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Nine focused on "big competitors", not Ten

Simone Ziaziaris  |  24 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Nine Entertainment (ASX: NEC) says its focus is on big competitors rather than "old combats" with rival Ten Network (ASX: TEN), as the troubled broadcaster's shareholders Lachlan Murdoch and Bruce Gordon were cleared to make a joint takeover bid.

Nine chief executive Hugh Marks has welcomed the Australian Competition and Consumer Commission's green light for the bid, saying a healthy network Ten is good for the free-to-air sector and important for the revenue share of the industry.

He said Nine's focus, however, is on future investments for its business in order to withstand threats from bigger competitors such as Facebook and Google.

"These are the things that we are focused on achieving rather than the old combats of whether we are better or worse than Seven or Ten," Mr Marks told investors on Thursday.

"There are bigger competitors over the horizon ... and I think we are working pretty well as an industry now to face the competitive threat."

Nine also announced a $203.4 million full-year loss on the back of writedowns of assets including its free-to-air TV network, previously announced in February.

The broadcaster recorded a total $327.1 million in impairments--up from $311.9 million in the first half--but left the non-cash impairment on goodwill of its TV network unchanged at $260 million.

Total revenue slipped 3 per cent to $1.24 billion but a group-wide 5 per cent reduction in costs helped lift underlying profit 2.7 per cent to $123.6 million.

Nine said ratings performance improved significantly at the start of 2017, after a low in the September quarter, underpinned by its Married at First Sight series.

The Rio Olympics on rival Seven had hit both the size of the advertising market and Nine's share of it in the first half of the year, with TV revenue down 4.4 per cent in the year.

Nine said it was partially due to a soft ad market with the total television ad revenue shrinking by 3.5 per cent in the year, with the metro market declining 3.7 per cent.

It expects TV revenues to grow around 15 per cent in the September quarter, against the Olympic-impacted previous corresponding period, while digital revenues are expected to rise around 8 per cent.

Nine forecast group earnings to be towards the upper end of a $186 million to $207 million range, assuming licence and spectrum fee-related legislation currently before the Federal Senate, is passed.

Nine shares were at a 17-month high at 1305 AEST on Thursday, up 8.25 cents, or 5.5 per cent to $1.56.

COST CUTS HELP NINE HOLD THE LINE IN 2016/17

* Full-year net loss of $203.4m vs profit of $33.2m

* Revenue of $1.24bn vs $1.29bn

* Fully franked final dividend of 5 cents, up from 4 cents previously

 

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