Good news in Nine trading update

Stock Exchange trading updates have not generally brought good news lately, but yesterday’s trading update by Nine Entertainment went against that trend.

The company expects a further 10% improvement to its profits than it predicted a month ago.

Nine Radio’s parent company, Nine Entertainment Co held its Annual General Meeting in mid-November, at which time the company said it expected first half EBITDA, before specific items, to be up by around 30%, compared to $251m in the previous corresponding period.

Since this time, trading conditions have continued to improve, with EBITDA before specific items for the six months to 31 December, now expected to be up by more than 40%, on the same basis.

Christmas tv advertising is driving the good news, with Nine’s December quarter now expected to show metro tv ad revenue growth of almost 20% (previously ~15%). Judging by ads heard this month on some of Nine’s radio stations, things are looking good in the radio division too, although it is a much smaller contributor to the company’s bottom line than television.

Nine continues to believe that, given limited visibility of the second half advertising market, it is not in a position to provide guidance on earnings for the full year, and is waiting until its half year results in February to make further predictions on revenue outlook.

Nine shares finished yesterday’s trading at about $2.35. At the beginning of this year Nine Entertainment shares were priced at $1.81, during the year shares dropped to as low as 84c due to the Covid advertising downturn, but they are now well above the two dollar mark as year end approaches, giving the company a market capitalisation of just over $4 billion.




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