Entertainment One is buoyant

DVD sales are on the slide and marketing costs are soaring, but the company behind Peppa Pig still thinks the future is bright.

Entertainment One, which also distributes the Twilight franchise, says the animated pig is taking off in America and a takeover due to complete shortly will help grow the business. Profits for the half-year slumped by £10m to £8.8m, though revenues were up by nearly £16m to £220.5m. That disconnect is due to the expense of plugging new ventures such as Looper and The Sweeney.

The Toronto-based firm also said its proposed takeover of rival Alliance Films is on course to close in early 2013, subject to Canadian Competition Bureau approval. Its chief executive, Darren Throop, said: "The business is continuing to grow with Peppa Pig thriving in the US and internationally."

The higher entertainment revenue offset a continuing decline in the company's legacy distribution business on lower sales of DVDs. Its film releases in the second half of the year include The Twilight Saga: Breaking Dawn – Part 2, pictured, Nativity 2, and Bullet to the Head.