Nine Ent Co Posts $144.2m Net Profit

Nine Ent Co Posts $144.2m Net Profit
SHARE
THIS



Nine Entertainment Co.  has released the company’s final results for the 2014 financial year.

The company posted a $144.2m net profit with the the key points from the results:

  • Underlying Metro FTA advertising market growth of c2.5% (after adjusting for non-cash contra) in line with Forecast, whilst Regional FTA markets were flat
  • Nine Network Metro FTA market revenue share continued to improve – growing from 37.9% to 38.7% over the year, favourable to the Forecast of 38.4%
  • Solid first half of the 2014 FTA ratings year, retaining leadership in all key advertising demographics
  • Integration of Nine Adelaide and Nine Perth on track, with gap to East Coast narrowing
  • Record result for Nine Live with strong contributions from each of its principal business lines
  • Digital transition and evolution continuing following 100% acquisition of Mi9
  • Closing Net Debt of $537m and conservative Net Leverage of 1.7X

David Gyngell, chief executive officer of Nine Entertainment Co. said: “I am pleased with our performance in FY14 – we have exceeded our Prospectus forecasts across the board, and we are making good operational progress across each of our television, live and digital businesses. Following the completion of the IPO and subsequent debt refinancing, we have a very strong balance sheet with significant flexibility.

In what was an increasingly difficult advertising market, Nine continued its positive momentum, gaining ratings and revenue share across the year and retaining ratings leadership in all key advertiser demographics. Initiatives like the one hour News, added to our strong sport and drama line up and the overall consistency of our schedule, stand us in good stead to continue to drive towards our 40% revenue share target by the end of 2015.

The evolving integration of our leading television and digital businesses will differentiate us from our peers as will the significant and unique cross business opportunities opened up by the expansion of our Nine Live business.

While the more recent advertising environment has been challenging, we are focused on improving the things we can control and enhancing our relative positioning through market leadership, consistency, and innovation.”

On a Statutory Reported basis, Net Profit after Tax decreased from a profit of $1,201m to a profit of $58m. Statutory Reported results in the current and prior year were impacted by a number of one-off significant items, acquisitions, divestments and a recapitalisation of the Company’s balance sheet. This discussion therefore focuses on the Pro Forma results, which adjust for acquisitions and divestments, listed company costs, IPO and other one-off impacts, to provide a like-for-like comparison of underlying results year-on-year, on a basis consistent with that used for the Forecast.

Compared with FY13, Pro Forma Revenue increased 5.7% to $1,578m, Group EBITDA increased 4.7% to $311m and Pro Forma Net Profit after Tax increased from $137m to $144m. Each of these key metrics exceeded the Pro Forma Forecast.

Pro Forma Operating Free Cash Flow of $272m was up 16% on the prior corresponding period and 17% on Forecast.

The 4.2 cents per share dividend is 2.5% ahead of Forecast. This dividend, which is unfranked, is payable on 17 October 2014.

Net Debt at 30 June 2014 of $537m was down $64m from the 30 June 2013 Pro Forma despite approximately $36m of cash costs incurred closing out the previous debt facility in late June 2014. Net Leverage of 1.7 times compares favourably with the 30 June 2013 Pro Forma of 2.0 times and provides the Company with significant financial flexibility.

Compared with the prior year, Nine Network recorded EBITDA growth of 9.3% to $242m on Revenue of $1,228m, up 4.3% on a like-for-like basis. EBITDA was up 1.6% on Forecast on Revenue which fell $4m short of Forecast, due to weaker than anticipated regional markets and softer low margin non-advertising revenues.

After a solid rebound in the December half, when the Metro FTA advertising market grew by 5%, the June half was more subdued. Uncertainty relating to the 2014 Federal Budget saw a significant softening in the advertising market with the Metro FTA market growing just 1.7% in the second half. After adjusting for an increase in contra under new sport contracts, which is estimated to have contributed around 1.0 percentage point of market growth, the underlying FY14 Metro FTA advertising market is estimated to have grown c2.5% over the year, in line with Forecast.

