Southern Cross and Seven West announced plans to merge in late September, with Seven West Media shareholders to receive 0.1552 Southern Cross shares for each share they own under the deal.

Strength in scale

The merger would create a diversified media group, bringing together Southern Cross' radio networks, including Triple M and the Hit network, with Seven West's television networks, as well as The West Australian newspaper and the free online publication The Nightly.

The two companies stated at the time that the merger, which would create a company valued at approximately $400 million, would yield annual cost savings of around $25 million to $30 million, alongside annual revenue of approximately $1.8 billion.

Following the implementation of the merger, Southern Cross shareholders would own 50.1% of the merged entity, with Seven shareholders owning the rest.

Both companies have commissioned independent expert's reports into the proposed merger, with Southern Cross releasing its report to the ASX this morning.

The report's authors, Kroll, said the deal, which does not require a shareholder vote from Southern Cross shareholders, was positive for them.

As they said in their report:

In our opinion, we consider the scheme is in the best interests of Southern Cross shareholders in the absence of a superior proposal. Our analysis of the underlying equity value contributed by Southern Cross shareholders compared to the underlying equity value of the combined group (inclusive of synergies) that they will receive indicates that Southern Cross Shareholders should benefit from an increase in the underlying value of their shares.

Multiple merger benefits

The report said the proposed merger would bring together two complementary businesses, and their combination, "will result in an integrated multi-media platform which is expected to have strong reach across the Australian advertising market''.

The report stated that the merger offered several strategic benefits, including the ability to leverage audience crossover to enhance user experience and provide advertisers with better analytics and targeted marketing.

The increased size of the group would also enable it to withstand the challenging structural changes affecting the media sector, the report said, "with the combined group's greater diversification and size (providing) an enhanced ability to withstand structural shifts in the advertising market and mitigate the impact of cyclical downturns in any single market''.

Other potential benefits included improved negotiating power with suppliers and improved offerings to advertisers through its greater national presence and brand strength, the report said.

The report also said the merger ratio, that is, the number of shares being offered to Seven West shareholders, was also considered fair.

The merger requires the approval of Seven West shareholders only.

The post Southern Cross and Seven West merger gets the tick from independent expert appeared first on The Motley Fool Australia.

In a statement to the ASX on Thursday, Southern Cross said its underlying EBITDA for the first quarter of FY26 would come in at $14 million, up 129% on the same period last year.

Total audio revenue of $105.1 million was up 4.7% year on year, and the company's share of the nation's metropolitan radio markets came in at 29.8%, up 1.8 points.

The company had now delivered 12 consecutive months of market share improvements, it said.

Business travelling well

Southern Cross Chief Executive Officer John Kelly said the company was performing well:

Southern Cross's positive operating momentum continues into FY26 with our focus on growing and monetizing the audience that matters. We have seen continued improvement in revenue share across both broadcast and digital as our sales teams outperform the broader market.

Mr Kelly said the company was also focused on disciplined cost management, with costs falling 3.4% on the prior period.

The company also reaffirmed its full-year EBITDA guidance of $78 to $83 million.

Takeover details soon to come

Southern Cross also updated the market on its proposed merger with Seven West, saying an independent expert's report had been commissioned and would be released to the market in November.

Southern Cross and Seven West announced the proposed merger, which would create an integrated media company worth more than $400 million, in late September.

Under the proposed merger, Seven West Media shareholders will receive 0.1552 Southern Cross shares for each share they own.  

Seven West's key brands are the suite of Seven television channels, as well as newspaper, The West Australian, and free online publication, The Nightly.

Southern Cross' key brands are the Triple M radio network, the Hit network, and the audio streaming service, Listnr.

Opposition to the merger soon arose, however, with Southern Cross receiving a notice under Section 249D of the Corporations Act from Sandon Capital, looking to requisition a shareholder meeting.

That meeting would be held to propose a resolution which would restrict Southern Cross's ability to issue new shares, and hence, as Southern Cross said at the time, "would be inconsistent with the proposed merger''.

Southern Cross said in an announcement to the ASX earlier this month that based on the support it had already received from major shareholders, it was apparent the resolution would not pass.

Southern Cross shares were 3.3% higher on Thursday morning at 85.2 cents.

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Southern Cross told the ASX on Wednesday that late on Tuesday, it received a notice under Section 249D of the Corporations Act from Sandon Capital, looking to requisition a shareholder meeting.

As Southern Cross explained:

The notice was executed by the registered holders of more than 5% of Southern Cross' ordinary shares — One Fund Services Limited and One Managed Investment Funds Limited — requiring that the directors of Southern Cross call and arrange a general meeting to consider the attached shareholder resolution.

The resolution, Southern Cross said, proposes to amend the company's constitution with regard to its ability to issue shares.

The amendment proposed by the resolution would restrict the ability of Southern Cross to issue more than 25% of its shares without shareholder approval. Southern Cross notes that if the amendment were made it would be inconsistent with the proposed merger announced yesterday with Seven West Media.

Southern Cross shares fell more than 7% to 83 cents on the news, while Seven West shares were steady at 15 cents.

Resolution won't pass, Southern Cross says

Southern Cross said on Wednesday that the resolution requested by Sandon Capital was likely doomed to failure, given that two of its own shareholders had indicated they would vote against the resolution, which would need more than 75% support to pass.

