HIT Entertainment remains on course to substantially enlarge its character licensing empire following an expansion double whammy. The group announced that it had reached an agreement with US giant Sears to set up Bob the Builder franchises - called 'Bob Shops' - in 850 Sears stores. The move, which will see HIT sell videos and other merchandise related to the endearing children's cartoon character, has been prompted by the success of Bob in the US (Bob is the number one show on the Nickelodeon cartoon channel). The deal with Sears, which is expected to beef up sales in HIT this year, comes hot on the heels of HIT's £190m reverse takeover of US-based Lyrick Studios, a company whose portfolio of products includes another popular pre-school hit - Barney the Dinosaur. To pay for Lyrick, HIT issued £114.3m in new HIT shares at 446.5p and paid £76.2m in cash (partly funded by a £73m placing). At the interim stage to January, HIT achieved sales of £12.8m (£9.01m) and pre-tax profits of £3.03m (£2m). Full year results should see profits come in at £5.6m rising to £20m in 2002. This leaves HIT trading at more than 99 times expected 2001 earnings, but just over 40 times prospective 2002 earnings.