SWM may have a larger market cap than NEC but I would argue that NEC has the cleaner balance sheet of the two. Although I would welcome a drop in the current share price I can't see it dropping much from these levels, although I remain forever hopeful.
Taking out all the other content from SWM and just focusing on Channel Seven, the revenue has actually increased by 5.4% yet total expenditure has increased by 16.4%. The main reason for this was an increase in media content spend that went from 270.6m to 349.2m, an increase of 78.6m.
There isn't a break down of the spend but I would assume that most if not all went towards content and broadcasting rights for the Olympics. (Something that won't be mirrored in NECs half yearly).
We may hopefully also be seeing a bottom in the drop for FTA advertising spend with this article from The Australian today in a report regarding SWM;
"The company has retained its guidance for the television advertising market to be down low single digits, however management has been encouraged to see growth in February and March for the first time since 2014 and the market beginning to trade longer,” the company said. (SWM)
NEC Price at posting:
99.5¢ Sentiment: Buy Disclosure: Held
(20min delay)