Nine Network’s Metro FTA revenue share of 38.7% over the year was up 0.8 percentage points on the prior corresponding period, and was 0.3 percentage points above Forecast. Regional markets recorded overall TV advertising revenue which was flat on FY13 which muted overall growth.

Nine remained Australia’s most watched television network in the key 25-54, 18-49 and 16-39 age demographics, reporting audience share growth across all key demographics, as well as All People in FY14.

Over the year, Nine Network’s costs increased by $30m reflecting a full year of the step up in costs from the new 5 year contracts for the NRL and Cricket, as well as incremental investment in News and local programming, partially offset by the saving of Olympic costs from the prior year. Costs were however c$8m below Forecast, despite the increased News investment.

Nine Live reported EBITDA growth of 19% to $68m on Revenue of $228m, up 36% on the prior year. Revenue was $16m above Forecast, predominantly driven by Nine Touring and Events, while EBITDA was approximately $1m ahead of Forecast. All of the principal Live businesses contributed to this growth.

Ticketek, which accounts for the majority of Nine Live’s revenues, delivered a 7% increase in ticket sales volumes for the year, coupled with a 2.5% increase in average revenue per ticket. During the year, Ticketek renewed a number of key ticketing agency contracts including the Melbourne Olympic Park Trust, Melbourne Cricket Ground and ANZ Stadium.

Allphones Arena recorded a significantly improved performance for the year following a particularly soft prior year, with total attendances increasing by more than 50%. Higher attendances drove improvements across all related revenue streams.

The Nine Touring and Events business continued to grow in its second full year of operation, with the successful One Direction, Keith Urban and Ricky Martin tours, all in the first half, contributing much of its result, and demonstrating the benefits of integration across the Company’s different business units. The growth in the Nine Touring and Events business, which is at a markedly lower margin than the core ticketing business, was the main contributor to the decline in the overall Nine Live margin to 29.9%.

On an Underlying basis, Nine Digital recorded 7% revenue growth, which was driven primarily by a 90% lift in search revenues and a 28% increase in video revenues offset by lower display advertising revenue reflecting the continued fragmentation of the online display market. The EBITDA decline of 15% on an Underlying basis reflects an evolving change in mix to lower margin third party inventory and the impact of incremental product investment costs required to mitigate the impact of upcoming audience reduction from the Microsoft changes.
Certain changes to the operation of the Digital business will occur through the balance of calendar 2014 which will result in a reduction of web traffic to the Mi9 site, amongst other things. The Company continues to consider the $15.6m Pro Forma EBITDA run rate as reported in the Prospectus to be a realistic assessment of the new baseline results of this business following these changes.
Operating Free Cash Flow improved 16% on FY13 and was $39m or 17% favourable to Forecast. As anticipated, much of the first half outperformance was reversed in the second half as the benefits of the favourable timing of certain sport and local production payments unwound. Nevertheless, Operating Free Cash Flow Conversion improved 8.6 percentage points over the year to 87%, 11.1 percentage points favourable to Forecast.

As at 30 June 2014, Net Debt of $537m equated to Net Leverage of 1.7X. The Company’s debt facilities were refinanced in June 2014. These new facilities, with a maturity of 4-5 years, will reduce the Company’s cash interest expense by c$20m pa (assuming Net Debt remains broadly unchanged), provide increased operating flexibility and significant undrawn capacity. The Company’s comparatively modest leverage means it is well positioned to manage through economic cycles and/or take advantage of any strategic opportunities which might arise.

Dividend

The company will pay a final dividend of 4.2 cents, unfranked, on 17 October 2014, which is marginally ahead of the 4.1 cents forecast in the Prospectus.

The dividend will have exempting credits attached such that the exempting percentage of the dividend is 100%. The exempting credits will only provide an imputation benefit (in terms of no dividend withholding tax) to certain foreign resident shareholders who held more than 5% of NEC’s shares prior to the IPO and continue to hold more than 5% of NEC’s shares at the time the dividend is paid. The exempting credits attached to the dividend do not provide a tax offset for Australian resident shareholders. Individual shareholders should seek their own professional advice as to their eligibility to utilise these exempting credits.

