Nine Entertainment shares fall 19 per cent after company issued revenue warning on Friday
Nine Entertainment Co shares as of 10.30am (Source: Google Finance)
Shares in Nine Entertainment Co have fallen nearly 20 per cent in the first 30 minutes of trading this morning after the free-to-air TV network owner issued a profit warning on Friday evening.
In an announcement to the Australian Securities Exchange on Friday Nine (ASX: NEC) said it expected its EBITDA – earnings before interest, tax, depreciation of amortisation – for the current financial year to be around $285m – $290m, down on the expected $311m.
It blamed a “shorter than anticipated” free-to-air advertising market in the second half of the financial year and “particularly soft conditions in May and June” leading to revenue declines for the period for the market as a whole.
Today shares in the company opened at $1.63, after closing at $1.93 on Friday before the announcement to the ASX ahead of the long weekend.
By 10.15am AEST they had fallen as low as $1.53, but rallied slightly to $1.60, 19.65 per cent down on Friday’s price.
Update 12.30pm: As of lunchtime Nine shares had recovered marginally from $1.62 at open, close to a 20 per cent fall, to a 1.62 a 15.3 per cent fall, seeing the market capitalisation of Nine rise from $1.52bn at open to $1.57bn.
Seven West was down 12% on opening too. Tough situation right now for the FTA’s
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yet you can’t buy spots 6 weeks out
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Interesting whether this is part of a structural re-valuation of NEC by the market as the FTA industry goes through its inevitable right sizing, or whether it is being punished in the short term? If NEC isn’t successful winning the NRL I would imagine this would be the start of a much bigger drop in market cap?
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