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Nine profit up 27pc ahead of Fairfax merger

Roger Balch  |  23 Aug 2018Text size  Decrease  Increase  |  
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Sydney Australia Nine Entertainment merger acquisition media TMT

Nine Entertainment (ASX:NEC) has reported full-year net profit of $156.7 million, a jump of 26.8 per cent on last year’s result, as it prepares for a merger with newspaper publisher Fairfax Media. 

Management also announced a fully-franked final dividend of 5 cents a share. 

Revenue for the year to June 30 was up 6.5 per cent to $1.32 billion on the back of improved ratings performance and growth in its digital businesses. 

“The result itself was within guidance and was well expected," says Morningstar equity analyst Brian Han. 

“They also gave a very solid fiscal 2019 earnings guidance, which suggests not only that the TV advertising market is holding up all but also that Nine is continuing to benefit from their TV ratings momentum. And not having cricket from next year will help their cost base.” 

Both the digital and television divisions reported revenue growth of 7 per cent. 

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Nine's online streaming service, 9Now, grew its registered user base to about 6.5 million; while Stan, the streaming company jointly owned by Nine and Fairfax, recorded more than 1.1 million active subscribers. 

Nine says Stan's revenue growth of 72 per cent and a cost increase of 23 per cent highlights the leverage of the business. 

Stan, along with Fairfax's Domain assets, was a primary motivator for the merger, announced in July. 

In a statement, Nine chief executive Hugh Marks says the merger will enhance both businesses for the benefit of all shareholders. 

"The combined reach of the group's expanded media assets will enable an acceleration in the growth of the Domain business," Marks says. 

"While Nine's ability to invest in and expand what will be Australia's largest news platform –across television, radio, digital and print – is also incredibly exciting." 

The company expects group earnings to be between $280 million and $300 million in the 2018/19 financial year. 

Nine said its Metro TV revenues are currently trading about 1 per cent ahead of same time last year, while core digital advertising revenues are about 15 per cent ahead. 

Full-year figures exclude $53 million of special items, which primarily consist of the profit on the sale of Nine's headquarters in Sydney's north. 

Nine posts healthy profit increase 

  • Net profit up 26.8pc to $156.7m 
  • Revenue up 6.5pc to $1.32b 
  • Final dividend of 5 cents per share

 

Roger Balch is a freelance contributor for Morningstar Australia

© 2018 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.

is a contributor for Morningstar Australia.

© 2021 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'regulated financial advice' under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information, refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Morningstar’s full research reports are the source of any Morningstar Ratings and are available from Morningstar or your adviser. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782. The article is current as at date of publication.

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