Nine Entertainment Co Holdings Ltd (ASX: NEC) has more than doubled its profit for the half-year ending 30 December.
The media company reported on Wednesday morning it raked in $181.9 million of consolidated net profit after tax, compared to $87.3 million the year before.
The positive result in a half-year affected by COVID-19 meant Nine has decided to give out an interim dividend of 5 cents per share fully franked.
This restores the dividend payout back to pre-pandemic levels.
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The share price for the publishing giant will be keenly watched as the ASX opens trade on Wednesday morning. The stock closed Tuesday down 0.37% to trade at $2.67.
Just last week Macquarie Group Ltd (ASX: MQG) analysts upgraded their share price target for Nine to $3.80. That’s a healthy 42% return from the current level.
Nine was one of the best-performing media stocks on the ASX last year, gaining 29% for the calendar year.
Despite the profit upgrade, Nine’s revenue from continuing operations actually fell 3% from the previous year.
However, earnings before interest, tax, depreciation and amortisation (EBITDA) for continuing operations rose 42% and its cash flow also improved more than 91%.
The company performed well during a volatile time and has “come out the other side in a very strong position”, according to chief executive Hugh Marks.
“The advertising market clearly turned in late September — earlier and more sharply than we had anticipated,” he said.
“Nine’s consistently strong audience performance, across all of our platforms, means we are well-positioned to benefit from this improvement in the ad cycle.”
A busy half-year for Nine
Big events during the half-year included the relocation of its headquarters from the historic Willoughby site in northern Sydney to a brand new skyscraper in North Sydney.
Nine’s own newspapers also reported Wednesday that negotiations had been re-opened with Facebook Inc (NASDAQ: FB) following the social media giant’s reversal of its Australia news ban.
There is also a chief executive transition in place. Current boss, Marks resigned from the position in November after revealing a relationship with the former managing director of commercial, Alexi Baker. He is staying on until a replacement is found.
“I’ve had a great 5 years at Nine, and am confident that I am handing over the reins at the perfect time,” Marks said Wednesday.
The company’s streaming service, Stan, also secured the rights to broadcast rugby union, with new brand Stan Sport launching last month.
With a big profit boost to show off, Nine will return JobKeeper payments received for all wholly owned subsidiaries. This amounts to about $2 million.
In total, it has received about $8.4 million of the government subsidy, with the vast majority ($6.5 million) going to its real estate classified business Domain Holdings Australia Ltd (ASX: DHG).