Purchase of Nine Entertainment Co (ASX: NEC)

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Purchase of Nine Entertainment Co
(ASX: NEC)

14th February 2023

Across the Australian Equity component of investor accounts we have bought Nine Entertainment Co. (ASX: NEC).

Nine is a leading Australian media conglomerate that was founded by the Packer family. It owns: 

The Nine Television Network
A portfolio of newspapers that includes The Age and the AFR
A commercial radio network
The subscription TV provider Stan
A 59% stake in Domain

We are positive on the long-term outlook for NEC for the following reasons:

Dominant market position
Strong operational performance
Robust balance sheet with strong cash flow and low debt

Nine has two key levers for value creation that we would like to highlight. 

Firstly, the evolution of the TV business: 

People are watching less free-to-air TV and more content through digital channels. Nine has ridden this wave of change well, by continuing to produce market leading content that can attract strong audiences across a range of screens.

The second key value driver is built on the Domain offering: 

Domain are currently building out the business in two ways. The first is increased penetration of higher value listings that put the seller’s property at or closer to the top of the list. The second is building out the agent services to help them manage and improve their businesses. Over time we expect this to drive earnings growth. 

We think it is suited to the portfolio because of its strong cash flow and attractive dividend yield. 

The purchase of Nine Entertainment Co. has been funded through the sale of Lendlease.

As always, thank you for your ongoing support, it is very much appreciated. If you have any questions or would like more information, please contact your adviser.

Warnings and disclosures

This material has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making an investment decision based on this advice you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a Product Disclosure Statement (“PDS”) relating to the product and consider the PDS before making any decision about whether to acquire the product. You will find further details of the service we provide and any cost to you within the Financial Services Guide. Any references to past investment performance are not an indication of future investment returns. Prepared by EP Financial Service Pty Ltd ABN 52 130 772 495 AFSL 325 252 (“Elston”). Although every effort has been made to verify the accuracy of the information contained in this material, Elston, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information.