Blue Ant in ‘various forms’ of M&A talks as it posts 7% revenue uptick in first public earnings
Canada-based studio group Blue Ant Media posted 7% year-on-year revenue growth in its first earnings report since going public via a reverse takeover of Boat Rocker, with an increase in global ad revenue offsetting a dip in production revenue resulting from what it called “delayed” greenlights.
Revenue in the third quarter was C$55.7m (US$40.4m), up from C$51.8m a year ago, while revenue for the first three quarters of the year was C$140.2m, down slightly from C$142.2m a year ago.
It should be noted that this earnings report is for the three-month period that ended on May 31, and therefore does not incorporate the businesses it acquired – Insight Productions, Proper Television and Jam Filled Entertainment – as part of its reverse takeover, which officially closed on August 1.
Blue Ant began trading on the Toronto Stock Exchange last week, with its stock currently trading at C$8.50 per share. The company’s growth in Q3 was driven by a 64% uptick in its global channels and streaming segment, which hit C$21.4m, while Canadian media dipped 5.5% to C$22.2m and production and distribution fell 14% to C$15.1m.
Earnings before interest, taxes, depreciation, and amortisation was up 24% to C$14.6m in Q3, with C$5.3m from global channels and streaming, C$8.6m from Canadian media, and C$2.1m from production and distribution.
Blue Ant also reported C$11.2m in losses from continuing operations, which included C$4.2m in one-time costs related to the reverse takeover, an C$8.3m goodwill impairment charge and C$8.5m in share-based compensation related to restricted stock units.
In total, the company had C$26.1m in debt at the end of the Q3. However, upon the close of the transaction, Blue Ant received an inflow of cash in the range of between C$54m and C$89m, it noted. Blue Ant’s market cap stands at C$186m.
CEO Michael MacMillan said the focus on interconnected streaming, production and distribution businesses had provided “stability” in a year characterised by a soft ad market, cord-cutting and “muted” greenlights from global buyers.
The continued stability of Blue Ant’s business will also present it with opportunities to acquire companies, many of which are struggling amid tough market conditions, at favourable prices.
“Our recently completed reverse takeover has further increased Blue Ant’s dry powder, which will enable us to invest in key areas to accelerate growth, both organically and through acquisitions, while enhancing the scale and diversity of our studio,” MacMillan said.
“The result is that the current challenging industry conditions present a unique opportunity for us to pursue significant content and business acquisitions at attractive valuations.”
During an investor call on Tuesday, MacMillan added that Blue Ant is in “various forms of discussions with different companies” as it looks for suitable acquisition targets.
Those discussions currently span a range of different companies and assets, including content catalogues, prodcos and properties in “media-adjacent spaces emerging due to the shifts in technology.”
Analysts also asked MacMillan and chief financial officer Rob Chase whether the firm would look to sell off any of the assets within its Canadian media division, which houses its linear channels BBC Earth, BBC First, Love Nature, Cottage Life, Makeful, Smithsonian Channel Canada and T+E.
MacMillan said none of the entities within its Canadian media group, which also includes its consumer events business and its Cottage Life publication, are likely to be offloaded, given the segment is performing well.
“We have divested assets in the past,” he said, citing its sale of Omnia Media and other assets in Australia, New Zealand and Singapore. “But today, there’s nothing within our [Canadian media] family with that we’re considering divesting. In fact, Canadian media – notwithstanding the headwinds in the industry, partly due to advertising and cord-cutting – still performs, I think, quite impressively, and it generates cash, which is very useful to us.
“It also is one of the platforms through which we commission new programmes along with our international channels, so it is connected in an important strategic way to our global channels and streaming businesses, as well as to our studios business.”
