school channel Nickelodeon (Jnr). in February 2009. It was the leading US show for girls aged 2-5 during the months of February and March and was subsequently sold in another 122 territories including the UK, where it quickly became a top-rated show on Five’s Milkshake! programming strand.

Early indications from retail DVD sales point to significant consumer appetite for the brand. In addition, Chorion signed a global master toy deal for Olivia with Spinmaster and is in discussions with Wal-Mart, Target and Toys R Us for key Christmas listings next year.

As with Mr. Men, Olivia has proved a big hit in the clothing world, with new deals secured in the US this year.

Octonauts
A new pre-school property, Octonauts, will be launched on BBC in the UK, TF1 in France and ABC in Australia in 2010. Chorion has just signed a master toy license with Fisher Price to support its 52-episode Octonauts series.

Other brands
Chorion also represents Eric Carle, Paddington Bear, Beatrix Potter and other classic brands that have seen an uplift in licensing and merchandising activity this year.

Crime division

The key estates within this division are Agatha Christie and Georges Simenon. In addition, the Group also owns or controls Raymond Chandler, Robert Bolt, Margery Allingham, Edmund Crispin, Dennis Wheatley, Nicolas Freeling.

The Agatha Christie estate sells an average of 4m books globally per year and signed a significant output deal with ITV for Marple and Poirot during the period under which six films were delivered.

The Crime Division has also been very active since the end of the financial year, with the ever-popular Agatha Christie estate providing fresh interest for her world-wide base of fans. September 2009 saw the debut of Julia MacKenzie as the new Miss Marple on ITV1, while the week-long Christie Festival took place recently in Torbay and London.

Eight new Agatha Christie films are currently in production, including a remake of Murder on the Orient Express, a further three Poirot mysteries and four new Miss Marple films.

Outlook

Chorion has a strong portfolio of brands that are performing strongly in the global market, despite the economic turmoil of the past year. Indeed, Chorion’s classic brands have shown a significant increase in sales.

Chorion has built a strong development pipeline of opportunities that will come to market over the next few years, underlining the Group’s confidence in continued international growth and success.

End

Additional background information - www.chorion.co.uk

Based in New York and London, Chorion is a global media content company with a strong base in the pre-school market. It is the owner of a range of iconic children's characters including Noddy, Mr. Men and Olivia.

Chorion works with publishers, TV and film production companies, and toy manufacturers worldwide to bring these characters to life across a wide range of family-friendly media and toys, with the objective of stimulating, educating and inspiring children, their parents and care givers.

Key global partners include major children’s broadcasters including The Disney Channel, Cartoon Network, Nickelodeon; major publishers such as Harper Collins, Penguin and Egmont; and toy makers including Fisher Price, Bandai and Spinmaster.

Apart from its children’s brands, Chorion is also the owner of several famous literary estates, including Agatha Christie, Raymond Chandler and Georges Simenon.

Chorion was listed on the AIM market of the London Stock Exchange from 2002 to 2006, when it was taken private by 3i and Chorion’s management team, for a total enterprise value of £135m.

Chorion owns or has the publishing, licensing, merchandising and media rights to the following key properties:

Children’s properties

 

Mr. Men Little Miss - Classic

Mr. Men Little Miss - Children's

Noddy

The World of Beatrix Potter*

Paddington Bear*

Olivia **

The World of Eric Carle*

Octonauts **

Famous Five

Spot *

Enid Blyton

Gaspard & Lisa

Max and Ruby

Flower Fairies *

The Ladybird Archive *

The Snowman *

Horrible Histories *

Horrible Science *

Dan Dare *

Amazing Baby *

The Little Prince *

 

* Licensing and merchandising only

** Not classic publishing rights

  Literary Estates

 

Agatha Christie

Georges Simenon

Raymond Chandler

Robert Bolt

Margery Allingham

Nicholas Freeling

Edmund Crispin

Dennis Wheatley

The Country Diary of an Edwardian Lady

Contacts

College Hill for Chorion
Adrian Duffield/Carl Franklin
+44-(0)20-7457-2020

Contacts

College Hill for Chorion
Adrian Duffield/Carl Franklin
+44-(0)20-7457-2020