Fairfax Media Limited

FXJ Details
 
Implemented the scheme of arrangement:Fairfax Media Limited (ASX: FXJ) had implemented the scheme of arrangement for the separation of Domain Holdings Australia Limited from FXJ, after getting the approval from the Federal Court of Australia. Domain Shares commenced trading on a normal settlement basis from 23 November 2017. On the other hand, FXJ had posted FY18 year-to-date overall group revenues of 4% to 5% below last year. For FY18, Domain’s costs are expected to rise approximately 13% from FY17 figure of $206 million (10% like for like excluding acquisitions), excluding any separation-related costs and adjustments. However, FXJ will continue to implement cost savings measures for managing performance. Meanwhile, FXJ stock has risen 21.92% in three months as on December 08, 2017. In FY17, FXJ had posted stable earnings despite challenging conditions in media sector. We give a “Hold” recommendation on the stock at the current price of $0.765


FXJ Daily Chart (Source: Thomson Reuters)
 

Nine Entertainment Co Holdings Limited

NEC Details
 
FY18 Outlook:  Nine Entertainment Co Holdings Limited (ASX: NEC) expects its Digital business FY18 EBITDA to be at the upper end of the range of analysts’ forecasts of $186m to $207m. In Digital, NEC is expecting encouraging growth in 9Now streams and revenues, and this will help to offset the weakness in digital display advertising. Moreover, FY18 dividend will be around 9.5 cents, consistent with FY17. From FY19, NEC expects dividends to be in the 50-70% of NPAT range.
 

FY17 Financial Performance (Source: Company Reports)
 
Additionally, NEC’s main channel in prime time is expected to win the survey year across all key demographics, including Total People. Network prime time ratings share for the survey year in the targeted 25-54s of 37.2 points has been said to be up 2.5 points on last year, which is again number one in this demographic strengthening the company to continue to grow the revenue share in 2018. Meanwhile, NEC stock has risen 13.52% in three months as on December 08, 2017. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $1.60


NEC Daily Chart (Source: Thomson Reuters)
 

oOh!Media Limited

OML Details
 
FY17 Guidance Reaffirmed:oOh!Media Limited’s (ASX: OML) General Counsel and Company Secretary, Ms Kate Eastoe , has tendered resignation to pursue new opportunities. Ms Eastoe will be with OML until 20^th of February 2018. Moreover, OML has reaffirmed the FY17 guidance, and expects EBITDA of $88-$92m and capex spend of $35-40m for FY17.
 

1H 17 Financial Performance (Source: Company Reports)
 
Additionally, in the first half, for the first time, more than half of group revenue was derived from digital assets. The company has integrated the three acquisitions made during the second half of 2016. In the 1H 2017, the operating expenditure grew with 50% of the increase from the acquisitions. The company has incurred $2.0 million of cost relating to the terminated APO merger. In addition, the Out of Home sector is expected to grow despite mixed performance of other media sector stocks. The company has maintained dividend pay-out policy of 40-60% of NPATA. However, OML stock is trading at a high level and looks “Expensive” at the current price of $4.42


OML Daily Chart (Source: Thomson Reuters)
 

Seven West Media Limited

SWM Details
 
Partnership with Newzulu:Seven West Media Limited (ASX: SWM) has bagged a new partnership with Newzulu Limited to build a new app that will allow SWM to harness the power of their live audiences by collecting user-generated content at the largest sporting events for which they have broadcast rights. SWM will widely promote the app throughout their “Summer of Sport” beginning with the December 26^th launch of Seven’s coverage of the Sydney to Hobart Yacht Race and running through April to include the Australian Open Tennis, the Olympic Winter Games and the Gold Coast 2018 Commonwealth Games. The new free 7branded app will allow the company’s audiences to share their experiences whist watching live free Premium sport, right across the screens of Seven. Moreover, over the last two years SWM has progressively taken control of the key digital assets across the company. These owned and operated products have delivered 100% revenue growth to approximately $40 million in FY17. Additionally, SWM in FY18 expects the underlying EBIT to be in the range of $220m to $240m. On the other hand, SWM stock has fallen 10.79% in three months as on December 08, 2017. Given the low levels and yet to be realised potential through new partnership, we give a “Buy” recommendation on the stock at the current price of $0.615


SWM Daily Chart (Source: Thomson Reuters)

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