The Nine Entertainment Co. Holdings Ltd (ASX: NEC) share price has closed 3.2% higher at $1.94 per share this afternoon after the company announced the completion of its Australian Community Media and Printing (ACM) sale.
What did Nine announce to the market?
Nine advised that on 30 June 2019 it completed the sale of ACM to a company controlled by interests associated with Antony Catalano and Thorney Investment Group, as announced on 30 April this year.
Nine said it received proceeds of $105 million (subject to the usual post-completion adjustments to be made in coming months) with a further $10 million to be received in 12 months' time.
At this stage, management said it is intended that these funds will be used to reduce the Group's indebtedness.
The company's first-half financial results reported a net profit after tax of $140.2 million but has also been pushing its debt higher in the last 12-18 months, with total debt of $291 million recorded in 2018.
How has the Nine share price performed this year?
Overall, the Nine share price has managed to bounce back from the sharp decline in domestic equities we saw in the second half of last year to climb 43.7% higher so far this year.
The company's results showed healthy profitability and a turnaround of sorts given the broader media trend of increasing competition and declining margins.
The company's merger with Fairfax was a clear bid to offset the declining profitability in the sector and based on the first half-year accounts we saw in February, it's a case of so far, so good for the Aussie icon.
However, the story isn't all rosy for Nine investors with the stock currently trading below what it was 5 years ago, something which even the 5.2% dividend yield can't compensate for.
In my view, investing in the print media is a little risky given the well-known decline and consolidation in the industry, but at an earnings multiple of just 8x, Nine may find its way into the buy zone after the release of its full-year results in August.
