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Australian media and marketing companies punished in an unforgiving year for stocks

Australian media and marketing stocks were not immune from the ASX's travails in 2018. Mumbrella's Paul Wallbank looks at which stocks delivered the best, and worst, results for investors over the year.

Alan Jones and John Singleton are among the few fortunate investors in a disappointing year for listed Australian media and marketing companies with Macquarie Radio Network leading the sector in 2018.

The majority Nine-owned network recorded a gain of 36% and was only one of five companies in the sector to beat the ASX All-Ordinaries Index, which itself fell  7% in year where companies were punished for underperformance and executive dysfunction.

How Australian media companies performed in 2018 (Click to enlarge)

Nine itself was punished by the market for its Fairfax acquisition, after being the best performing stock of the 2018 financial year, having peaked at $2.66 in mid-May and recording an 80% gain over the period.

“The day before the announcement of the Fairfax acquisition, Nine’s stock closed at $2.51. After the deal was announced the share price fell 6c. Over the rest of the year, the stock shed 51% of its value”

Despite Nine’s reversal in fortunes during the year, the network slightly outperformed its peer Seven West Media which fell 10.57%. Prime and Southern Cross recorded drops of 23.2% and 14.5% respectively.

Fairfax itself fell 17.5% for the year before it was delisted as part of the Nine acquisition in December, while Domain, which started the year badly with the abrupt departure of CEO Antony Catalano, saw its shares slump in October to finish the year with a 35% drop. Rival REA Group outperformed the general index with a 3.5% fall.

Macquarie saw its stock price jump in August with a 24% jump in profit, despite the network’s struggles with its Talking Lifestyle stations which saw them rebranded to a sports radio format in March.

Jones owns 1.27% of Macquarie Media, while Singleton has around a 32% stake.

Enero’s CEO Matthew Melhuish oversaw the company’s 372% profit jump

Enero, the former Photon group, was also rewarded by the stock market with an 11% gain after announcing a 372% profit jump in August. It was the one bright spot across Australian holding companies.

WPP AUNZ paid a high price for its instability and underperformance with a 39.36% fall following its majority stakeholder, WPP Plc, ousting founder Sir Martin Sorrell in April and the resignation of local CEO,  Mike Connaghan, in October following a shock earnings downgrade which saw the Australian group’s shares collapse.

Newly listed group GrowthOps, the operating company which now oversees creative agency AJF Partnership and a number of marketing and technology outfits including Khemistry and Voodoo Creative, finished the year down 34% after listing in March at $1.22.

RXP, owner of The Works and various technology companies, dropped nearly 31% for the year after announcing in March the group would restructure to address its underperformance.

Tech company Pureprofile suffered for its year of turmoil being 2018’s second worst performing share in the sector with a nearly 60% fall despite appointing Nic Jones as CEO at the end of 2017 and founder Paul Chan leaving the business in February.

Isentia’s dismissal of John Croll in February didn’t save the market intelligence firm from being the year’s poorest performing stock with an 80% fall over the year. Over the 2018 financial year the beleaguered company suffered a 67% decline.

Acquisitions however were not all bad news, with APN Outdoor being the second highest gain, picking up over 35% on the ASX before its takeover by French giant JC Decaux in October, justifying the then-CEO James Warburton’s description of the deal as an “excellent outcome”. 

Not so fortunate in the outdoor sector were QMS which saw its shares fall 15% and Ooh Media, whose acquisition of Adshel didn’t help it avoid a nearly 21% drop.

HT&E’s disposal of Adshel didn’t impress the market either with the company seeing a 15.51% drop.

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