As flagged in our report "Gambling on Licence Fee Cuts for Free-to-Air Broadcasters," published on May 2, the Federal government plans to abolish television licence fees and curb betting advertisements on television screens. The net impact is positive for free-to-air broadcasters, as we estimate fiscal 2018 EBITDA uplift of 10% for Nine Network, 8% for Seven West Media, and a three-fold-plus increase for Ten Network given the marginal estimated profit. However, we are maintaining our fair value ...
Odds are shortening that licence fee relief will be included in the Federal budget on May 9. The government can only take so much haranguing from the no-moat-rated free-to-air television networks, especially as the 3.375% impost on gross broadcast revenue is undeniably higher than most other countries. Even more undeniable is the fact that free-to-air television's share of the advertising pie in Australia has slumped from 32% a decade ago to just 24% currently, reducing industry EBITDA margin fr...
Nine is our preferred stock in the television sector. Despite rising 22% since the February result, shares remain at a 21% discount to our AUD 1.50 fair value estimate. Nine has enjoyed a solid start to 2017, especially in February when its All-People rating share jumped to 36.2%, from 33.3% a year ago. While we can fathom the popularity of cricket, the positive reception to "Married at First Sight" shows just how out of touch this author is when it comes to judging television shows. The ratings...
Nine is our preferred stock in the television sector. Despite rising 22% since the February result, shares remain at a 21% discount to our AUD 1.50 fair value estimate. Nine has enjoyed a solid start to 2017, especially in February when its All-People rating share jumped to 36.2%, from 33.3% a year ago. While we can fathom the popularity of cricket, the positive reception to "Married at First Sight" shows just how out of touch this author is when it comes to judging television shows. The ratings...
The potential reduction (or even abolition) of television licence fees may temporarily lift free-to-air television broadcasters' earnings. However, we do not see the positive impact being sustained longer term to impact their fair value estimates. It is true that Australia's television licence impost is relatively high. Prior to the 2016 reduction, the 4.5% (of gross television revenue) imposed on the broadcasters dwarfed those in New Zealand, the United Kingdom and the United States. Even the c...
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
We believe Southern Cross Media's recent result provided a glimpse into Ten Network's earnings recovery potential. In the June-half of 2016, Southern Cross' audience share in its Ten-affiliated markets increased 120 basis points year on year to 22.7%, fuelled by the Ten Network's program ratings resurgence. This led to a 200 basis point jump in Southern Cross' revenue share of these regional television markets in the half to 22.7%, showing the significant top-line leverage that can accrue from a...
Heading into the fiscal 2016 result, shares in no moat-rated Ten Network were always vulnerable to a retracement, having surged almost 60% since late June. The AUD 156.8 million net loss for the year ended August 2016 (including another AUD 125.3 million in impairments and charges) certainly provided ammunition for profit-taking, as did the moderately disappointing AUD 3.4 million in EBITDA. Ten is at an inflexion point. A return to sustainable profitability was never going to be a smooth journe...
We believe Southern Cross Media's recent result provided a glimpse into Ten Network's earnings recovery potential. In the June-half of 2016, Southern Cross' audience share in its Ten-affiliated markets increased 120 basis points year on year to 22.7%, fuelled by the Ten Network's program ratings resurgence. This led to a 200 basis point jump in Southern Cross' revenue share of these regional television markets in the half to 22.7%, showing the significant top-line leverage that can accrue from a...
Britain has voted to leave the European Union. The economic and market implications are likely to be far-ranging. What we do know is that, in times of risk-averse behaviour, cyclical sectors tend to be hardest hit. Media is one such sector given its dependence on advertising and marketing--two activities likely to take a back seat as corporate confidence and economic activity suffer. In direct earnings terms, Brexit has little impact on Australian and New Zealand media companies under our cover...
Britain has voted to leave the European Union. The economic and market implications are likely to be far-ranging. What we do know is that, in times of risk-averse behaviour, cyclical sectors tend to be hardest hit. Media is one such sector given its dependence on advertising and marketing--two activities likely to take a back seat as corporate confidence and economic activity suffer. In direct earnings terms, Brexit has little impact on Australian and New Zealand media companies under our cover...
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