Southern Cross advises that shareholders collectively representing more than 25% of its shares, being Thorney Investment Group (15%) and Spheria Asset Management (14%) have advised that they are not supportive of this form of resolution and intend to vote against it. Based on this statement of intention, the resolution would not be passed, and the board and management will focus their efforts on the implementation of the proposed merger which the board has determined to be in the best interests of all Southern Cross shareholders and delivery of the synergies and value accretion expected from that merger for Southern Cross shareholders.

Southern Cross and Seven announced the proposed merger, which would create a media company with assets across television, newspapers and online news outlets, radio, and podcasts, on Tuesday.

The deal was expected to generate $25 to $30 million worth of cost savings across the merged group.

Both companies have struggled to generate substantial profits in recent years, with the market value of each plummeting over the past decade, from valuations in the billions to just north of $200 million for each company now.

The boards of both companies support the merger proposal, and SGH Ltd (ASX: SGH), the company formerly known as Seven Group Holdings, has indicated it will vote its 40.2% stake in Seven West Media in favour of the deal.

The post Media company shares on the slide after merger opposition emerges appeared first on The Motley Fool Australia.

Under the proposed merger, Seven West Media shareholders will receive 0.1552 Southern Cross shares for each share they own.  

Seven West is currently valued at $215.5 million, while Southern Cross is valued at $201.5 million.

Seven West's key brands are the suite of Seven television channels, as well as newspaper, The West Australian, and free online publication, The Nightly.

Southern Cross' key brands are the Triple M radio network, the Hit network, and the audio streaming service, Listnr.

Media stocks struggling

Media companies have struggled to remain profitable in the digital age, evidenced by the plunge in the value of Seven West shares over the past two decades.

Back in 2007, the company's shares were valued at more than $15, with Seven valued in the billions at the time.

The stock has been on a relentless march lower over the past decade, however, and now changes hands for just 14 cents.

The company has not paid a dividend since 2017, and made just $17 million in net profits last year on revenue of $1.35 billion.

Southern Cross Media shares have followed a similar trajectory, changing hands for more than $36 back in 2007, and just 84 cents now.

The radio company made a modest net profit of $9.2 million last financial year on revenue of $421.9 million, after posting a $224.6 million net loss the year before.

Southern Cross has been paying dividends, however.

Larger, stronger business to emerge

Southern Cross chair Heith Mackay-Cruise said the merger would create a leading, integrated television, audio, and digital platform.

The combination of Southern Cross' and Seven West Media's leading brands on broadcast and digital platforms establishes an indisputable leader across the critical 25-54 'audience that matters' demographic. The merged entity will offer partners and clients a 'one stop shop' for opportunities to reach this valuable audience across all mediums, leveraging shared content and commercial opportunities to add value beyond the initial cost synergy estimates.   

The boards of both companies support the merger proposal, and SGH Ltd (ASX: SGH), the company formerly known as Seven Group Holdings, has indicated it will vote its 40.2% stake in Seven West Media in favour of the deal.

The companies said work had already been done on assessing the cost benefits of merging the businesses.

Southern Cross and Seven West's joint preliminary synergy assessment has identified annual pre-tax cost synergies of $25-30 million, to be realised within 18-24 months post completion. These synergies comprise the reduction of shared corporate overhead, operating expense duplication and facility consolidation. Further work continues to maximise potential revenue synergies and to structure an integration plan to bring the best of both companies together to maximise value for shareholders.

Seven West Managing Director Jeff Howard will lead the new business if the merger goes through.

Seven West shareholders will need to approve the deal, with at least 75% of votes cast and more than 50% of shareholders present at a meeting required to get the deal over the line.

The post Seven West Media and Southern Cross Media announce $400 million-plus merger appeared first on The Motley Fool Australia.

For example, the two shares listed below have been making moves in opposite directions following the release of announcements. Here's what you need to know:

Incitec Pivot Ltd (ASX: IPL)

This ASX All Ords industrial chemicals and explosive company's shares were up 3% after the release of its announcement.

Incitec Pivot's announcement revealed that the US anti-trust regulatory review process in relation to the sale of its ammonia manufacturing has now concluded. This paves the way for the completion of the transaction on 1 December 2023.

The company also confirmed that ~A$1 billion of cash proceeds from the transaction will be returned to shareholders.

Southern Cross Media Group Ltd (ASX: SXL)

Heading in the other direction is this ASX All Ords share, which has fallen as much as 6% this morning.

Investors have been hitting the sell button after it provided an update on Australian Community Media's (ACM) non-binding conditional indicative proposal involving the merger of Southern Cross Media and the regional publications and digital assets of ACM.

The company has considered with the assistance of its advisers the ACM proposal and determined that it would not be in the best interest of shareholders.

One of the reasons for this is that the proposal involves the acquisition of regional print and digital assets, which is not consistent with its strategy.

But that's not the end of the M&A. Management advised that it is continuing to progress its evaluation of the indicative proposal received from the consortium of ARN Media Limited (ASX: A1N) and Anchorage Capital Partners.

The post These ASX All Ords shares are making big moves in opposite directions on news appeared first on The Motley Fool Australia.

The stock was up 22% in earlier trade and remains up 17.8% at the time of writing.

Any guesses?

If you said Southern Cross Media Group Ltd (ASX: SXL), go to the head of the virtual class.

The Southern Cross Media share price closed yesterday trading at 73 cents. Shares are currently swapping hands for 86 cents apiece.

Here's why the ASX All Ords share is rocketing higher today.

