I personally think that the chances of at least a 'Special Dividend' has a more than 50% chance if Labor wins the election. With 60 million in franking credits sitting on their books I think the pressure will be on them to do something with them.
As for the firming share price I think that you need to look at the changing dynamics of the regional areas of Australia. I think that a lot of investors when they think about regional networks think of small towns in the back of Bourke and not the Gold Coast, Illawarra, Coffs Harbour etc. thus underestimating the +30% population that PRT has access to.
This together with higher ratings for cricket and AFL than most expected, advertisers don't have much choice but to spend big on FTA networks.
From an advertisers perspective I would also assume that the big brand companies are really struggling in the digital age of advertising. They are now competing against every two-bit company with a limited advertising budget.
The structural decline in the 'big brands' is evident for all to see and I wouldn't be surprised to see them greatly reducing the amount they spend on digital advertising and moving back to more traditional advertising platforms ie TV, radio and print. (This is already starting to happen with Facebook and Youtube).
Also with a likely slowing in the Australian economy, I can guarantee that with the pressure beginning to develop on wages (and interest rates haven't even increased yet), one of the first things to be cancelled by consumers will be the ever increasing number of subscriptions to the likes of Foxtel, Stan, Netflix etc... At the end of the day Free to Air TV still has the one advantage that most of its competitors don't and that is that it is still Free.
PRT Price at posting:
26.5¢ Sentiment: Buy Disclosure: Held
