Bell Potter has recently started coverage of Sports Entertainment Group Ltd (ASX: SEG), and the broker believes big things are in store for the company.
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New acquisition to drive growth
Sports Entertainment Group operates the SEN sports radio network across Australia, and also has operations in digital media, live events, television syndication, and talent management.
Bell Potter said the company offers an attractive proposition for advertisers.
As they said:
SEG has curated a portfolio capable of delivering a whole-of-sport strategy targeting a valuable cohort for advertisers at the top of the funnel, then additional value as content filters through operating channels/segments; this operating model delivered an underlying EBITDA contribution margin of 20.4% in FY26 versus group underlying margin of 14.8%.
Sports Entertainment Group also recently finalised the takeover of New Zealand group MediaWorks for $107.6 million.
The company said when announcing the takeover that they expected the acquisition to be materially earnings per share accretive before synergies were factored in.
Synergies were estimated at about $5 million per year.
Sports Entertainment Group said MediaWorks was New Zealand's number-one audio business, with about 59% audience share in the 25-to-54 demographic.
Sports Entertainment Group Chief Executive Officer Craig Hutchinson said after the deal was finalised:
Today marks a landmark moment for Sports Entertainment Group. Completing the acquisition of MediaWorks which is New Zealand's #1 audio business transforms SEG into a truly scaled, trans-Tasman media group reaching more than 5 million listeners across Australia and New Zealand. This is exactly the kind of strategically important and value driving transaction we have been building toward. Both businesses are performing strongly into Q1 FY27. We are already seeing the benefits of the combination in our advertiser conversations and digital platform integration planning. The MediaWorks management team, led by CEO Wendy Palmer, has been outstanding throughout this process and we look forward to building something exceptional together.
Media shares looking cheap
Bell Potter said in its research note on the company that it expected the company to generate a compound annual growth rate of 13% in EBITDA from FY26 to FY29.
The company was expected to benefit from NZ$50 million in tax losses held by MediaWorks, as well as a healthy calendar of major sporting events over the medium term.
Bell Potter also expected the company to restart dividend payments at the end of FY28.
The broker has a price target of 45 cents on Sports Entertainment Group shares, compared to 26.5 cents currently.
If achieved, this would constitute a 69.8% return. The company is valued at $84.8 million.
