The Nine Entertainment Co. Holdings Ltd (ASX: NEC) share price has surged 7% on the ASX this morning after posting a steady half-year profit result.
What's in the results?
Nine reported a net profit after tax (NPAT) down 1% on prior corresponding period (pcp) of $172 million underpinned by 39% growth in Digital & Publishing earnings before interest, tax, depreciation and amortisation (EBITDA) in the half.
Revenue was down 1% on pcp to $709.8 million which was relatively stable given the big period of change that the company has recently undergone.
Nine reported ~54% of its revenue from Broadcasting, with the remaining 46% split across Digital and Publishing, Domain Holdings Australia Ltd (ASX: DHG) and Stan. The Domain business yielded a relatively unimpressive result amid the ongoing housing downturn and lower listing levels in Sydney and Melbourne.
The company also reported ~1.5 million active subscribers on its subscription Stan service, up more than 60% since 1H18, with management expecting to see the segment become profitability in Q4 2019.
From a cash flow perspective, Nine reported operating cash flow (pre-specific items, tax and interest) of $168.8 million and a pro-forma operating cash inflow of $77 million for the half.
It's been a busy year for the entertainment group as it finalised its mega-merger with Fairfax and saw a number of changes to its television contracts including the cricket-tennis coverage switch with Seven West Media Ltd (ASX: SWM).
The company's post-merger net debt position increased from $228.3 million for the wholly-owned group and $370.2 million for the consolidated group as borrowings increased to fund the merger.
Foolish Takeaway
Overall, I think this result from Nine was nothing spectacular but was exactly what investors would have hoped for given the past 12 months of change at the company. Management continues to target cost synergies, but I wouldn't be diving in just yet given potential headwinds and further consolidation in the Australian media space.
In the meantime, Fools can check out these top growth shares that have been tipped as market beaters.
