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Aardman Animations, creators of last year’s Shaun the Sheep film, will be honoured at this year’s TIFF Kids International Film Festival.

In the 1981 animated short Grand Morph's Home Movies, a stash of black-and-white reels comes to light, showing the clay-based character Morph as a clumsy, nappy-wearing toddler. "He was a sweet and contented baby," the narrator says, "quite unlike Morph as he is today."

Morph, for the uninitiated, was the first stop-motion star from Aardman Animations, the iconic British studio. The character is of simple invention, but the wisecracker represents the beginnings of an animation empire. The beauty of a little blob of plasticine is that it can change – or morph – into whatever it needs and wants to be. The same goes for Aardman, which went on to become the industrious home for the stop-motion shenanigans of an award-winning Peter Gabriel video (1986's Sledgehammer), the eponymous characters of the British man-and-dog comedy series Wallace and Gromit, and such box-office bonanza feature films as 2000's Chicken Run, 2005's Wallace & Gromit: The Curse of the Were-Rabbit and last year's Shaun the Sheep Movie.

Aardman Animations is to be saluted at this year's TIFF Kids International Film Festival (April 8 to 24) with a special 40th-anniversary compilation. The studio has adapted over the decades (moving from analog to digital to 3-D), but its trademark, offbeat comic mix of innocence, slapstick and surrealism has endured.

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"The animation is rich and the storytelling is rich," festival director Elizabeth Muskala says. "Young people just want to be entertained, and the humour and visuals associated with Aardman are just so compelling."

The Aardman retrospective (screening April 17 and 24) includes 1993's The Wrong Trousers, Nick Park's 30-minute film that won an Oscar as the year's best animated short. It begins with a kitchen-table scene in which the silent but smart pooch Gromit reads the morning paper, with a front-page headline that reads, "Moon cheese shares soar."

It's a cheeky reference to the preceding Wallace and Gromit short A Grand Day Out, which involves the inventive twosome, who, out of cheese, fly a rocket to the moon for their much needed tea-and-cracker accompaniment. And as for soaring shares, the fortunes of Aardman have risen stunningly since the studio's humble beginnings in the 1970s.

In partnership with major international players (moving from DreamWorks to Sony Pictures to StudioCanal) Aardman's six features have all grossed nine figures, beginning with 2000's Chicken Run, which pulled in $225-million (U.S.) on a chicken-feed budget of $45-million.

To Muskala, however, the relationship between Aardman and the TIFF Kids International Film Festival (formerly called Sprockets) is not based on box-office receipts but on the fostering of film audiences. Teenagers applying for jobs with TIFF today have remarked to her that a Wallace and Gromit film they saw years ago as children had changed their perception on what films can achieve. "Aardman," she says, "has helped create a generation of young people who love films, in all forms."

Fledgling cinephiles consume stories in different ways than they would have 40 years ago; Aardman has accordingly diversified into apps, gaming and the online world. Although it's an empire built on stop-motion animation, there's nothing clay-footed about the company.

"Storytelling has changed, it's a little more immersive due to technology," Muskala says. "But one thing that hasn't changed is that young people are engaging in the medium."

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Films for kids, then – a growth industry if ever there was one.

TIFF Kids International Film Festival runs April 8 to 24 at the TIFF Bell Lightbox in Toronto.

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