Current trading environment and outlook

The Metro FTA advertising market has been soft since April, and has struggled to recover from the uncertainty leading into and following the Federal Budget. Exacerbated by Federal Election spending which boosted the market in 2013, it looks likely that the Metro FTA advertising market will be down 5 – 10% on the prior corresponding period in the September quarter. Against this backdrop, the Company remains confident of its FTA share performance and momentum and continues to target a 40% advertising revenue share by the end of calendar 2015.

The Live business continues to explore opportunities to build on the solid foundations of Ticketek and Allphones Arena. The recent announcement of its expansion into the promotion of international sporting events and a strong pipeline of developing touring and events opportunities will help to maintain the long term growth profile of this business.

FY15 will be a period of transition for Nine Digital, with a number of changes to the structure and operations of the business implemented across the year. The Company remains confident that the Pro Forma estimated result for the year to June 2014 included in the Prospectus is a representative baseline from which the business will grow. Since its launch, Daily Mail Australia (a 50/50 joint venture with Daily Mail Group) has grown to become the #5 most visited news website in the country and with its positive momentum, is well on track to achieve its target of becoming #1.

In light of the soft FTA market over the first quarter of the new financial year, first half results are likely to be subdued, although mitigated to some extent by the benefit of the annualised $20m savings on the Company’s interest costs following its debt refinancing late in FY14.

Latest News

Pac Mags’ Emily Sak Joins Shopper Media Group As Its First Data & Insights Chief
  • Marketing
  • Media

Pac Mags’ Emily Sak Joins Shopper Media Group As Its First Data & Insights Chief

Digital retail out-of-home media business Shopper Media Group has announced the appointment of Emily Sak to the newly created position of head of data and insights. The new role forms part of Shopper Media Group’s expansion plan to keep up with the accelerated growth that has seen its portfolio surpass more than 220 shopping centres […]

CX Lavender Appoints Business Development Director For Melbourne
  • Marketing

CX Lavender Appoints Business Development Director For Melbourne

Customer experience agency CX Lavender has announced the appointment of Michael Rummery to the role of business development director for Melbourne. Rummery (pictured above) was previously account director of client services at global marketing and digital recruitment firm Aquent, and has held roles at a number of talent agents and recruitment firms with a focus […]

GQ Australia Announces Gentlemen’s Ball To Celebrate 20 Year Anniversary
  • Marketing
  • Media

GQ Australia Announces Gentlemen’s Ball To Celebrate 20 Year Anniversary

News Prestige Network’s editorial director of GQ Australia, Vogue Australia and Vogue Living Edwina McCann today announced the inaugural GQ Gentlemen’s Ball launching as part of GQ Australia’s 20th anniversary celebrations. Presented in partnership with Penfolds Max’s, the event will be held at The Ormond Collective in Melbourne on Saturday 28 April. McCann said: “GQ […]

Grapeshot Serves Up ‘Compliance Cocktails’ To Ready Industry For GDPR
  • Advertising

Grapeshot Serves Up ‘Compliance Cocktails’ To Ready Industry For GDPR

The introduction of General Data Protection Regulation (GDPR) has been shaking up the industry with its specific requirements around how businesses collect, use and store consumer data. Just one month before GDPR takes effect, the global contextual intelligence company Grapeshot hosted a series of GDPR roadshows including ‘Beat the Breach’ breakfast sessions in Melbourne and Brisbane […]

The New York Times Appoints WeThinkMedia As Its Aussie Advertising Rep
  • Advertising
  • Media

The New York Times Appoints WeThinkMedia As Its Aussie Advertising Rep

The New York Times Company has announced the appointment of media representation agency WeThinkMedia to represent its advertising business in Australia. WeThinkMedia will be responsible for all advertising in the region, including print, digital, branded content, programmatic, and events. The partnership will be overseen by Tom Armstrong, vice president of advertising for The New York […]

Medibank Evolves ‘What Is Better’ Brand Platform With Fresh Campaign
  • Advertising
  • Campaigns
  • Marketing

