Entertainment Rights (ER), owner of the intellectual property to children's TV favourites Postman Pat and Rupert Bear, is pinning its hopes on the eponymous postal hero for a return to stability after admitting it remained cautious on the outlook for the current year.

The media company, which had a catastrophic final quarter in 2007 when its exclusive DVD distributor failed to make key pre-Christmas releases, said US consumer confidence in particular was declining.

Entertainment Rights is hoping a relaunch of Postman Pat will reinvigorate 2008 and 2009, with new episodes due to be transmitted on CBeebies, the BBC's digital children's channel, in autumn 2008.

Postman Pat Special Delivery Service will have a full range of toys and tie-ins, due to be launched in shops in January 2009.

Reporting final results for 2007, Entertainment Rights said revenues had increased by 129 per cent in the year, following its acquisition of Classic Media in January 2007 for £106 million. Pre-tax profits for the year climbed 21 per cent to £7.9 million.

The Classic Media deal brought Casper the Friendly Ghost and Lassie into the Entertainment Rights stable, alongside rights to a number of other classic US TV and film characters.

The media rights group is currently in preliminary talks with a Canadian media group, understood to be Peace Arch Entertainment, but was unable to provide any further news on a possible takeover.

Nick Phillips, the former chairman of Warner Music UK & Ireland, who was parachuted into the company in March as chief executive said that he would spend time in the coming months reviewing the business to determine where future investment should be focused.

"The ER business has undergone a tremendous amount of change during the past 12 months," he said today.

The company, which has seen its share price fall by 74 per cent in the last year, said that issues with its DVD distributor were now resolved but that the company was taking appropriate steps to recover its lost revenue.

Entertainment Rights's shareholders include the tycoon Trevor Hemmings and SVG Capital. The intellectual property group was recently in talks with Och-Ziff, the hedge fund, about a potential takeover that came to nothing.

In 2007, Entertainment Rights also acquired the rights to Where's Wally? and plans are underway to develop this character into a new TV cartoon and introduce Wally to gaming, through Wii, Nintendo, online and mobile formats.

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