Kew Media on Wednesday (Aug. 15) announced its second quarter results, posting revenues of CA$49.7 million (US$37.8 million) and profits of CA$13.4 million, which the company said keeps it on track to hit its financial targets for 2018.
Of the total, CA$36.9 million came from production while the remaining CA$12.8 million came via its distribution business. Meanwhile, Adjusted EBITDA for the quarter was CA$2.7 million, with Kew reaffirming its forecast that EBITDA for 2018 will be CA$26.5 million.
In its Q2 financial filing, Kew said it expects a “significantly stronger” second half of the year as the prodcos under its umbrella ramp up production on a number of projects. The Toronto-headquartered company added that the delivery of these series will also boost its distribution revenues heading into the next two quarters.
Following its acquisition of five Canadian production companies in early 2017, Kew Media has remained active in the acquisition market in the latter part of 2017 and the first half of 2018. Kew’s most recent acquisition saw it enter the Australian market with the purchase of Essential Quail Media Group for an initial price of US$24.12 million (AU$32.8m). The transaction was completed last month.
During a conference call, CEO Steven Silver said that while the production business is currently driving the majority of the company’s revenue, its distribution business is also expanding. According to Silver, Kew is set to take around 150 new titles to the MIPCOM market in October (comprised both of titles represented by Kew Media Distribution and UK-based TCB Media Rights, the latter of which Kew Media acquired in fall 2017). This represents the largest slate Kew has ever taken to an individual market and is 40% bigger than the catalog it brought to last year’s MIPCOM market in Cannes, France.
And on both the production and distribution side, Silver and founder and chairman Peter Sussman remained positive about Kew’s ability to expand its presence in the market. “As streamers enter the market now, it’s becoming a source of increased demand. We maintain we’re living through what is the best time to be in our business. Not only is [the growth of online streaming services] underwriting a lot of our activity right now, but promises to underwrite that revenue growth for years to come,” said Silver.
“I’ve been doing this a long time, and there’s just so many new places to sell to, and the older places keep buying more. So it’s not like a proportionate amount is moving away from traditional media to new media outlets – it’s remarkable,” added Sussman.
From Playback Daily