Medibank Evolves ‘What Is Better’ Brand Platform With Fresh Campaign

Insurance firm Medibank has unveiled the evolution of its ‘What is Better’ brand platform, as it continues to challenge what ‘better’ means when it comes to health. The latest campaign goes live today in line with the announcement of Medibank at Home – a program which seeks to improve members’ quality of life by providing […]

Infographic: 10 Marketing Lessons From Apple
  • Marketing

Infographic: 10 Marketing Lessons From Apple

There’s no doubt that Apple is among the best companies in the world when it comes to marketing its products and services – and has been for some time. Well, the peeps at The Website Group have kindly put together a handy infographic so you can learn just how Apple has marketed itself to become […]

by B&T Magazine

B&T Magazine
The Future Of Influencer Marketing: More Than Just A One-Night Stand
  • Marketing
  • Opinion

The Future Of Influencer Marketing: More Than Just A One-Night Stand

Influencers are the new powerhouses in driving stock off shelves, but brands are yet to find the right recipe for successful collaboration, according to Gleam Futures’ Guillaume Deront (pictured below). Here, she argues that marketers need to look beyond purely targeting an audience and channel their energy towards building long-term collaborative relationships. Australia punches above […]

Opinion

by B&T Magazine

B&T Magazine
Designing Cultural And Organisational Change
  • Opinion

Designing Cultural And Organisational Change

In this guest post, Bronwyn Van Der Merwe (pictured below), managing director of Fjord Australia and New Zealand (part of Accenture Interactive), details the four traits of a ‘living business’ – something she believes organisations have to become in order to transform successfully. The digital age has created a plethora of challenges for modern organisations, […]

Opinion

by B&T Magazine

B&T Magazine
Digital Breadcrumbs: Picking Up The Pieces Your Competitors Leave Online
  • Opinion

Digital Breadcrumbs: Picking Up The Pieces Your Competitors Leave Online

In this guest column, Meltwater’s area director, David Hickey (pictured below), says a quick glance at the mountains of data your competitors are producing can fast prove a boon for your business too… It’s time for businesses to start paying attention and embrace the new digital reality we’re living in. We are currently in the […]

Opinion

by David Hickey

David Hickey
“The Rock” Leads a Flotilla Of Athletes In Huge Under Armour Campaign
  • Campaigns

“The Rock” Leads a Flotilla Of Athletes In Huge Under Armour Campaign

US sportswear giant Under Armour has enlisted Dwayne “The Rock” Johnson to front a series of inspirational new ads featuring a host of sport stars and fitness icons. Created by Droga 5 the campaign is called “Will finds a way” and includes eight ads in all. Johnson aside, the spots include actress and martial arts star, Zoe Zhang. Fellow […]

by B&T Magazine

B&T Magazine
Facebook founder and CEO Mark Zuckerberg arrives to testify during a Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee joint hearing about Facebook on Capitol Hill in Washington, DC, April 10, 2018. / AFP PHOTO / SAUL LOEB        (Photo credit should read SAUL LOEB/AFP/Getty Images)
  • Media

Free TV Calls For ACCC Oversight Of Facebook & Google

In a submission lodged with the ACCC inquiry into digital platforms, industry body Free TV today called for greater regulatory oversight of Facebook and Google. The FreeTV submission identifies a number of key areas of concern: Heavy regulation on traditional media providers and almost none on Facebook and Google Questionable claims about the reach, viewability, […]

APN Outdoor Confirms Retention Of Three Key Contracts
  • Media

APN Outdoor Confirms Retention Of Three Key Contracts

APN Outdoor has used its annual general meeting to announce three key contract renewals: Transport for Brisbane, Transdev Melbourne and Adelaide & Parafield Airports, for multiple years. Company CEO and managing director, James Warburton, said: “These contracts represent an important part of our advertising offering. The far-reaching impact they provide delivers a compelling proposition and cements our commitment […]

Women In Media Profile: Olivia Warren
  • Media

Women In Media Profile: Olivia Warren

It's the latest in our Women In Media profiles, and this one is so good you'll possibly get a nervous twitch somewhere.