What's happening with Southern Cross Media shares?

Investors are bidding up the ASX All Ords share after the company announced it has received a non-binding indicative proposal from ARN Media Ltd (ASX: A1N) and Anchorage Capital Partners Pty Ltd to acquire 100% of its fully diluted share capital.

The proposal offers 29.6 cents in cash along with 0.753 ARN Media shares per Southern Cross Media share.

Based on Tuesday's closing price of 85.5 cents per ARN share, this implies a total value of 94 cents per share. That's still 9% below where the ASX All Ords share is trading at the time of writing. And, as ARN notes, that's "before taking into account the benefit of any franking credits distributed in connection with the proposed transaction".

Should it go through, ARN said the transaction and separation will result in two distinct national media organisations which would compete independently on metro and regional radio.

Commenting on the offer that's sending the Southern Cross Media share price soaring today, ARN CEO Ciaran Davis said:

There is a significant value creation opportunity bringing together certain ARN and SCA radio and digital audio assets. ARN is ideally positioned to support and operate an expanded regional radio network and as a combined group of scale in digital audio, positioned to compete efficiently and effectively with international competitors.

Southern Cross told shareholders that the takeover proposal is "unsolicited, complex, and highly conditional".

Management of the ASX All Ords share recommended shareholders do not take any action at this time.

They said the offer remains subject to the unanimous recommendation of the Southern Cross board, due diligence, along with shareholder and regulatory approvals from the ACCC and ACMA.

Southern Cross Media has appointed Grant Samuel as its financial adviser and Corrs Chambers Westgarth as its legal adviser to further study the proposed takeover.

Stay tuned.

How has this ASX All Ords share been tracking longer-term?

With today's big boost factored in, the Southern Cross Media share price is down 7% over the past 12 months.

The ASX All Ords share is down 20% in 2023.

The post Guess which ASX All Ords share just rocketed 22% on takeover news appeared first on The Motley Fool Australia.

Three All Ords members, in particular, are having a rough trot today upon sharing their latest financial figures with investors.

Here's a quick look into what could be instigating the pessimism.

Why the red reaction to these ASX All Ords stocks?

Buoyant property prices weren't enough to help Domain Holdings Australia Ltd (ASX: DHG) impress in its full-year results. Instead, the digital property platform provider recorded a steep 32.4% fall in earnings per share (EPS) in FY23.

The company reported roughly flat revenue compared to the prior period, sitting at $345.7 million. Weakness was apparent in Domain's residential segment as new for-sale property listings tumbled 13.8%.

In turn, the company's largest revenue generator experienced a 6.8% decline in reported revenue for the financial year.

The ASX All Ords stock also reported net profits below consensus estimates of $39.8 million. As a result of weaker listings, significant item losses, and discontinued operations losses — Domain's net earnings shrank to $26.1 million.

At the time of writing, shares in Domain are down 7.2% to $3.79. Accounting for today's fall, the share price is now slightly below where it was a year ago.

Next is television and radio broadcaster Southern Cross Media Group Ltd (ASX: SXL). In FY23, full-year revenue for this media company slipped 3.7% to $505.6 million. Stellar growth in the digital audio (LiSTNR) category was offset by a 14.5% fall in television revenue.

The real pain struck the Ten Network owner when it came to its net profits after tax (NPAT). Lower revenue and higher expenses culminated in a 20.1% slump in after-tax profits in FY23.

Heading into the afternoon, shares in Southern Cross Media are down 8.3% to 83 cents apiece. The weakened share price means this ASX All Ords stock is now 27.8% below what it traded for a year ago.

Lastly, NRW Holdings Limited (ASX: NWH) rounds out our three ASX shares feeling the heat on Thursday. The diversified contract services company is experiencing a sizeable sell-off despite reporting a record full-year result in many regards.

According to the company's release, revenue reached a record $2.7 billion, rising 11.4% from the prior year. Likewise, EBITDA came in at a record $288.8 million, increasing by 10.2%. Notably, all three segments — civil; mining; and minerals, energy, and technologies — delivered growth in the latest financial year.

However, statutory earnings shrunk from $90.2 million in FY22 to $85.6 million.

At the time of writing, shares in this ASX All Ords stock were down 6.6% to $2.56. Despite the negative move, the NRW Holdings share price is still 21.8% higher over the past year.

The post 3 ASX All Ords stocks getting hammered on disappointing earnings appeared first on The Motley Fool Australia.

Here's why these five stocks really defined the week.

ASX shares that leapt onto the list on Monday

Pointsbet Holdings Ltd (ASX: PBH) locked in its place on this list on Monday.

Shares in the sports betting company took off right from the opening bell and closed the day up a remarkable 21.6%.

Investors were scrambling to get their hands on the ASX share after it reported receiving an unsolicited non-binding indicative offer from United States rival DraftKings to acquire its US business. DraftKings proposed to pay US$195 million in cash.

Pointsbet gave DraftKings until after market close on 27 June to complete its due diligence and finalise its proposal. Stay tuned.

Also making our five defining ASX shares of the week list on Monday was lithium developer Lake Resources N.L. (ASX: LKE). Though for decidedly different reasons.

The Lake Resources share price crashed 20.0% on Monday after releasing an operational update for its Kachi brine project, located in Argentina.

As you'd expect from the heavy selling, the update fell far short of market expectations.

The biggest disappointment looks to be a delay in battery-grade lithium carbonate production at the project. This was pushed back to 2027, later than expected.

