Nine Entertainment Co will match its rival Seven West Media in buying back up to 10% of its shares but, unlike Kerry Stokes’ 40%-owned media arm, Nine will also pay its shareholders a dividend – a record dividend at that.
Nine’s largesse was revealed in its 2021-22 results on Thursday which said continuing growth in subscriptions and a buoyant advertising market helped lift net profit by 35% to $315 million.
The company reported a 15% improvement in revenue for the 2022 financial year of $2.688 billion. Group earnings before interest, tax, depreciation and amortisation were up 24% to $700.7 million (a margin of more than 25%).
Nine will pay a fully franked final dividend of 7 cents share bringing the full-year dividend to 14 cents share (the highest since it listed on the ASX in late 2013) and up around a third from 2020-21.
The company also announced plans to buy back up to 10% of its issued shares as did Seven West media did earlier this month. But Seven again failed to pay shareholders a dividend.
And that news saw the shares leap 9% to $2.18 yesterday.
Nine also provided full-time employees who are not on an incentive scheme with a ‘recognition bonus’ earlier this month (this wasn’t explained).
Recently-installed CEO Mike Sneesby said Nine was positioned to weather uncertain economic conditions as he announced plans to buy back up to 10% of shares on issue.
“Whilst broader economic factors are beginning to impact some areas of the market, Nine’s strong competitive position and balance sheet stands us in good stead,” Sneesby said.
“We have successfully diversified our earnings base with more than 30 per cent of our revenue now from subscription and licensing.”
Nine reported increased revenue and profit across all divisions the year to June.
This was driven by strong advertising market conditions, increased subscriptions and millions of dollars in licensing fees from tech giants Google and Meta. The result was a record for the broadcast and publishing businesses, which reported EBITDA growth of 21% and 53% respectively.
Nine is forecasting group EBITDA of $380 million to $400 million for the first half of the current financial year. It did not provide cost guidance.