by B&T Magazine

B&T Magazine
LIDA Delivers Series Of Animated Info Bites For Busy Marketers
  • Marketing
  • Media

LIDA Delivers Series Of Animated Info Bites For Busy Marketers

M&C Saatchi Group’s customer engagement specialist agency, LIDA, has crafted an initial eight-episode series of bite-sized animated videos designed to help busy marketers stay ahead of the game. ‘60 Second Gets’ draws on LIDA’s wealth of experience to unpack the latest industry tools, tech and thinking. Launching today, the first video, ‘Success in 6 Seconds’, […]

Naked And Gidget Foundation Want Australians To Start Talking
  • Campaigns

Naked And Gidget Foundation Want Australians To Start Talking

Today Naked launches its ‘Start Talking’ campaign for Gidget Foundation Australia; a not-for-profit that provides support for families who are affected by perinatal depression and anxiety (PNDA). The centrepiece of the campaign is a powerful TVC that brings to life this common, but often hidden illness, and shows how Gidget Foundation’s ‘Start Talking’ telehealth program […]

MKTG Integrates Telstra Tracker Data With LED Signage At AFL Stadiums
  • Marketing
  • Technology

MKTG Integrates Telstra Tracker Data With LED Signage At AFL Stadiums

For the first time ever, AFL spectators will be able to view real-time Telstra Tracker player data via in-stadium LED signage, thanks to the combined efforts of Telstra, Champion Data and MKTG. By integrating the Telstra Tracker data into the LED signage at the MCG and Etihad Stadium, fans will receive contextually relevant information from […]

Westfield Shows Off New Visual Identity In Line With Fresh Digital Offering
  • Marketing

Westfield Shows Off New Visual Identity In Line With Fresh Digital Offering

Scentre Group has unveiled a new brand look and feel coinciding with the re-launch of the Westfield.com.au and Westfield.co.nz sites. This digital-first visual identity sees a shift towards creating a more contemporary, invigorated and colourful brand, reflective of Westfield’s in-centre experience. The iconic Westfield logo will continue to lead brand communications, supported with a new […]

The Age Of The Ephemeral: Why Experiential Marketing Is Compulsory This Year
  • Marketing
  • Opinion

The Age Of The Ephemeral: Why Experiential Marketing Is Compulsory This Year

In this guest post, Keep Left’s head of consumer engagement, Johanna Murray (pictured below), explains the merits of experiential marketing, as well as sharing some tips on how to do it – and do it well. Humans love to label things – especially intangible things, like time. We like eras and ages and eons because they […]

Opinion

by B&T Magazine

B&T Magazine
The Top Social Media Marketing Trends For 2018
  • Advertising
  • Marketing
  • Technology

The Top Social Media Marketing Trends For 2018

This trends report is a must-read for all marketers, although it contains no news on the return of the bubble perm.

by B&T Magazine

B&T Magazine
How To Give And Take Feedback At Work
  • Opinion

How To Give And Take Feedback At Work

Georgia Murch (pictured below) is an expert in creating feedback cultures and author of Feedback Flow; The Ultimate Illustrated Guide to Embed Change in 90 Days. In this guest post, Murch offers her tips on giving (and receiving) feedback from colleagues without botching it up… We all know that feedback matters.  Most of us want the good, the bad and the […]

Opinion

by B&T Magazine

B&T Magazine
Dentsu X Expands Operations To Sydney
  • Advertising
  • Media

Dentsu X Expands Operations To Sydney

Have you completely forgotten what Sydney looks like? Well, thankfully this story comes with a handy pictorial reminder.