Lake Resources also is facing some hefty costs to reach phase one of its production plans. Capital costs are estimated in a range of US$1.1 billion to US$1.5 billion. Phase one is targeting 25,000 tonnes per annum (tpa) of battery-grade lithium carbonate production.

Other big movers during the week

The third ASX share to make the list this week is tech share Xero Limited (ASX: XRO).

On Tuesday, the cloud accounting platform provider notched its fifth consecutive day of gains. The ASX share closed the day up 1.4% at $119.88 per share.

That saw the Xero share price up 70% in 2023 and marked a fresh 52-week high.

Also making the top five defining ASX shares list on Tuesday was Southern Cross Media Group Ltd (ASX: SXL).

Shares in the media company closed the day up 20.1% after reporting that rival ARN Media (ASX: A1N) – which owns KISS FM – acquired a 14.8% interest in Southern Cross Media for the tidy sum of $38.3 million.

ARN said it sees Southern Cross Media as "representing attractive value for ARN Media's shareholders".

Which brings us to the fifth ASX share that defined the week, gold miner Gold Road Resources Ltd (ASX: GOR).

Gold Road made the list on Thursday when the $1.6 billion gold stock suffered an 8.3% fall in its share price.

Investors were hitting the sell button following an update on the miner's expectations for its Gruyere Gold Mine.

Gold Road reported that a combination of inclement weather along with issues with blasting resources and production drills had negatively impacted ore and waste mining at the mine. This saw the ASX share downgrade its 2023 annual production guidance.

The post 5 ASX shares that defined the week appeared first on The Motley Fool Australia.

In morning trade, the ASX All Ords share was up as much as 30% to 98.5 cents.

The media company's shares have pulled back a touch since then but remain up over 21% to 92.5 cents.

Why is this ASX All Ords share rocketing?

Investors have been buying Southern Cross Media shares after the company revealed that one of its rivals has acquired a substantial stake.

According to the release, KIIS FM's owner ARN Media (ASX: A1N) has acquired an interest of 14.8% in Southern Cross Media for $38.3 million. This is close to the maximum shareholding that ARN Media, formerly known as HT&E, is allowed.

The release notes that under the Broadcasting Services Act 1992 (Cth) (BSA), ARN Media would be deemed to control Southern Cross Media's commercial radio and television broadcasting licences if it were to hold an interest of 15%.

However, because Southern Cross Media and ARN Media control the maximum permitted two commercial radio broadcasting licences in all metropolitan markets and several regional markets, the BSA prohibits ARN Media from holding an interest of 15% or more in Southern Cross Media.

Why has it acquired the stake?

ARN Media has only provided a small statement regarding this investment. It said:

ARN Media acquired the stake as a strategic equity investment in a sector that it knows well and sees the equity position in Southern Cross Media as representing attractive value for ARN Media's shareholders.

It appears that some investors agree with this view and have been piling into the ASX All Ords share today. They may also be anticipating a full takeover in the future. Time will tell if that is the case, but ARN Media certainly has its foot in the door.

The post Why did this ASX All Ords share just surge 30%? appeared first on The Motley Fool Australia.

The All Ordinaries Index (ASX: XAO) is also in the red today, down 0.9% at this same time.

Shares in the ASX listed media provider closed on Friday trading at $1.17 and are now at $1.16. This comes as investors pore over the company's full-year results for the 12 months ending 30 June (FY22).

Southern Cross Media share price wobbles despite dividend boost

• Revenue of $519.7 million, down 1.8% from FY21
• Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $87.9 million, up 2.8% year on year
• Underlying net profit after tax (NPAT) of $27.4 million, up 38.4% from the prior year
• Full-year dividends of 9.25 cents per share (cps), fully franked, up from 5.0 cps paid in FY21

(* Note, underlying expenses and underlying EBITDA exclude government grants received in FY21 and FY22, impairment charges of $179.4 million and $4.0 million of other significant items in FY22.)

What else happened during the year?

The Southern Cross Media share price should be getting some extra lift from the 4.75 cents fully franked final dividend the board declared. That represents 85% of NPAT (excluding significant items), coming in at the top of the company's policy of paying dividends of 65% to 85% of NPAT.

As at 30 June, Southern Cross had net debt of $78.5 million, down from $52.6 million at the end of FY21. The media company reported leverage of 0.95 times EBITDA, noting that's "well below" its covenant of 3.50 times.

FY22 saw a continuing recovery in all of its audio segments, with audio revenue of $392.9 million increasing 9.2% year on year.

Southern Cross Media also saw improved margins from its television segment in the wake of its affiliation switch from Nine to Network 10. Television's underlying EBITDA margin rose from 17.6% to 23.7%.

A strategic review has now concluded shareholder value will be maximised by continuing to hold its television assets.

What did management say?

Commenting on the results, Southern Cross Media CEO, Grant Blackley said:

With a robust balance sheet and strong cashflow, we are continuing to invest for the future while returning funds to shareholders through fully franked dividends and our on-market share buy-back.

Commercial radio audiences in metro markets reached record levels in recent surveys. The total audience of 12 million recorded in GfK Survey 4 was the highest ever and a 7.6% jump over the prior year. SCA's Hit and Triple M stations have led this rise as audiences return to entertainment and music formats.

With a nod to some headwinds over the year, Blackley added, "Local advertisers were directly affected by floods and supply chain issues resulting in lower levels of growth in local advertising."

