QMS Media Limited (ASX: QMS) today revealed that it is in talks with integrated talent representation and sports marketing company, TLA Australia, to take over their business.
In a release dated 19 December 2018, QMS Media stated that it has not signed any definitive agreement with TLA Australia but is in the process of taking preliminary discussions to explore the potential acquisition of TLA Australia. If the transaction goes through, the company intends to notify the various funding options it would choose at the relevant time in support of the acquisition.
This news comes after the QMS Media inked a Heads of Agreement (HOA) with New Zealand’s MediaWorks for a proposed merger of its New Zealand segment. The transaction would see QMS merging its NZ out-of-home, digital media and production businesses with MediaWorks’ TV, digital and radio business. Under the combined sales network, the company expects to maximize revenue synergies along with generating strong cash flows.
However, the transaction is subject to the satisfaction of various binding terms as well as customary conditions. On merger, QMS Media will reportedly be entitled to receive the material, but no controlling shares would be given to it in the expanded MediaWorks business.
Jack Matthews, Chairman of MediaWorks, stated that this proposed merger would fuel up the MediaWorks' advertising solutions as well as its ability to deliver premium quality content.
Besides mergers and acquisition, QMS Media focuses on evaluating all the available alternatives for its Sports business. Recently, it has unveiled the strategic realignment of its overall businesses to drive its future growth trajectory. The realignment includes the division of QMS Media’s business into three segments that include first, QMS Media - premium quality digital out-of-home. Second, MediaWorks - the largest multi-media company in NZ and third, QMS Sport - integrated global digital sports technology, infrastructure and media rights business.
On the financial performance front, the company has posted a 21% increase in revenue to $204.2 million for the 12-months ended 30 June 2018. Its FY18’s underlying EBITDA of the company grew 22% to $45.8 million, and statutory NPAT increased 10% to $18.4 million. As a result, the company declared a higher dividend of 2.2 cents per share, reflecting a hike of 10% on the previous corresponding year.
Looking into Fiscal 2019, QMS Media expects its earnings before interest tax, depreciation, and amortization (EBITDA) to lie within the range of $56 million and $58 million.
In today’s trading session, QMS Media was hit by the negative market sentiments. QMS share price has plunged 2.778% to last trade at $0.875 on 19 December 2018. Its price to earnings ratio was 16.070 x with a market capitalization of $293.21 million. Moreover, QMS' stock has witnessed a negative performance change of 10% over the past one year.
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