u assume 80% of their television revenue they are doing to sit...

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stayer

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12/03/21

12:39

Post #: 51718523
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Originally posted by Bwatson ↑

Around 70% of Television advertising gone is not a small impact.. only 20% left, with expenses unlikely to drop that same 70%. Nine and Ten's spencer gulf earnings wouldn't even be 10% but i'm being generous here.

160 million revenue on a precovid basis. Let's see if they can scale down their TV costs rapidly, or if they can get someone else to replace. FY22 results will certainly feel the impact, and i expect TV EBITDA will go negative with the lag in downsizing usually related to such large step changes.

They're running above 13 P/E TTM (515M market cap after todays fall) and this will rise to around mid teens for FY22 (bar any step changes in the radio business, especially with jobkeeper going away), how quickly it comes back down depends on the strength of their business rationalisation from here.

SXL has historically traded between 8-12 P/E with some outliers, so I disagree it's got too much potential above 2 especially with this news.

Might make sense to let go of SWM contract too and focus on just Radio if the headcount required to maintain that is too onerous. Can they pull of Listnr? That's another key question for it being traded on higher than 10 P/E multiples (transformation from a media (10/P/E) to a growth tech (20+ P/E) company). Trimmed holdings today and took my gains, think it'll struggle to go far north of 2 in the near future. I think a reasonable buy in price is around 1.40s from here.

All IMO DYOR

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u assume 80% of their television revenue they are doing to sit idly by and do nothing -surely u are not serious with suggestion they just wind it down?

whilst it is likely 10 will have some negotiating power (also any extra revenue for them is a bonus!) , 10 is improving its offering generally- i assume there is no scope to take on more of seven because 7 already covers all these areas?

SXL Price at posting: $2.00 Sentiment: Hold Disclosure: Held
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