The News Corp (ASX: NWS) share price is rising after delivering its FY21 result which included a return to profit.
News Corp is responsible for a number of different media brands including The Wall Street Journal, Dow Jones, HarperCollinsPublishers, realtor.com, the New York Post as well as Australian media like The Australia, News.com.au, Sky News, Herald Sun and Daily Telegraph. In the UK it has newspapers like The Times and The Sun. It also has stakes in Foxtel and REA Group Limited (ASX: REA).
News Corp’s FY21 result
Annual revenue increased by 4% to $9.36 billion. This reflected a 30% increase in the fourth quarter.
Revenue at Move, operator of realtor.com, grew 36% year on year. There was 68% growth in the fourth quarter, which was an acceleration from the prior quarter’s growth rate. Average monthly unique users increased by 32% in the fourth quarter.
Dow Jones saw record digital subscriptions, continued robust growth at ‘risk and compliance’ and a strong increase in digital advertising revenue.
Book publishing continue to benefit from strong reading demand, with 19% revenue growth.
The business also referenced the news payment agreements with major tech platforms which will annually add revenue into “nine figures”.
Total segment EBITDA (EBITDA explained) came in at $1.27 billion. That was an increase of 25.7% compared to FY20.
Foxtel’s streaming products saw a 40% increase in total paid subscriber growth, though that includes different products including Kayo, Binge and Fox Sports.
Net income for the year was $389 million, up from a loss of $1.55 billion in FY20. But last year included a non-cash impairment charge of $1.69 billion.
Adjusted earnings per share (EPS) went up 204% to $0.67.
The business said that this was the most profitable year since the new News Corp was created in 2013.
Management comments
News Corp CEO Robert Thomson said: “Our strong record of cash generation, with a positive balance of $2.2 billion at the end of June, has given us enhanced flexibility. We were opportunistically able to take advantage of the required sale of OPIS, which we believe will be transformative for the already successful Dow Jones Professional Information Business. Our robust cash position has prompted the company to actively review our capital allocation policy, with a greater focus on buybacks.”
Summary thoughts on News Corp and the share price
Share buybacks would be a positive for shareholders. The company is seemingly on the right track to deliver profit growth, particularly with its non-news investments.
However, there are plenty of other ASX growth shares I’d rather think about which may have more potential.
