Nine Entertainment has cleared away from the rest of the media sector so far as revenue, profits and returns to shareholders are concerned.
And that’s a view shared by investors who chased the shares higher yesterday, sending them up more than 20% at one stage and the company’s market value to $1.44 billion – well ahead of rival Seven with $912 million.
the shares closed at $1.97, up more than 16%.
It’s 2017-18 interim results clear show it is now clearly the best performed Australian media company.
Unlike its rivals, it lifted revenue and profit in its core TV business and slashed debt in the six months to December, as well as lifting dividend.
That was a standout against weak results from rivals such as Fairfax Media, Seven West Media and News Corp/Foxtel.
In its half year report released on Thursday Nine lifted its interim dividend by half a cent to 5 cents a share, not much, but a lot more than the zero at Seven which abandoned its half year payout to shareholders as part of a dramatic escalation of its cost cutting program to $125 million this year and next.
And as well, Nine’s commentary was free to the repeated talk of cost cuts and containment that dominated Seven West’s results on Tuesday and Fairfax Media’s release on Wednesday.
Nine used the final proceeds of the sale of its Sydney HQ to slash net debt to $46.2 million (Seven’s was $711 million) from $177 million.Nine boosted total revenue 9% to $719.6 million, Seven’s fell 10.4% to $809 million,
Nine reported earnings before interest, tax, depreciation and amortisation of $181.3 million, Seven, $176.8 million. Nine’s net profit was reported as $116 million, Seven’s at just over $100 million.
At the core asset – the free to air TV networks, Nine did better – revenue rose 10% to $636 million, Seven’s revenue shrunk 9.6% to $586,7 million. Seven’s earnings before interest and tax rose 3.1% to $147.4 million, Nine said its EBITDA (a different measure) jumped 51% to just on $172 million.
Seven’s decision to drop the dividend and concentrate on cost cutting has seen its shares bounce from around 50 cents to 60 cents this week – a relief rally from investors happy that the attack on debt and costs is now serious.
Nine shares leapt more than 21% yesterday to $2.065. Nine’s shares were last at this level in May, 2015. Seven’s shares rose slightly yesterday to 62.5 cents and are now at levels at the start of 2018.
