Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Up 10%: Here’s what Nine Entertainment (ASX:NEC) reported for HY21

The Nine Entertainment Co. Holdings Ltd (ASX: NEC) share price has surged today after releasing its first-half FY21 results. Here are the details.

The Nine Entertainment Co. Holdings Ltd (ASX: NEC) share price has surged today after releasing its first-half FY21 results.

At current levels of around $2.90 per share, this represents a huge gain of over 200% since the onset of COVID-19. Here are the details.

NEC share price chart

Source: Rask Media 1-year NEC share price chart

Key takeaways

While group revenue for the half-year came in fairly flat at $1.2 billion, disciplined cost-cutting strategies combined with accelerated growth from many of its digital segments allowed the company to generate EBITDA of $355 million, up 42% on 1H20.

On a company-wide basis, net debt decreased to around $150 million, and Nine indicated it plans on returning its JobKeeper allowance back to the Federal Government.

A fully franked dividend of 5.0 cents per share will be paid on 20 April 2021, which equates to roughly 50% of net profit after tax (NPAT). Management plans to keep its dividend payout ratio at around 60-80% across the full year.

Growth drivers

Despite the volatility of the current trading environment, the digital advertising market has remained strong, with Nine’s broadcasting segment proving to be one of the key drivers behind these impressive results.

The broadcast segment, which is comprised of the group’s free-to-air (FTA) Nine Network, 9Now, and Nine Radio, reported EBITDA of $207.4 million, up 43% on the prior corresponding period (pcp). Cyclical and structural elements allowed costs to decline by 15%, significantly boosting its EBITDA margin up to 33.4%, up 10% over the pcp.

Broadcast video on demand (VOD) was another winner, with daily active users up 8% across the period, despite the absence of Love Island, which contributed as much as half the VOD minutes in the months it was played.

Video streaming service Stan also continued its upwards growth trajectory, with total streams up nearly 20% across the period.

Stan’s revenue was up 28%, partly as a result of a higher subscription fee (from $17 to $19 for the premium plan). Costs increased by only 10%, allowing EBITDA to more than double to $36.5 million for the period.

My take

Nine has delivered a pleasing result and the market has responded well to it.

Companies that operate by generating advertising revenue can often struggle in economic downturns, as advertising costs are usually some of the first to be cut from a business’s budget. This is likely why Nine shares got so heavily sold off last year.

Still, despite the challenges that Nine has faced, it’s good to see some positive results that will hopefully continue as the wider economy shows more signs of recovery.

For a more in-depth analysis of Nine shares, click here to read: Nine Entertainment (ASX:NEC) share price races higher – is it too late to buy?.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.
Skip to content