The company which owns local distributor Madman Entertainment has posted a positive start to the financial year after slashing costs across the business.

Funtastic told shareholders at its annual general meeting that underlying earnings had more than doubled to $7.5 million despite a 15 per cent drop in revenue in the three months ended October. It also said it had acquired worldwide rights to the Pillow Pets and My Pillow Pets brands for about $2 million.

It marks a turnaround from last financial year’s result when the toy, sporting and lifestyle goods company posted a $38.21 million annual net loss, weighed down by $32.7 million in total impairment charges, restructuring costs and other material items, including a $6.1 million impairment for Madman.

The only specific data revealed at the AGM about Madman was that its home entertainment market share had climbed to 6 per cent from 5.4 per cent a year earlier (by value, as measured by GFK).

Madman co-founder Paul Wiegard, who was also elected to the Funtastic board at the AGM, later said that the business had been able to maintain prices while shipping less units. The entire home entertainment market is contracting as consumers slowly shift from buying DVDs to Blu-ray and digital downloads.

“There’s been a number of contributors and I’m certainly excited that our Australian films and SBS library continue to perform well,” Wiegard said.

Funtastic said that Madman planned to further develop its digital strategy, including an aggregation offering, and increase investment in technology. Madman often acquires all distribution rights for the screen content it distributes and has a sophisticated multi-platform strategy that includes all major digital channels.

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