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Late last week MFE reported its H1 numbers. Like in the Q1, the Q2 operating profit was clearly disappointing.
We have to admit that, despite MFE’s stock being down by 60% ytd and looking deeply discounted, it’s difficult to interest investors in buying the TV of tomorrow when linear TV still has not found the right model. The years go by and revenues (in particular TV advertising) continue to decline yoy while operating costs are slightly increasing.
Companies: MFE-MediaForEurope NV Class B
While Q1 revenues were broadly in line with expectations, up by 3.2% yoy, the operating profit was disappointing at only €15.3m (vs €67.9m in 2021).
This does not augur a good 2022 as Spanish advertising revenues already look to have contracted by at least 10% in April.
We remain at Buy on the stock which has already lost 45% since the beginning of the year. We will however revise downward our 2022 forecasts.
Mediaset has announced the creation of a new holding company, MFE (Media For Europe), which will totally control its Spanish and Italian assets. This operation is clearly aimed at creating a pan European media and entertainment group to compete with Netflix, HBO or Disney.
The merger of Mediaset and Mediaset Espana should generate €100-110m of synergies by 2023. Be aware, however, that all the synergies of the world can’t prevent the decline in the European TV advertising market.
2018 revenues were down by 4% yoy at €3.4bn, quite in line with our estimates at €3.43bn. The Q4 was, as expected, weak in Italy with the expected process of digital transformation of the Pay TV business (as a reminder the group signed a content deal with Sky in April 2018 to stop losing money in that activity but with less revenues as a counterpart).
EBIT was, however, very poor at €75m. This is due to the realignment of the accounting of Pay TV rights (for c.€200m) and, adjusted for this item
Mediaset has released a poor Q3 with revenues down by 6.6% yoy, while the EBITDA was down by 25.4% yoy. The Q3 net result was also negative at €-15.8m. Note Ei Towers is for the first time consolidated by the equity method. The reason for this separation is the exit of the transmission towers company from the group’s area of consolidation at the beginning of Q4 18 following the successful public offering made by Ei Towers. Note the sale by Mediaset of its controlling interest – the company now o
Mediaset reported Q2 17 revenues slightly above consensus at €956.4m (-0.2%). This implies the H1 17 revenues dropped by 1.3% to €1,845.7m (H1 16: €1,870.6m), impacted by declining Italian pay-TV, Italian other revenues and Mediaset Espana revenues (-2.5% to €508.5m for the latter).
Consolidated H1 17 EBIT positively improved by €116.7m to €212.8m (i.e. an operating margin moving from 5.2% to 11.5%), namely highlighting a recovery from the last year’s loss-making situation in Italy (H1 17 EBI
Vivendi announced yesterday evening that it owns 3.01% of Mediaset and is intending to continue to acquire shares “depending on market conditions, until possibly becoming Mediaset’s second largest industrial shareholder, which, to begin with, could represent between 10% and 20% of the Mediaset share capital”.
The Italian group, which was apparently not aware of this “attack”, said it will continue the ongoing legal battle with Vivendi and block any Vivendi takeover by all possible means.
Once upon a time (say about 6 months ago), Mediaset and Vivendi concluded a splendid strategic alliance: the French group was to acquire 100% of Mediaset Premium, while each entity would be taking a 3.5% stake in the other on the occasion. The ambition was to build a pan-European OTT platform and to create a southern European content and VOD powerhouse…
The announced wedding has since moved to the divorce legal battlefield, maybe paving the way for a ménage à trois.
Mediaset H1 16 revenues rose by €150m to €1,870.6m, driven by improving Italian advertising trends (+8.5% or +8.5% to €1,349.7m) and a continuing satisfactory Spanish performance (+9% to €521.6m). Conversely, the group’s EBIT dropped by 29% to €97.3m (the operating margin moving from 8% to 5.2%), namely highlighting a loss-making situation in Italy (-€52.8m versus €26.5m a year earlier, while Spain improved from €111m to €150.1m) as pay-TV entity Mediaset Premium, is no longer reported as a disc
Following a strategic deal (please refer to our 11 April 2016 Latest), Mediaset’s Italian pay-TV operations (88.9% stake in Mediaset Premium) were due to be sold to Vivendi in exchange for a 3.5% stake in the French group (deal initially expected to be completed by end-September 2016).
On 25 July 2016, Vivendi officially made an alternative proposal, confirming the exchange of 3.5% of Vivendi’s share capital with 3.5% of the share capital of Mediaset but proposing to buy only 20% of Mediaset Pr
Last Friday evening, Mediaset and Vivendi signed a strategic alliance, each group taking a 3.5% stake in the other (Mediaset transferring existing treasury shares to Vivendi and receiving in exchange existing or newly-issued Vivendi shares). Simultaneously, Vivendi will receive the 89% stake still owned by Mediaset in its pay-TV operation, Mediaset Premium, while buying back the remaining 11% owned by Telefonica.
