BC Business
After shopping itself around and failing to find the right buyer, the film and TV production house is back in the black and shooting for a TSX big board listing
The stock: The chief knock against B.C.’s film and television industry is that it’s a straight service operation with a body but no head. Pop-up companies are created to produce a show, spend a budget and collect the tax credits before folding up their tents. Rare is the local producer with a permanent head office, executive suite and annual United Way campaign. Rarer still is a publicly traded one. Well, Vancouver-based Thunderbird Entertainment (TSXV:TBRD) is just such a company. And though for most of its existence (21 years, the last six publicly traded) it’s been an iffy investment, it’s finally getting some applause.
The drivers: Results for the fiscal year ended June 30, released earlier this month, showed net earnings of $2.4 million, a significant reversal from Thunderbird’s $5-million loss in fiscal 2023. Much of the turnaround arose from $3 million in cost reductions implemented over the year. Revenues were off slightly year-over-year at $165.3 million, but management is targeting 20-percent revenue growth in the current fiscal year. The new business is skewed towards the company’s own scripted, unscripted and animated content, which tends to have a lower up-front return than contracted service production but pays ongoing licensing fees over the long term.
Thunderbird had 24 shows on the go as of June 30, including six of its own and 18 service productions. The company’s Atomic Cartoons division, acquired in 2016, puts out the likes of Marvel’s Spidey and his Amazing Friends, the latest in the My Little Pony franchise and Lego Jurassic Park. Its Great Pacific Media division produces Deadman’s Curse for the History Channel. Scripted live-action titles include Boot Camp and Kim’s Convenience.
Last year, the company formed a special committee of its board of directors and hired an investment bank to explore “strategic alternatives” (typically a sale) but concluded that the best option to maximize shareholder value was to stay the course and aim for promotion to the Toronto Stock Exchange’s big board in the medium term. The board feels the stock is substantially undervalued, and analysts watching it tend to agree. TBRD shares closed at $1.68 Tuesday (Oct. 22), down 22.6 percent year to date.
Word on the street: TBRD’s fourth-quarter results “were notably stronger than our estimates, with revenues coming in at $51.8-million, up 37.3 percent year-over-year,” wrote Canaccord Genuity analyst Aravinda Galappatthige, who hiked his price target to $3.50 from $3 with a “buy” rating. “We remind investors that while near-term margins on the licensing side may be lower, there is a longer tail to the revenue cycle as well as the prospect of meaningful upside for very successful titles (e.g. merchandising),” he added hopefully.
Coming and going: Vancouver-based Lithium Americas Corp. (TSX:LAC) stock has risen 22.6 percent since General Motors Co. announced a revised US$625-million cash infusion into the company’s Thacker Pass project in Nevada on Oct. 16. Under the terms of the deal, the automaker will acquire a 38-percent stake in the mine and a guaranteed supply of lithium used in the manufacture of electric vehicles. The deal replaces an earlier arrangement between the companies that had been held up by delays in project funding from the U.S. Department of Energy.