A Strong Year for Nine Entertainment Share Price

2017 proved to be a pivotal year for Nine Entertainment [ASX:NEC], with the TV broadcasting company leading the way in metropolitan advertising revenue share for the first time since 2005.

Nine posted half-year results this morning, highlighting a 9% increase in revenue, a 61% rise in earnings before interest and tax, and a 55% increase in basic earnings per share.

The impressive results had Nine’s share price up 17.11% at time of writing, up to $1.98 per share.

Debt was reduced from $177.5 million over the year to $46.2 million, taking the firms leverage ratio down to 0.2x EBITDA (earnings before interest, taxes, depreciation, and amortisation).

Nine’s Digital Growth

Nine’s streaming platform 9NOW saw an 80% increase in streaming through the first half of FY18, while Stan’s subscription revenue increased by 83%. Stan’s active subscribers amounted to around 930,000.

Nine CEO Hugh Marks said:

This was a strong half for Nine, across our entire business. Positive Free To Air TV ratings momentum combined with our focus on the 25 to 54 yr demographics is translating to improving revenue share.

He went on to remark that Stan is approaching break-even on its initial investment, and is expecting further consolidation of its leading position in the local market.

Nine’s best performing television show was Australian Ninja Warrior, aggregating around two million views across all platforms.

Future plans for Nine Entertainment

The company expects positive momentum to continue through to FY19 based on solid foundations that have been established over the past year and a half. Revenue share growth remains possible through Nine’s free to air business, and the competitive cost environment for content remains neutral.

The group claims Stan is becoming an increasingly significant value driver, which is an encouraging sign in a market largely dominated by Netflix.

Since this time last year, Nine Entertainment’s stock price has seen a dramatic 106.25% rise.


Ryan Dinse                                                      

Editor, Money Morning


Jack Cameron,                           

Junior Analyst, Money Morning

PS: Miss your chance to buy into Nine early last year? We’ve recently written a report on the four best ASX stocks for 2018. Check it out here.

Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle.

Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.

Ryan's premium publications include:

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