Two stocks that rose on ASX - Nine Entertainment and Spark New Zealand

Nine Entertainment Co Holdings Ltd

NEC Details

· Sale of Southern Cross Media Group Limited stake: Nine Entertainment Co Holdings Ltd (ASX: NEC) stock rose 8.2% on 30^th September 2016 after the company sold its entire 9.99% stake in Southern Cross Media Group Limited at a price of $1.54 per share at a profit. The stake was as acquired in March this year at a price of $1.15 per share. The proceeds would enhance the funds flexibility of the group which could be diverted in executing its growth strategy in the future. However, in April 2016, NEC and Southern Cross had entered into a five-year regional television affiliate agreement which has already brought significant commercial benefits to both the parties and both the parties enjoy great relationships. Meanwhile, NEC stock has fallen 37.7% in the last six months as on 29^th September, 2016.
· Recommendation: We give a “Hold” recommendation on the stock at the current price of – $1.03
 

Spark New Zealand Ltd

SPK Details
· Re-engineering program being completed: Spark New Zealand Ltd (ASX: SPK) stock rose 2.1% on 30^th September 2016. SPK earlier reported for Spark Finance Ltd’s move on issuance of NZ $125m of unsecured, unsubordinated fixed rate bonds. The group reported an EBITDA growth of 2.5% in FY 16 due to the tight ongoing management of cash flow and capital. It is driven by Mobile and IT Services revenue and margin uplift. SPK has completed the four year, $238m re-engineering program to upgrade the key customer service IT systems. The re-based revenue grew 2.5% to $83m due to strong Mobile, IT Services and Broadband performance. The launch of Wireless Broadband is expected to provide further growth and cost reduction in the future. Additionally, for FY 17, SPK expects ordinary dividend of 22 cps and special dividend of 3 cps. The ordinary dividend is expected to be fully imputed and the special dividend is anticipated to be at least 75% imputed. The revenue is expected to grow 0%-3% in FY 17 and the EBITDA excluding potential net gains on sale for Mayoral Drive Carpark estimated at $17m-$19m is expected to be 0%-2%. The earnings per share for FY 17 is expected to be 21 cents compared to 20 cents in FY 16. Accordingly, the stock has risen 7.02% in last six months as on 29^th September, 2016, and has a solid dividend yield.
· Recommendation: We give a “Hold” recommendation on the stock at the current price of – $ $3.43


FY16 Financial Performance (Source: Company Reports)
 

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