EXPM:KWWMF - Post by User
Post by
retiredcfon Apr 02, 2019 12:20pm
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Post# 29570512
TD
TDThis is a flash report so it's possible that they may raise their current target of $12.50 in the next couple of days. Initiated a position this morning. GLTA
Kew Media Group Inc.
(KEW-T) C$7.04
Kew Achieves its Targets Again in 2018
Event
Q4/18 results and 2019 guidance
Impact: POSITIVE
For the second consecutive year (and the second year of operations for the company), KEW slightly exceeded both our estimates and management guidance for EBITDA. $15.3 million in EBITDA in Q4/18 was a bit above our estimate of $15.1 million (Exhibit 1).
Guidance for 2019 was also impressive, in our view, with mid- to high-single-digit growth off of a pro forma base of $31.9 million, implying $33.5 million-$34.8 million (+5% to +9%), which is in-line with our current estimate of $33.8 million. Note that organic EBITDA growth in 2018 (excluding the Essential Quail acquisition) was cited as 10%.
Adjusted FCF remained negative in Q4/18 at -$3.1 million, but we were impressed with both the increased focus on FCF and the improved disclosure. Management intends to disclose details on FCF adjustments (movements in working capital and investment in film and television rights) going forward. Adjustments in the quarter were +$2.2 million in working capital movements and -$17.4 million in rights investments.
Management clarified that attractive investment opportunities in late-2018 justified an increase in content rights investments, despite many of those shows not being translated into revenues until 2019 (such as Finding Neverland and a new series of Line of Duty, which have already been monetized).