Nine posts strong profit growth as it awaits Fairfax takeover approval

Nine CEO Hugh Marks has pushed the benefits of a widespread and broad offering should its merger with Fairfax Media go ahead, after a strong year of financial results.

Fiscal year 2018 saw Nine finish with an interest, tax, depreciation and amortisation increase of 25% from the year prior and a 27% increase in net profit.

Nine returned to black this financial year

Revenue for FY18 was $1.318b, up 6% year on year, while group EBITDA climbed 25% to $257m. Net profit after tax – which excludes specific items – climbed 27% to $157m.

Specific items included the profit on the sales of its Willoughby site, as well as restructuring costs.

“The proposed merger with Fairfax will enhance our ability to continue to grow our business for the benefit of shareholders. The increasing sale of the merged group will expand both our advertising reach and ability to offer innovative solutions, back by data and Nine Galaxy’s platform,” Marks said this morning.

Last week, Fairfax Media reported revenue of $1.688bn for the 2018 financial year, and a net loss after tax of $63.8m. Domain released its own financial results to the ASX, reporting a $6.2m loss in its statutory results, largely due to costs incurred during its separation from Fairfax.

“The combined reach of the group’s expanded media assets will enable an acceleration in the growth of the Domain business. While Nine’s ability to invest in and expand what will be Australia’s largest News platform, across television, radio, digital and print is also incredibly exciting,” Marks added.

More specifically, Nine Network’s revenue climbed 6.7% for the FY18 year to $1.152b as well as a 26.5% increase in EBITDA, to $238.2m.

Nine Digital reported a ‘record’ revenue increase of 7%, which is attributes to growth in long form video and Pedestrian TV and CarAdvice contributions. That growth was despite the decline in display advertising and a lack of contribution from Bing ($14m).

Nine’s FY18 results

Revenue from digital publishing – which includes CarAdvice, Pedestrian TV and Future Women – was up from $119m last year to $125m, an increase of 5%. 9Now – which now claims 6.5m subscribers – saw revenue increase by 89% to $40.8m.

Stan, the subscription video on demand joint venture between Fairfax Media and Nine, saw revenue growth of 72% and a cost increase of 23%.

“The strong operating performance from last year continued across our entire suite of assets. Positive free to air TV ratings momentum combined with our focus on the 25-54  yr demographics is translating to improving revenue share,” Marks added.

“Digital, 9Now is experiencing strong revenue growth and our digital publishing business has reported accelerating growth in premium revenues in line with our strategy.”

Nine is predicting FY19 EBITDA between $280m and $300m.

Market capitalisation sits at $2.08b.


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