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, Nine’s 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 “merger 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 Australia’s leading radio network, to these offerings.”
Fairfax’s digital property portal Domain Group and Nine’s 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 Fairfax’s 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 Fairfax’s new revenue model that drives majority of revenue by subscription and circulation instead from advertising. 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.
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.