What's next?

Looking ahead, Blackley said:

SCA has completed a five-year program to install digital operating infrastructure across all offices and every asset. This allows SCA to distribute our premium content from any location to audiences at a time and on a device on their choice…

Our investment in a fully owned and operated digital audio ecosystem, LiSTNR, also positions SCA to take a leading share of the rapidly expanding Australian digital audio market.

Southern Cross Media share price snapshot

The Southern Cross Media share price has struggled this year, down 40% since the opening bell of 4 January. By comparison, the All Ordinaries has lost 8% year-to-date.

The post Southern Cross Media share price wobbles despite 85% FY22 dividend boost appeared first on The Motley Fool Australia.

Southern Cross shares are currently up an impressive 8%, going for $1.76 at the time of writing. That comes after the media company closed at $1.62 a share yesterday and opened at $1.70 this morning.

So why are Southern Cross shares having such a strong day today? It could be the result of the announcement the company made this morning.

Before market open, Southern Cross released a market update to investors. This contained two new pieces of news. The first was an announcement that revealed the company has "received unsolicited approaches from several parties indicating potential interest in acquiring SCA's regional television assets".

Southern Cross stressed that these offers were non-binding and incomplete, and did not include "details of timing, price or conditions".

The company is assessing its options and engaging with these interested parties, and told investors that it will "continue to update shareholders as appropriate".

Southern Cross share price gains amid new share buyback announcement

The other piece of news that was revealed was a new on-market share buyback program worth up to $40 million. Here's some of what the company had to say on this matter:

With modest gearing and consistent free cash flow generation expected to continue, the Board has approved the buyback to enhance shareholder returns. SCA will fund the buyback from existing cash reserves and debt facilities, while continuing to invest in SCA's digital audio strategy to grow audiences and revenue opportunities.

It could be one or both of these announcements that are fuelling investor interest in Southern Cross today. Interest in buying a company's assets from multiple parties usually bodes well for a company and its market valuation.

Additionally, share buybacks have a direct benefit for existing shareholders. When a company purchases and retires its own shares on the open market, it reduces the company's total share count, boosting existing earnings per share (EPS). It also usually comes with share price gains, since the supply of the shares is being constricted.

So it's this announcement that is likely providing the boost to the Southern Cross shares that we are currently seeing.

At the current Southern Cross Media share price, this ASX All Ords share has a market capitalisation of $430.7 million, with a dividend yield of 5.11%.

The post Buyback bonanza! Why the Southern Cross Media (ASX:SXL) share price is up 8% today appeared first on The Motley Fool Australia.

The company reported a large decrease in profit and declared an interim dividend to be paid in April.

At the time of writing, the Southern Cross Media share price is down 10.99% at $1.81. For context, the All Ordinaries Index (ASX: XAO) is also having a shocking day, currently down 2.8%.

Let's read on…

Southern Cross Media share price tanks on results

For the six months ending 31 December 2021 (H1 FY22), the Australian media company highlighted the following:

• Revenue up 0.2% to $259.8 million against the prior corresponding period (pcp)
• Total earnings before interest, taxes, depreciation and amortisation (EBITDA) down 36% against pcp to $48.2 million
• Net profit after tax (NPAT) down 48.3% on pcp to $16.8 million
• Group operating expenses down 2.7% to $213.3 million
• Net debt down 1.9% to $67.7 million.

Despite the drop in earnings, Southern Cross Media said its balance sheet "remains strong". As such, its EBITDA amount (excluding JobKeeper payments and its Public Interest News Gathering grant [PING]) was up 16.3% to $46.5 million.

The company will also pay a fully franked dividend of 4.5 cents per share on 7 April. This is the first time it has paid an interim dividend since 2019.

What else happened in the half?

Looking more closely at its operations, Southern Cross Media's LiSTNR app saw 500,000 new users in the last 12 months. It also had more advertisers taking advantage of its "addressable audiences".

Against its pcp of H1 FY22, audio revenue increased by 11.5% to $193.8 million, and broadcast revenue was up 10.3% to $183.3 million.

Television revenue was down by 22.3% to $65.8m. However, television EBITDA (excluding JobKeeper payments and PING) increased by 27.3% to $17.5 million. This was a double whammy effort, due to the media company's "sales performance" and the changeover of its "television affiliation to Network 10" from 1 July last year.

On the move, CEO Grant Blackley said:

Our open and effective operating relationship with Network 10 delivered above-market returns for both parties.

From 1 April, SCA will take over national sales representation for Network 10 programming in northern NSW and Tasmania which will simplify buying off Network 10 for national advertisers in regional Australia.

Expenses were reduced by $6 million, a portion due to "lower television affiliation fees payable to Network 10".

What did management say?

Commenting further on the results impacting the Southern Cross Media share price today, Blackley said:

The recovery in advertising markets continues to strengthen but is uneven, with Omicron related disruptions tempering the strong momentum from November to December.

Advertising markets in Q4 are expected to benefit from a normalising market, improving consumer and business demand and the upcoming Federal Election.

Southern Cross Media share price snapshot

Over the last 12 months, the Southern Cross Media share price has dropped by 25%. It is also down by more than 5% this year to date.

The company has a market capitalisation of $536.35 million.

The post Southern Cross Media (ASX:SXL) share price drops 11% on profit fall appeared first on The Motley Fool Australia.

