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Nine delivers profit warning on weak ad markets

Nine Entertainment Co Holdings Ltd (ASX: NEC) shares could fall today after the multi-media group told investors it now expects full year pro forma EBITDA growth to be in the mid-single digit range. This compares to prior guidance for pro forma EBITDA growth around 10%, with the downgrade blamed on weak free-to-air TV advertising markets. 

“Advertising from pretty much every major advertising category was weak in the September quarter particularly from auto, Government, domestic banks and gambling,” the group warned.

More specifically it reported television advertising markets were down 6.4% over the September quarter, with the December quarter and full fiscal year expected to also print mid-single digit declines. 

Nine remains a majority owner of property listings business It has also warned how a soft property listings environment will hurt H1 FY 2020 revenues. 

The bright spots are the Stan TV streaming business with subscriber growth still strong, while the digital publishing business that largely contains the popular ex-Fairfax papers is also performing strongly. At its flagship metro papers subscription revenues recently climbed above advertising revenues for the first time in their history. 

Nine Entertainment shares closed at $1.84 yesterday. 

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