The Macquarie conference also heard upgrades from two of our major locally listed media groups, Seven West Media and Nine Entertainment, with both forecasting strong rises in earnings for the June full financial year.
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Nine Entertainment says it expects 2021-22 earnings before interest tax depreciation and amortisation (EBITDA) to be up more than 22% above 2020-21’s $565 million.
That would see EBITDA head close to $700 million for the year. EBITDA for the six months to December was up 15% to $406 million.
CEO, Mike Sneesby told the Macquarie conference that most of the business was doing much better – radio was a bit flat and the Stan streaming video services was investing heavily in new areas, led by sport.
He said the TV ad market remains strong while the number of the company’s its digital subscribers and digital revenues continues to rise.
In the full year to June, Nine expects total TV EBITDA growth of more than 20%, while 9Now revenue growth is expected to be close to 40%.
Its publishing saw digital subscription revenue grow in the low double-digits. “Ad markets remain buoyant. 2021-22 publishing EBITDA growth (on 2020-21) is expected to be $55 million or higher,” Nine said.
Nine continues to gain share in a recovering ad market for radio and its radio revenue is expected to grow by 6% in the March quarter, while the Radio EBITDA in current June half is expected to be higher than in the December half year.
For its Stan streaming service didn’t provide a subscriber figure but said the second half EBITDA will be lower because of “timing of content investments particular in sport”. EBITDA for the year is forecast to be $25 to $30 million for the year to June. Stan though “continues to see strong earnings momentum.”
Nine’s real estate listing arm, Domain provided an update on Tuesday to the Macquarie conference which revealed a solid March quarter performance.
Nine shares edged up 0.7% to $2.59.
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Seven West Media CEO James Warburton revealed an uptick in the forecast earnings for the 2021-22 financial year of around $10 million on the previous forecast but more than 30% on the actual 2020-21 figure.
The presentation to the Macquarie conference included a trading update that upgrades SWM’s expectations for earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2021-22 financial year from the previous guidance of between $315 million and $325 million to between $335 million and $340 million.
Mr Warburton said: “The earnings upgrade reflects the strength of advertising markets and the ongoing success of Seven’s broadcast and digital businesses.
“The recent acquisition of Prime Media Group, coupled with the winning performance of the Seven broadcast television business and the strong growth of 7plus, make SWM the undisputed leader in the national total television market – a position that we plan to build on in the future.”
The new EBITDA forecast of between $335 million and $340 million could be more than $80 million more than the $254 million in the year to June, 2021– an increase of more than 30%. (At a proforma level, the increase is about 38%, or 33% ex-Prime.)
Seven West shares fell 2.3 cents to 64 cents – it seems some investors were looking for a bit more, perhaps even news of a resumption of dividends.