• Traditional ASX media shares could be among the winners this reporting season, according to UBS
• The broker identified four tailwinds that could bolster earnings in the sector
• All traditional ASX media shares under UBS' coverage are rated as "buy"

The reporting season is about to kick off and a leading broker reckons that traditional ASX media shares could fare well this month.

This is because the sector is enjoying four tailwinds, according to UBS. These factors could boost their earnings when they hand in their results in a few weeks.

ASX media shares that are rated "buy"

The broker's bullish view is reflected in its "buy" recommendation for all the traditional ASX media shares under its coverage.

These include the HT&E Ltd (ASX: HT1) share price, Nine Entertainment Co Holdings Ltd (ASX: NEC) share price, News Corporation (ASX: NWS) share price, Seven West Media Ltd (ASX: SWM) share price and Southern Cross Media Group Ltd (ASX: SXL) share price.

"In traditional media, our focus will be on the 2H outlook, which may provide evidence on the sustainability of the post-COVID rebound in FTA ad spend," said UBS.

"[Although] in radio we believe any potential trajectory towards pre-COVID levels may continue to be delayed given its advertisers appear to be more impacted by COVID-19 (e.g. local direct advertising, retail)."

Earnings tailwinds

The strength in the combined TV ad market, particularly in the first half, is one of the tailwinds that UBS has identified.

Another is the deal that traditional Australian media companies have struck with Facebook, now Meta Platforms Inc (NASDAQ: FB), as well as Google, which is owned by Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG).

The deal will see these online giants pay content creators for their news stories. Nine Entertainment stands to get around $30 million to $40 million added to its earnings before interest, tax, depreciation and amortisation (EBITDA).

Other growth drivers for ASX media shares

Revenue growth in the digital assets of these ASX shares is the third driver highlighted by UBS.

The broker also points to the balance sheet repair that was undertaken by the sector through asset sales and capital raises. This will allow the sector to resume paying dividends, undertake capital returns and make acquisitions.

The only negative trend that could weigh on the sector is rising costs due to cyclical factors and the loss of the government's COVID-19 support payments.

The other good news is that rising interest rates and inflation are less likely to negatively impact the group compared to their online peers, such as Carsales.Com Ltd (ASX: CAR) and SEEK Limited (ASX: SEK).

The post 4 reasons to buy these ASX media shares this month: UBS appeared first on The Motley Fool Australia.

At the time of writing, shares in the media company are trading for $1.95 – up 6.27%. For context, the All Ordinaries Index (ASX: XAO) is 0.07% higher.

Let's take a closer look at today's news.

Southern Cross share price jumps on 91.6% rise in profits

• Net profits after tax (NPAT) of $48.1 million – up 91.6% on the prior corresponding period (pcp)
• Revenue declined 2.2% on the pcp to $529 million but expenses also fell 6.8% to $403 million
• This equates to earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $126 million, which is 16.4% higher
• While revenue was down overall, second half revenue increased 16% on the prior year. The company says this reflects "the recovery in the media market".
• The company will pay a final dividend of 5 cents per share – representing 85% of second-half NPAT. At the current Southern Cross share price, this represents a yield of 2.59%.

What happened in FY21 for Southern Cross?

The biggest story affecting the Southern Cross share price, and the entire media industry and share market in general, is COVID-19. The pandemic decimated advertising revenues across mediums as companies pulled advertising. Victoria was in the midst of its brutal second lockdown at the beginning of the period, and New South Wales entered its second lockdown at the end of the period.

Nine Entertainment Co Holdings Ltd (ASX: NEC) pulled its regional affiliation with the broadcasting company in March. The Southern Cross share price plummeted 14% on the day this was announced.

Finally, Southern Cross was kicked out of the S&P/ASX 200 Index (ASX: XJO) during the financial year.

What did management say?

Southern Cross Austereo CEO Grant Blackley said:

Our Australia-wide network of 99 AM, FM and DAB+ radio stations remains the creative core of SCA, but with a new digital-first mindset. With audiences increasingly choosing to listen via digital means, our teams are finding ways to make it easy to enjoy our radio shows, podcasts, music playlists, news and other local updates on LiSTNR and other platforms.

He added:

SCA's Television business performed well, delivering EBITDA of $38.1M, up 59.7% compared to the prior year. While this result benefited from government support in the first half of the year, it also reflected the relatively quicker recovery of television advertising markets and SCA's market-leading sales performance.

What's next for Southern Cross?

From this financial year, Southern Cross has a new affiliation agreement with CBS Corporation Common Stock's (NASDAQ: VIAC) Australian business, Network 10. Blackley says this deal should be earnings neutral.

Finally, Blackley confirmed Southern Cross has signed an agreement with Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) to join Google News Showcase. He says the deal will not have a material impact on earnings.

Southern Cross share price snapshot

Over the last 12 months, the Southern Cross share price is up 14%. Year to date, however, it is down 13%.

Southern Cross has a market capitalisation of approximately $485 million.

The post Southern Cross (ASX:SXL) share price booms 6% as profits nearly double appeared first on The Motley Fool Australia.

Southern Cross Media share price higher on broadcast agreement

Southern Cross Media announced a new regional television affiliation agreement to broadcast channels 10, 10 Bold, 10 Peach and 10 Shake into its regional Queensland, Southern NSW and regional Victoria markets.

The new agreement will begin 1 July 2021 for a term of two years.

