Nine profits up 35 per cent in record result for TV, publishing

Nine Entertainment Co chief Mike Sneesby says the media company has the financial strength to invest in its business and consider acquisitions after rising profits allowed it to reward shareholders with a record dividend and launch a share buy-back scheme.

The broadcasting, publishing and streaming company’s shares climbed 9 per cent to close at $2.18 after it revealed a 35 per cent lift in profits to $315 million, driven by growth in subscriptions and a buoyant advertising market.

Sneesby told investors Nine was well placed to withstand uncertain economic conditions. He told this masthead Nine had considered a range of other options for capital management, such as a special dividend or increasing its stake in real estate portal Domain (of which it already owns 60 per cent) before approving the buy-back of up to 10 per cent of its shares.

“When the board considers its position on any form of capital management activity, it has to take into account all of those considerations,” Sneesby said. “We made a very clear point of saying that we’re announcing this buyback of up to 10 per cent of our issued capital, which we have the capacity to alongside making other organic investments, and continuing to pay dividends at 60 per cent to 80 per cent.

“We still have capacity on our balance sheet to make acquisitions or to make organic investments in the business.”

The comments were made after Nine, which owns The Sydney Morning Herald and The Age, reported a 15 per cent increase in revenue for the fiscal year 2022 of $2.7 billion.

The result was driven by strong advertising market conditions, increased subscriptions and millions of dollars in licensing fees from tech giants Google and Meta. The company’s broadcast and publishing businesses reported record results, with growth in earnings before interest, tax, depreciation and amortisation (EBITDA) of 21 per cent and 53 per cent respectively.

Nine’s largest shareholder Bruce Gordon, who holds a 14.94 per cent stake in the company, hailed the result.

“Congratulations to Mike, Peter and the team on this record-breaking result, strong balance sheet and return to shareholders,” Gordon told this masthead. “The continued transformation of Nine into a diversified media company sets it apart from others and gives great confidence to us about Nine’s future.”