Amid merger with media giant Fairfax, broadcaster Nine Entertainment has achieved 6% growth in revenue and 25% increase in group EBITDA for the year ended June 2018.
In the Annual General Meeting held today, i.e. 14 November 2018, Chief Executive Officer Mr. Hugh Marks said that the group earnings were in line with the guidance, witnessing better than expected performance of Metro TV market. As a result, Nineâs TV EBITDA reached $238 million, up 26% year-on-year while Digital recorded EBITDA of $34m for the year, up 18% despite the negative impact of the loss of the contribution from Bing.
As proposed in July 2018 Nine Entertainment is in process of combining with Fairfax Media to get benefitted by the combined synergies of two media giants operating across Australia.
Chairman Mr. Peter Costello advised that the âmerger with Fairfax will not only add a majority interest in Domain but will also add print and further digital opportunities, as well as a majority interest in Australiaâs leading radio network, to these offerings.â
Fairfaxâs digital property portal Domain Group and Nineâs streaming company Stan are seen as the two most captivating factors of Nine-Fairfax merger. With Stan now close to 1.2million active subscribers, Nine expects to almost double or possibly triple the subscribers to Stan post-merger.
Mr. Marks said that after combining the digital revenues of the existing Nine digital businesses such as 9Now and Fairfaxâs digital revenue base, the combined publishing business will reach 8.1 million Australians each day and have a revenue base of more than $500 million.
Nine Entertainment expects to gain a cost benefit of at least $50 million on merger with Fairfax as the combined group would get advantage by the removal of dual cost associated with corporate activities, technology and sales. Further, the merger group is expected to experience a strong acceleration in top line growth underpinned by Fairfaxâs new revenue model that drives majority of revenue by subscription and circulation instead from advertising.Â However, the vote of Fairfax shareholders on merger is due to be received by the next week.
Providing a trading update on Fiscal 2019 performance, Nine told that for the first quarter, its Metro Free to Air business achieved a leading revenue share of more than 40% of a market which was broadly flat on last year. However, as experienced in September and October, the company expects to witness low momentum across the market till the end of 2018. The management further advised that 9Now is experiencing continued growth in registered users, and streams which is translating to revenue growth of more than 50%, well ahead of market growth for the quarter.
Looking into the full year performance of FY19, Nine Entertainment expects to report group EBITDA of between $280 million and $300 million on a standalone basis without considering extra trading week that fell in Fiscal 2018.
On the day of its Annual General Meeting, i.e. 14 November 2018, Nine Entertainment shares slipped by 0.635% to close at $1.565. Further, the stock of Nine Entertainment Co. Holdings Limited (ASX: NEC) has seen a performance change of +3.62% over the past one year.
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