The arrangement will broadcast Network 10's highly successful television programs including MasterChef Australia, Australian Survivor, The Bachelor Australia, The Masked Singer, The Project, live ALeague, Westfield W-League, as well as Socceroos, Matildas and FFA Cup matches.

Southern Cross Media says its sales team have a track record of converting ratings to revenue and look forward to generating strong commercial returns for both parties.

Television revenue update

Southern Cross Media advises that its television revenue booked to date for Q122 is in line with its internal forecasts and ahead of its prior year performance.

An improvement in year-on-year television revenue has been led by a recovery in the national advertising market and improving local investment across all regions.

Southern Cross Media said that this agreement will enable it to optimise the strategic and commercial position of its television business in the evolving free-to-air television market.

The company said it expects television earnings under the Network 10 affiliation to be neutral, compared to the current Nine affiliation, which is expected to expire on 30 June 2021.

Southern Cross Media share price in 2021

It's been a choppy year for the Southern Media share price.

A key catalyst for its underperformance was on 12 March, when Nine Entertainment Co Holdings Ltd (ASX: NEC) said it would not extend its regional affiliation agreement. The company's shares tanked ~10.4% on the day from $2.21 to $1.98.

The 6% rally today to $2.11 in intraday trade has helped push the Southern Cross Media share price to a 4-month high, but it is still down about 2.30% year-to-date.

The post Why the Southern Cross Media (ASX: SXL) share price is up 5% today appeared first on The Motley Fool Australia.

At yesterday's market close, shares in the rural and regional broadcaster were trading at 21 cents each.

Let's take a closer look at today's news and what it might mean for the Prime Media share price.

ACM buys Prime assets

The Australian Communications and Media Authority (ACMA), approved ACMs purchase from Bruce Gordon, owner of WIN Network and third-largest owner of Nine Entertainment Co Holdings Ltd (ASX: NEC).

The purchase increased ACM's stake in the company to 19.99% from its previous 14.67%. Under the Broadcasting Services Act (1992) any party which seeks to control 15% or more of a media company must first obtain the approval of ACMA.

ACM made the purchase one month previously.

The purchase has made ACM the largest shareholder in Prime Media, overtaking Seven West Media Ltd (ASX: SWM) major owner Kerry Stokes.

In a note to ACM staff, as reported by The Australian, part-owner Antony Catalano said:

The Prime Media Group is in a strong financial position, it is well-managed, and we believe it has an important role to play in the evolving regional media landscape.

ACM and Prime audiences have similar interests, aspirations and goals. We hope to explore ways in which we can work more closely to ensure we continue to deliver the highest-quality journalism for regional Australians.

As part of the deal, ACM will need to sell its regional newspapers in Bendigo and Wagga Wagga. This is to comply with Australian legislation.

Prime Media share price snapshot

Despite today's dearth of price movement, the Prime Media share price has been very successful over the past 12 months. In the past year, Prime Media's value has increased by 112.12%. Media companies suffered heavily from the COVID-induced market crash of last year.

Prime Media has a market capitalisation of $75.2 million.

The post Prime Media (ASX:PRT) share price unmoved as ACM tightens grip appeared first on The Motley Fool Australia.

Three sell ratings that caught my eye are summarised below. Here's why top brokers think investors ought to sell these shares next week:

Afterpay Ltd (ASX: APT)

According to a note out of UBS, its analysts have retained their sell rating and $36.00 price target on this payments company's shares. The broker notes that Commonwealth Bank of Australia (ASX: CBA) will soon be entering the buy now pay later market with its own offering. While the service is largely the same for consumers, it has a few key differences for merchants. One of those is that CBA won't be charging any additional fees (outside standard merchant fees), whereas Afterpay takes a small cut from of each transaction. Furthermore, the bank will allow merchants to put a surcharge to cover the costs, but Afterpay does not allow this. UBS fears regulators could eventually remove the no surcharge rule. Outside this, UBS believes its shares are vastly overvalued. The Afterpay share price ended the week at $108.30.

Flight Centre Travel Group Ltd (ASX: FLT)

A note out of Morgan Stanley reveals that its analysts have downgraded this travel company's shares to an underweight rating with a $17.50 price target. The broker made the move on valuation grounds after a strong run for its shares. And while it believes its earnings will improve materially once the pandemic passes, it isn't enough for a more positive rating. Especially given how its shares are now trading at a higher level than before COVID, when adjusting for its capital raising. The Flight Centre share price was fetching $19.35 at Friday's close.

Southern Cross Media Group Ltd (ASX: SXL)

Analysts at Morgan Stanley also have an underweight rating and $1.40 price target on this media company's shares. According to the note, the broker suspects that its negotiations with Channel Ten over a new deal will not be as favourable and could put pressure on its earnings. In light of this, it appears to believe investors should stay away from the company until a deal is announced and understood. The Southern Cross Media share price ended the week at $1.99.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

Here are some of the highlights from the ASX today:

Nine Entertainment Co Holdings Ltd (ASX: NEC)

The Nine share price fell 1% after announcing that the ASX 200 media business has signed a deal with WIN Corporation for a new regional television affiliation agreement.

This minimum 7-year agreement will result in WIN broadcasting Nine's metropolitan free to air television content from various 9 channels into markets including Tasmania, regional Western Australia, Victoria, Queensland and Southern New South Wales. Nine said this will provide seamless access to Nine's television content across all of metropolitan and regional Australia.

