Nine Entertainment Co. Holdings Limited (ASX: NEC) has announced the sale of the Australian Community Media and Printing business (ACM) which is a significant step towards its strategy to exit non-core businesses.
In an announcement made on 30 April 2019, the company announced that it will be completing the sale of ACM business by 30 June 2019.
As per the company’s announcement, the ACM business will be acquired by a company controlled by interests associated with Antony Catalano and Thorney Investment Group and as part of this sale, Nine Entertainment will receive cash proceeds of around $115 million. Currently, the company is planning to use the cash proceeds for reducing Group indebtedness.
As per the company’s announcement, the commercial relationships between ACM and Nine Entertainment will be preserved through arrangements between them. The company is looking forward to continuing to work with the business in areas where both the companies are getting benefitted.
While commenting on the sale agreement, the company’s CEO Hugh Marks told that this sale is aligned with the company’s strategy to exit non-core businesses. The company intends to focus on its portfolio of high-growth, digital assets.
For the half year ended 31 December 2018, the company reported a consolidated net profit after income tax of $171.58 and a consolidated net profit after income tax of $171.337 million from continuing operations.
The company believes that the successful execution of its business strategies will enable it to grow in the future.
Currently, there are various key risks that could impact the operations of the business. One of the major risks which could affect the revenue of the company is a significant change to advertising market conditions that leads to a decline in the advertising market or an adverse shift in free-to-air (FTA) television’s share of the broader advertising market.
Further, the FTA industry and Nine’s television business is subject to various legislation which may change in the future and this may impact on the business. These risks include changes to the regulatory environment under which the FTA industry operates; the anti-siphoning legislation; the licence conditions under which Nine operates; and regulation of content.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $1.755, up by 0.862% during the day’s trade with a market capitalisation of ~$2.97 billion as on 30 April 2019. The counter opened the day at $1.750 and reached the day’s high of $1.780 and touched a day’s low of $1.740 with a daily volume of ~ 2,620,869. The stock has provided a year till date return of 28.89% & also posted returns of 4.82%, 12.26% & 1.75% over the past six months, three & one-month period respectively. It had a 52-week high price of $2.665 and touched 52 weeks low of $1.305, with an average volume of ~ 10,274,374.