TIP DATE 30 SEP 2015TIP PRICE $0.365PRT - Share Price$0.300 0.275 0.250 0.225 0.200 0.175 0.150 PRIME MEDIARegional televisionManagement has reduced debt dramatically over the last 2-3 years after eliminating the dividend. This achievement has been made despite the payment of a $15m cash lump- sum to Channel 7 to renew its program deal.In late August at its FY19 result, the company made clear it can fully repay its interest- bearing debt in the current financial year (FY20) and management forecast FY20 EBITDA of $23m-$25m leading to NPAT of $8m-$10m, or EPS of 2.2 cents to 2.7 cents. This is music to Under the Radar’s ears.Once debt is repaid, the company will be able to make capital management a priority. With the growth of the Tokyo Olympics in FY21 ahead of it, PRT compares favourably with other investments in a low yield market despite no actual yield. This now looks like a classic cigar-butt investment, which should provide a positive return.This is a value play where a market leading regional television affiliate is valued at less than 40% of sales and 6 to 8 times earnings. Broadcasting is a business with high fixed costs. Revenue and results can be lumpy and unpredictable, but we think PRT can still make some good money and free cash flow.
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TIP DATE 30 SEP 2015TIP PRICE $0.365PRT - Share Price$0.300...
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