Nine shares rise on digital recovery story
Shares in Nine Entertainment has lifted by more than five per cent after the company laid out its "remarkable" recovery for investors.
In a speech to the company's annual general meeting, Nine Group Chairman Peter Costello said the advertising market is now in line with pre-COVID levels, and the company had made a remarkable comeback from the economic impact of the pandemic.
He said traditional advertising dollars had returned, and the market was at or above its pre-pandemic trajectory.
"We are now in a better position than we were at the start of the pandemic," Mr Costello told the virtual meeting Thursday.
After opening at $2.96, stocks rose to $3.12 on the news, before falling back to just on $3.
As previously announced, group revenue for the 2021 financial year was up eight per cent to $2.3 billion on the previous year and net profit lifted 83 per cent to $261 million.
Nine CEO Mike Sneesby said it was too early for the company to issue guidance on its expected results for 2022, but earnings guidance for the group's publishing arm has been upgraded from $30-40 million to $40-45 million.
The publishing arm had reached a "key inflexion point" according to Mr Sneesby, with digital growth outpacing declines in print revenue for the first time, and 56 per cent of revenue coming from digital sources.
He also said the evolution into digital is still at an early stage, with growth to come from eSports and talk radio streaming.
Streaming service 9Now drove most of the audience growth in television, while Stan has grown to more than 2.4 million subscribers with revenue growth of 29 per cent to $312 million.
Meanwhile in Nine's radio division, the advertising market is expected to pick up by 10 per cent during the half-year.
Mr Costello explained to reporters following the AGM that Nine expected Clive Palmer to again spend big on advertising on its platforms during the next federal election.
Before the last election Mr Palmer came in with a chequebook which outweighed all of political parties combined, and was a "quantum leap" above normal advertising spending, Mr Costello said.
"If he comes in at that level again that will be very good for advertising ... judging from what he's doing already it looks like he's going to come in at that level."
But he said Nine would not let Mr Palmer run anti-vaccination advertising on its platforms.
"That's where we draw the line... we don't judge an advertiser so much as judge the ad," he said.
Mr Costello confirmed the Nine parent company had not asked for JobKeeper payments, despite anticipating that revenue might fall by about half during the pandemic.
Other Nine businesses - including Domain which Nine part-owns - received just under $15 million but had already paid back almost $9 million, the company told the share market earlier this week.
Mr Costello also said Nine had made cyber defence a key priority after being subject to a significant attack in March, which impacted its corporate and broadcast systems.
He mentioned the company's recent content deals with Google and Facebook, saying he was pleased with the outcome, but Facebook's move to shut down its Australian news content was disproportionate and counterproductive.
There was more than 99 per cent shareholder adoption of the company's resolutions, including a grant of performance rights to the CEO.
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