Strong Bob sales in US to lift Hit profits

Hit Entertainment, owner of Bob the Builder, yesterday gave investors a welcome surprise by saying Bob products were selling strongly in the US.

Its chairman, Peter Orton, told investors at its annual general meeting that he expected Hit Entertainment's current year performance would "significantly exceed" expectations.

Analysts moved to upgrade their profit forecasts and now expect the company to produce a profit of around £23m for the current year, some £3.5m to £4m better than previously.

"Animation is a hit and miss business and they have developed a hit for the time being. Bob's been on TV in the US since the start of the year and clearly the merchandising launch has gone extremely well," one analyst said.

It is understood that Bob the Builder videos, in particular, have been selling well in the US as well as other high margin consumer products including a range of toys. Shares in Hit closed down 2.5p at 375p.

Simon Davies, an analyst at ABN Amro, said: "People knew it [trading of Bob products] was going well and I think there was a general anticipation that there would be upgrades. But things are clearly going better than most of us had anticipated."

In addition, Mr Orton said that Channel 5 had snapped up 100 episodes of Barney, its dinosaur animation, enabling them to schedule programming on a five-day-a-week basis. "This creates an opportunity for the series to reach a substantial terrestrial audience from the spring of 2002," he said.

Hit Entertainment also recently bought the rights to Pingu the penguin to broaden its portfolio of characters. It hopes that character will prove another hit in the US. "Pingu is an under-exploited character and, given the infrastructure that they have in place, they [Hit] look well placed to maximise revenues from that. But ... you don't know if they'll be able to replicate the success of Bob," an analyst said.