SBS Radio Introduces Three 24-Hour Digital Radio Stations On Digital TV
  • Media

SBS Radio Introduces Three 24-Hour Digital Radio Stations On Digital TV

SBS Radio has announced two new digital radio stations – SBS PopAsia, SBS PopDesi and a refresh of SBS Radio 3 – is now available on digital TV. SBS Radio 3 will broadcast world news and current affairs from the BBC World Service (previously airing on SBS Radio 4 on digital radio) and special events […]

Aussies Invited To ‘Money With Sunny’ In New Suncorp Campaign
  • Advertising
  • Campaigns

Aussies Invited To ‘Money With Sunny’ In New Suncorp Campaign

At a time when more than two thirds of Australians are feeling confused and concerned about their finances, Suncorp has unveiled a new creative platform focused on making the complex simple. In a move that expands the brand beyond the sunshine state, Suncorp’s strategic approach is all about helping Australians focus on what they do […]

Champion Launches Music Platform Championing Emerging Aussie Artists Via Emotive
  • Campaigns
  • Marketing

Champion Launches Music Platform Championing Emerging Aussie Artists Via Emotive

For its first Australian campaign, Champion has partnered with creative and content agency Emotive to launch a music program titled ‘Revealed’. The program champions emerging Australian artists by intimately telling their story through video, and providing funding and creative support to create world class music videos for new release music. The first Revealed artist is […]

Finalists (And Host) Announced For Siren Awards 2018
  • Media

Finalists (And Host) Announced For Siren Awards 2018

Finalists for the best radio ad for 2018 have been announced, with 10 of Australia’s leading agencies from Sydney, Melbourne and Perth competing for the coveted Gold Siren. The finalists include The Monkeys, Clemenger BBDO, Marketforce, J. Walter Thompson, Ogilvy, BMF, McCann, YR, Fenton Stephens, and The Brand Agency. One half of last year’s winning […]

Delacon Launches Call Analytics In India
  • Marketing

Delacon Launches Call Analytics In India

Australian-owned call analytics provider Delacon has continued its international expansion, opening an innovation centre in India to service local and global partners, and develop the next generation of call tracking and analytics solutions. The office in Chennai is the eighth for the Sydney-headquartered business, which enables brands and agencies to optimise marketing campaigns by accurately […]

Protein To Handle Retail Roll-Out Of Recycling Initiative Return-It
  • Marketing

Protein To Handle Retail Roll-Out Of Recycling Initiative Return-It

Sydney brand and digital agency Protein has been appointed to handle the retail and digital roll-out of recycling company Return-It, which has just been announced as the container collection network for the ACT. Return-It awarded the work to the 17-year strong agency, following Protein’s tender support and brand development of the retail concept. The public-facing […]

Why We Need To Talk More About Failure
  • Opinion

Why We Need To Talk More About Failure

This is an excellent article about celebrating failure. Although, admittedly, we failed to get to the very end of it.

Opinion

by B&T Magazine

B&T Magazine
Women In Media Profile: Kimmie Neidhardt
  • Media

Women In Media Profile: Kimmie Neidhardt

Kimmie Neidhardt doesn't just have a very cool name, as you'll read here. There's a good head on those shoulders, too.

by B&T Magazine

B&T Magazine
SCA Promotes Nathan Soulsby To Head Of TV Sales For Sydney
  • Advertising
  • Media

SCA Promotes Nathan Soulsby To Head Of TV Sales For Sydney

Southern Cross Austereo (SCA) has announced the promotion of Nathan Soulsby to head of TV sales for Sydney. The announcement comes after Kristen Budd’s move to general manager of SCA’s Central Coast office. Caretaking the role during Budd’s maternity leave, Soulsby has been a key contributor to the consistent share and revenue growth that has […]

Columbus, A Merkle Company Announces Client Wins & Senior Appointments
  • Marketing

Columbus, A Merkle Company Announces Client Wins & Senior Appointments

Following the launch of Merkle in the Australian market in March, Columbus, a Merkle Company has secured nine new clients in three months, including Macquarie University, Event Hospitality & Entertainment Limited and Hipages. Columbus has also appointed two group business directors in the Victorian market, with Leonie Dawkins (pictured above, left) and Guy McGechan (pictured […]

Black woman in handcuffs
  • Media

Adland Industry Leaders To Be Locked Up In Prison To Help Aussie Youth

Over sixty senior leaders from the media, marketing, tech and creative industry will spend the night in jail as part of UnLtd’s Adland Bail Out, to raise funds for Whitelion. The ‘inmates’ will be handing over their mobile phones and putting on their prison overalls to brave a night in the chilling cells of Yasmar […]