DHX Media growth initiatives continue with publishing deals; Q1 sales jump

HALIFAX – DHX Media Ltd. (TSX:DHX.A, TSX:DHX.B) reported a big jump in first-quarter revenue, which rose to $43 million from $27 million a year earlier following its acquisition of the Family Channel and others.

The Halifax-based company has been growing its child- and youth-oriented entertainment business, including a new publishing deal and programming acquisition.

DHX said Friday it has granted rights to Egmont Publishing to produce a range of books and magazines based on the “Teletubbies,” a British pre-school television series the company is refreshing with a new 60-episodes for the BBC.

Executive chairman Michael Donovan also told analysts that DHX has signed a deal to acquire a library of 151 television series, movies and television specials including “Emily of New Moon” — based on books by the author of “Anne of Green Gables” — and the international distribution rights to “Degrassi.”

“This is a transaction that we’ve been working on for over a year and we’re very pleased to have signed that, literally, last night,” Donovan said in a conference call to discuss its financial results issued Thursday.

The quarter ended Sept. 30, which begins the company’s 2014-15 financial year, included a $14.22-million charge related to a regulatory obligation linked to the Family Channel deal with BCE Inc. (TSX:BCE), which was required to sell the channels when it acquired Astral Media.

The one-time item pushed DHX Media to a net loss of $7.7 million, but on a normalized basis the company had a profit of $5.5 million. A year earlier, it had a net profit of $2.2 million and a normalized profit of $3 million.

The normalized profit was five cents per share in the three months ended Sept. 30, up from three cents a year earlier.

DHX completed the acquisition of the Family Channel and Disney channels on July 31 and created its DHX Television division around the channels.

In August and September, DHX Television generated a total of $14 million in revenue which was at the high end of management’s expectations.

DHX reiterated a 2014-15 revenue target for DHX Television for between $72 million to $75 million for the year ended June 30.