On 26 September 2018, Southern Cross Media Group Limited (ASX: SXL) (SCA) announced that it is going to transfer its Canberra broadcast playout operation in 2020 to NPC Media. NPC media is a joint venture of Nine and Seven Networks. Both NPC and SCA are having similar playout requirement hence it makes sense if they pool their resources. NPC media is planning to provide SCA its playout services for an initial period of seven years. After the release of this news the company’s share price decreased by 0.23% as on 26 September 2018.
SCA will now have the opportunity for a collaboration with peers Nine and Seven to create an industry leading back-office solution, in a facility that will be developed to include full technical back-up. It will also allow SCA to reduce operational costs and streamline processes, promote collaboration and increase productivity.
SCA is having program supply agreements with the Nine, Seven and Ten Networks and it broadcasts 105 television signals into regional Australia which covers all states and territories other than Western Australia. This will make SCA NPC’s largest customer.
To make their employees unaffected by the change, SCA is planning to lease a new office facility in Canberra. Also, SCA is working closely with their affected employees to support them in identifying new opportunities as the transition is completed. SCA is planning to complete the relocation process of the Canberra broadcast playout operation by 30 June 2020.
For the year end 30 June 2018, the company reported revenue from continuing operations of $653 million which was $687 million a year ago. The Earnings per share attributable to the ordinary equity holders of the company diluted was 0.19 cents in FY 2018 which was 14.07 cents a year ago. Net cash inflows from operating activities was $111.9 million in FY 2018 which was $116 million a year ago. Underlying NPAT was $75.3 million and Underlying EPS was 9.79 cents in FY 2018. On 23 August 2018, the company declared dividend of $0.04 per share for six month ended 30 June 2018 which is to be paid on 9 October 2018.
SXL’s Share traded at $1.3 with the market capitalization of $999.72 million as on 26 September 2018 (AEST 2:00 PM).
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