NINE Entertainment (ASX: NEC) has flagged a better-than-expected start to the new financial year with an increase in expectations for ad revenue and market share for the network.
CEO Hugh Marks (pictured) told investors at the AGM that the ad market for the first half of 2017/18 has been at the upper end of previous earnings guidance, while good ratings had lifted Nine's share of the metropolitan TV ad market above 39 per cent compared to expectations of 37.5 cents.
While Nine's expectations for the second half of FY18 have not changed, the full-year earnings are expected to be in the upper end of analyst forecasts of $204 million to $230 million.
"All in all, we were pretty happy with where we ended up for the year and, more importantly, the positive momentum we have created for our future," says Marks.
Marks put the positive start to the year down to the success of the introduction of Australian Ninja Warrior and the return of popular shows like The Block.
"It (The Block) delivered an average audience growth of more than 20 per cent across all demographics and remains one of our most profitable franchises," Marks says.
The company is also confident the Ashes cricket series between Australia and England over the summer will help increase its television market share.
"With the Ashes to come, Nine's main channel in prime time currently looks set to win the survey year across all key demographics."
Nine closed FY17 with an after tax loss of $203 million. Marks says the company is still expecting to pay a dividend of around 9.5 cents a share for FY18, consistent with the 2017 financial year, but forecasts it will be able to increase its dividend payout in 2019, to within the range of 50 to 70 per cent of NPAT.
Marks is confident that the group's pivot to digital content is on track for success, with 9Now gradually becoming a stand-alone business from Nine's free-to-air business.
The group is also hopeful that its joint venture with Fairfax, digital content streaming platform Stan, will succeed in the long term.
"From a standing start, Stan has built an active subscriber base of more than 800,000 and is clearly the leading local player in a growing market space," says Marks.
Business News Australia
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