Seven West Media Ltd


SWM Details

·       Geographic Expansion: Seven West Media Ltd (ASX: SWM) rose 0.7% on September 12, 2016 while the stock has been consolidating in the last four weeks, falling by over 4.4%. SWM has reported 0.9% fall in underlying net profit after tax (excluding significant items) to $207.3 million for FY16 and the revenue also witnessed a drop. SWM is accelerating the transformation of its business across all platforms while expanding its presence in the creation of content in international markets with an investment in a British drama production company. The group is also expanding the production into New Zealand and is currently progressing several opportunities in other territories. In addition, SWM is focusing on any screen with the launch of live-streaming and rapidly expanding digital portfolio. The stock has risen over 27.27% in the last six months (as on September 09, 2016) while the company has an outstanding dividend yield.

·       Recommendation: Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $0.765
 

FY16 Financial Performance (Source: Company Reports)
 
Southern Cross Media Group Ltd


SXL Details

·       Higher levels:Southern Cross Media Group Ltd (ASX: SXL) stock closed flat post a slight rise on September 12, 2016. Meanwhile, SXL has reported a 5.1% growth in the revenue for FY16 and reported a 19.1% rise in the net profit after tax. SXL made an affiliation agreement with Nine Entertainment, renewed the affiliation agreement with Network Ten for NNSW, and executed long term agreement with the Australian Traffic Network. Moreover, for FY 17, the group expects an EBITDA to be in the range of $177m - $183m which is an increase of 6.0% - 9.0% wherein the first half EBITDA is estimated to be approximate in the range of $92m - $94m. The normalized expense growth will be at circa 3.0% - 4.0% (excl. affiliation and revenue related costs).

·       Recommendation: On the other hand, the above positive triggers have led to the SXL stock rally of over 23.46% in the last six months (as on September 09, 2016) which is now trading close to 52-week high price, and accordingly looks “Expensive” at the current price of $1.50


FY16 Financial Performance (Source: Company Reports)

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