Under the new agreement, which commences on 1 July 2021, WIN will pay an affiliation fee of around 50% of its regional advertising revenue to Nine and provide airtime to Nine to allow promotion of Nine's assets across WIN's television and radio network. As part of the arrangements between Nine and WIN, WIN will also provide a sales representation service for Nine in Northern NSW and Darwin for a period of time.

Nine CEO High Marks said:

While our relationship with Southern Cross Media Group Ltd (ASX: SXL) has been strong over the last five years, the opportunities presented by the WIN Network to both extend the reach of Nine's premium content into more regional markets under one agreement, and to work co-operatively with them on a national and local news operation, means that this is the right time for us to return to WIN. The terms of this new affiliation agreement should be positive to Nine's earnings before interest, tax, depreciation and amortisation (EBITDA) from FY22 through the broader reach of Nine's channels and by enabling incremental efficiencies across both sales and news.

Westpac Banking Corp (ASX: WBC)

Today, big four ASX 200 bank Westpac noted that the Australian Prudential Regulation Authority (APRA) has today announced that it has closed its investigation into matters related to the AUSTRAC proceedings. This follows the conclusion of the Australian Securities and Investments Commission's (ASIC) AUSTRAC-related investigation in December 2020.

The $1 billion operational risk capital add-on, which reflects the bank's heightened operational risk profile, will remain in place until Westpac completes its remediation under the court enforceable undertaking (CEU).

APRA deputy chair John Lonsdale said:

Although the investigation has not found evidence of breaches of the banking act or the Banking Executive Accountability Regime (BEAR), APRA remains determined to ensure Westpac rectifies its risk governance weaknesses effectively and sustainably.

Under the enforceable undertaking, Westpac has clearly defined executive and board accountabilities for the implementation of its integrated risk governance remediation plan. APRA will be holding Westpac to account for the delivery of the required improvements.

The Westpac share price ended the day lower by 0.3%. 

Speedcast International Limited (ASX: SDA)

Speedcast announced today that it has completed the restructuring and it's going to emerge under new ownership, which sets into motion the winding up of Speedcast International Limited.

The new parent company will be called Speedcast Holdings III. The Speedcast business will continue to serve customers under Centerbridge Partners' new ownership.

Speedcast International Limited has no remaining material assets or liabilities having transferred its assets in exchange for the cancellation of its secured debt. Speedcast said that was done at a significant shortfall to the secured lenders. It will shortly initiate a voluntary liquidation process.

The post ASX 200 climbs, Westpac in the clear, Nine reveals a WIN-ning deal appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are sinking:

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is down 4% to $18.64. This appears to have been driven by profit taking after a strong gain on Thursday following the Government's announcement of a $1.2 billion stimulus package for the tourism industry. In addition, analysts at Citi have responded to the news by retaining their sell rating and $16.80 price target on the company's shares.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price has fallen 3% to $9.46. Investors appear to be selling safe haven assets like gold miners on Friday and buying risk on assets such as tech shares. This follows a very positive night of trade on Wall Street, which saw the Nasdaq index rise 2.5%.

Southern Cross Media Group Ltd (ASX: SXL)

The Southern Cross Media share price has plunged 9.5% to $2.00. The media company's shares have come under pressure today after Channel Nine advised that it will not be extending its regional affiliation with Southern Cross Media after it expires in June. Nine Entertainment Co. Holdings Ltd (ASX: NEC) has instead signed a deal with WIN.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price is down over 3% to $11.11. This decline means that the wine company's shares have now given back almost all their gains from earlier this week. A mixed response to its plans in the Americas has been behind the volatility. Yesterday Citi retained its sell rating and $9.30 price target on the company's shares.

The post Why Flight Centre, Northern Star, Southern Cross Media, & Treasury Wine are sinking appeared first on The Motley Fool Australia.

Let's take a closer look at what was announced.

What happened?

The Southern Cross share price is taking a dive today after the company (also known as Southern Cross Austereo) stated it has been advised Nine will not be extending its regional affiliation with the broadcasting company after it expires in June.

This morning Nine confirmed it's discontinuing its affiliation with Southern Cross Media and has instead signed an agreement with WIN Corporation. While losing its affiliation with Nine is a devastating blow for Southern Cross, it still has supply agreements with Seven West Media Ltd (ASX: SWM) and Network Ten.

Southern Cross stated that its ongoing agreements currently contribute around 20% of its television revenue.

The company will continue to broadcast Nine programming in the Spencer Gulf, where it also broadcasts Seven and Ten. Further, it broadcast's Seven programming in Tasmania, Darwin and central regions in an agreement that expires in 2022.

Broadcasting of Nine programming in regional Queensland, southern New South Wales and regional Victoria by Southern Cross Media will cease on 30 July 2021.

About Southern Cross

Southern Cross Media boasts a reach of 95% of the Australian population, a number that will likely soon fall following today's news.

The company owns 99 radio stations under the Triple M and Hit network brands.

Southern Cross also provides Australian sales representation for SoundCloud and Sonos Radio, as well as operating LiSTNR, a free audio platform.

Southern Cross Media share price snapshot

Over the past 12 months, the Southern Cross Media share price has fallen by more than 60%. The company's shares have, however, increased by around 27% over the last six months.

Based on the current Southern Cross share price, the company has a market capitalisation of around $584 million with approximately 264 million shares outstanding.

The post Why the Southern Cross Media (ASX:SXL) share price is tumbling 14% appeared first on The Motley Fool Australia.