DHX Media Q2 revenue up 27% but margin at low end of target range, company says

HALIFAX – DHX Media Ltd. (TSX:DHX.B) says it has been experiencing strong revenue growth but its second-quarter profit margin was at the low end of management expectations.

The Halifax-based company — which operates several specialty TV channels but primarily creates and distributes TV programs for children and youth — says its revenue in the second quarter was $81.5 million, up 27 per cent from a year earlier.

Gross margin increased by 18 per cent to $44.29 million, or 54 per cent of revenue, as an unexpectedly high proportion of distribution revenue came from newer library titles and an abnormally high percentage of live action shows.

Among DHX’s titles are “Teletubbies,” “Inspector Gadget” and the “Degrassi” franchise.

Its main specialty channel is Family.

Net income for the second quarter ended Dec. 31 doubled to $11.7 million or nine cents per share from $5.5 million or five cents per share a year earlier.

Adjusted EBITDA, another measure of the company’s earnings, was $27.8 million — up 16 per cent from $23.9 million.

The DHX says its quarterly dividend will rise by 6.7 per cent to 1.6 cents per share, to be paid March 21.