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Thunderbird Entertainment: revenues beat expectations, animation leads the way


Thunderbird Entertainment (TSXV:TBRD) put out some more impressive results in February. The Canadian production company, which creates programs mainly for the digital streaming market, reported revenues of C$28m, up 98% year on year.

The raise in revenue is one of the hallmarks of Thunderbird Entertainment, which has been able to continue to roll out content at a regular pace during the pandemic. It reported a steep increase in production service work and also managed to triple licensing and distribution revenues.

Thunderbird Entertainment Group surpassed expectations

Thunderbird Entertainment Group is a global award-winning, full-service multiplatform production, distribution and rights management company, headquartered in Vancouver, with additional offices in Los Angeles, Toronto, and Ottawa. Thunderbird creates award-winning scripted, unscripted, and animated programming for the world’s leading digital platforms, as well as Canadian and international broadcasters.

The numbers surprised analysts on the upside. Canaccord Genuity had been predicting C$14.4m from licensing and distribution while Thunderbird managed more than C$18m. Much of this can be attributed to the animation division. While it has been harder to make ‘live’ programming anywhere during the pandemic, animation does not rely on physical filmining and if anything, demand for animated content has increased.

Impressively, distribution revenues were up 272% year on year, again more than double the estimates of local analysts. Big earners for the company include Last Kids on Earth, which saw 10 episodes delivered to Netflix, and Highway Thru Hell.

Thunderbird reported to the market that it had 21 programs at various stages of production. Ten of these are either proprietary or leverage some form of IP partnership. The company is continuing to try to build its library of proprietary IP, which should help to raise its valuation.

Thunderbird says farewell to Kim’s Convenience

On the downside we note that Thunderbird Entertainment has been forced to pull the plug on successful sitcom Kim’s Convenience after five seasons. This followed the departure of two of the show’s creators, Kevin White and Ins Choi. The show has been starting to gain traction outside its core Canadian market, so it was disappointing to see that one shut up shop.

Thunderbird Entertainment remains one of the best performing stocks on our pick list. We went into Thunderbird Entertainment at C$1.05. At the end of last month the stock was trading at C$4.35. Shares have come off slightly since the end of February, and were trading at C$4.18.

Our prognosis remains positive on Thunderbird Entertainment. The company has weathered the pandemic well, and while we know that Kim’s Convenience was a flagship show for the company, the real muscle remains in the animation division, which has remained highly profitable, even in the depths of the pandemic.

Thunderbird announced March 2 it was adding Linda Michaelson as an independent director. She is a partner and practice group leader for the corporate and securities practice at Sheppard Mullin Richter & Hampton. Her experience includes working with companies in the digital media sector and she has represented several major motion picture studios and television networks. She is considered one of the top entertainment lawyers in North America.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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