Bob sees profits demolished at HIT
BOB the Builder failed to fix it for his owner HIT Entertainment as a combination of a weak dollar and comparison with bumper video sales after 9/11 knocked sales of the cartoon construction chappie's products by 29% in the six months to the end of January.
Bob makes up 23% of the group's sales and it was only a steaming performance from Thomas the Tank Engine, who accounts for 15% of sales, that kept HIT's first-half profits within brokers' forecasts. Barney the purple dinosaur's sales saw a 7% fall in revenues.
Profits before goodwill and exceptional charges dipped from £25.5m to £24m on sales down 3% at £92.8m. But the price of HIT's acquisitive past is shown after goodwill is written down, with pre-tax profits falling from £21.5m to £14.6m.
Ever since HIT's warning at the end of last year that Bob was in need of refurbishment, the group has been on bid alert with speculation that one of the US majors could take it over.
Chief executive Rob Lawes said current trading was in line with internal forecasts and, looking ahead, he saw great opportunities in new digital TV channels and taking direct control of US distribution.
The US accounted for 60% of HIT's revenues last year. It suffered from an average dollar rate 10% lower than in the preceding period. However, Lawes said that in the second half the group had partly protected its revenues by hedging the dollar at 1.74.
