Profits at Brown Bag Films hit by €3.64m exceptional cost as revenues  rise to €58.96m

Children's program 'Eva the Owlet', which is made by Brown Bag Films for Apple+.

Pre-tax profits at the business that operates multi-award winning animation studio, Brown Bag Films last year more than halved to €2.42m.

The 58.5% decrease in pre-tax profits from €5.85m to €2.42m arises from Niagara Films Ireland Ltd incurring an exceptional one-off write down of €3.64m concerning the spend incurred on the distribution of one of the studio's TV programmes.

The directors “feel this impairment better reflects future performance of the title”.

Revenues at the business — which operates from studios in Dublin, Toronto and Bali — increased marginally from €57.98m to €58.96m in the 12 months to the end of August last.

The firm last year paid dividends of €2.4m after paying dividends of €1.52m in 2021.

Brown Bag is celebrating its 29th year in business and continues to flourish with a number of new shows debuting in the past year including Cartoonito’s Lu & the Bally Bunch and Eva the Owlet for Apple+.

The studios have also produced new seasons and episode drops for Ridley Jones and Ada Twist Scientist both for Netflix, along with Eureka for Disney Junior.

Founded in Dublin in 1994 by Cathal Gaffney and Darragh O’Connell, Brown Bag Films was acquired by Canadian based 9 Story Media Group in 2015.

The firm’s operating profits declined by 10.5% from €6.78m to €6.07m last year, and the business recorded the pre-tax profit of €2.42m after taking into account the exceptional €3.64m cost and interest costs of €340,592.

The profits for last year also take account of non-cash depreciation costs of €992,014 and non-cash amortisation costs of intangible assets and acquired content of €3.2m.

The firm also incurred additional amortisation/impairment of TV shows in production of €9.5m that included the €3.64m non-cash impairment.

The revenues last year were made up of €47.27m in production revenue and €11.69m in distribution revenue.

The firm also benefited from €153,005 in grant income and other operating income.

Numbers employed decreased from 373 to 366 as staff costs increased from €22.05m to €23.03m. Directors’ pay increased from €766,713 to €798,812.

The firm recorded a post tax profit of €1.68m after paying corporation tax of €742,846.

Brown Bag Films work also includes global children’s TV hits, Doc McStuffins and Henry Hugglemonster.

Shareholder funds at the end of August last year totalled €59.89m that included accumulated profits of €20.26m.

The company’s cash funds declined sharply from €30.58m to €19.23m.