@Sparktastic When you say that the ‘Digital Transformation’ once hyped as the future of TV in this country hasn’t produced meaningful results.’ This is wildly incorrect.
• 7plus BVOD consumption is growing at 39% per annum with its audience increasing 32% year on year (before we factor in the massive new growth from the AFL and Cricket Digital rights which brings an additional 4 billion minutes of new consumption and a whole new audience to 7plus). • 7plus already brings in >$179m of revenue for SWM at 77% EBITDA margins which is more than half of SWMs EBITDA. (7plus earns >$139m EBITDA - $134M EBIT) • 7plus brings in a CPM ad rate that is 2x that of Metro Broadcast FTA and 3x that of Regional Broadcast FTA. • 7plus has already achieved a protected market position thanks to the smart TV prominence legislation.
I have never heard someone describe $134 million in Earnings Before Interest and Taxes (EBIT) as ‘not meaningful’ for a listed company that currently trades at a market cap of $230m!
At 15 cents per share SWM trades at less than 1.5x Mid Cycle Earnings of $155m NPAT, of which more than half of this $155m NPAT is made up of digital earnings from 7plus.
Right now, the entire market Cap of ASX:SWM could be justified multiple times over by just the profits that 7plus brings in.
SWM Price at posting:
15.0¢ Sentiment: Buy Disclosure: Held
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