There will be a three-year lock-up period with Vivendi not authorised to buy share
Although Mediaset outperformed the Italian TV advertising market over H1 15 (-0.7% versus -3%), its total revenues for the period were down 0.2% to €1,721.1m as the Italian businesses remained in the red (-1.1%), offsetting the positive Spanish trend (+2.2%). The group EBIT margin slightly improved from 6.3% to 8% thanks to the Spanish part (23.2% versus 17.1%) and Ei Towers (29% compared with 28.4%), while the integrated Italian activities remained loss making (-€7.7m over the period versus -€3
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9M 2022 results demonstrate CentralNic’s ability to accelerate organic growth in an increasingly tough macroeconomic environment. The Online marketing division doubled revenue organically in the LTM to September and accelerated group organic growth to 66% from 62% in the LTM to June 2022. We believe CentralNic is well positioned to strongly grow earnings through organic growth, operating leverage and acquisitions: Its unique cookie-less marketing platforms are taking market share, the company’s
Companies: CentralNic Group Plc
Dish of the day
BWP REIT joins the Wholesale Segment of the International Property Securities Exchange (IPSX). BWP REIT is a newly formed single asset company and has raised £35m by issuing 35m new ordinary shares at 100 pence per share to acquire Bridgewater Place, an office-led mixed use property in central Leeds and valued at £63m. The property is one of the tallest buildings in Yorkshire, comprising 234,000 sq. ft of office space, and is close to 90% let to EY, as well as multinatio
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Dish of the day
Looking Glass Labs (NFTX) joins the Access Segment of the AQSE Growth Market. The company is engaged in digital agency specialising in immersive XR metaverse design, non fungible token architecture and virtual asset royalty streams. Looking Glass Labs is currently listed on the NEO Exchange (Canada). Market Cap £18.8m.
EDX Medical Group joins the Access Segment of AQSE Growth Market. (Formerly TECC Capital plc) EDX operates a molecular biology and diagnostics laboratory
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This quarter’s key observations
• Subsector performance: UK Software was the only saving grace in the technology sector during the three months to 10 November, with an aggregate share price movement of +8.1% vs. an average of -12.0% for the other five subsectors. This was largely driven by strong performances from Microfocus International (+70%, following an announced $6bn takeover by Canadian software provider OpenText) and WANdisco (+52%, after strong interim results in September and a po
Companies: CNIC SYS BIG DEVO
CentralNic (CNIC) delivered high double-digit organic revenue growth in the nine months to 30 September (9M22), supplemented by five acquisitions year to date. Revenues in Online Marketing, now the group’s largest business segment (78% of 9M22 revenues), were up 147% y-o-y, driving overall performance and highlighting sustained market demand for privacy-safe marketing solutions. Adjusted EBITDA as a percentage of net revenue expanded by more than 7pp y-o-y, illustrating stronger operating levera
Companies: M&C Saatchi plc
Dish of the day
No joiners today.
Leavers: Avast Plc has left the Premium Segment of the Main Market.
What’s cooking in the IPO kitchen?**
Fintech Asia, an investment company established to acquire businesses in the Fintech sector, primarily targeting the Asia-Pacific region, intends to join the Standard Segment of the Main Market. The Company has raised £1.455m through the placing of 3,010,000 ordinary shares of no par value, with net proceeds of £841,845. Expected 15 September.
Companies: BPM DELT TRT YU/ TM17 BMN TRMR
What’s cooking in the IPO kitchen?**
Sondrel Holdings plc, a UK founded and headquartered fabless semiconductor business providing turnkey services in the design and delivery of complex, high end 'application specific integrated circuits' (ASICs) and 'system on chips' (SoCs) for leading global technology brand, intends to join AIM. Anticipated Mkt Cap £48.1m. £20m to be raised. Expected 21 October 2022.
TECC Capital plc, to be renamed EDX Medical Group, intends to join the AQSE Growth Market. ED
Companies: OHG IPX SOLG OBD TMO ABDX
In 9m 22, total advertising revenue decreased by 2% including a weak September 2022 (-14%). ITV Studios performed well with organic revenue up +13% in 9m 22. For 2022, total advertising revenue should decrease by -1/-1.5% given the broadcasting of the Football World Cup in Q4 22 and ITV Studios’ revenue should exceed the 2019 level. ITVX (AVOD/SVOD) is a key driver for digital revenue. The full launch of free content (>10,000 hours) is due on 8 December 2022.
Companies: ITV PLC
Companies: Eagle Eye Solutions Group PLC
No Joiners Today.
No Leavers Today.
What’s cooking in the IPO kitchen?
Summerway Capital plc, (AIM:SWC) to be renamed Celadon Pharmaceuticals plc following completion of the acquisition of Vertigrow Technology Ltd, is to relist on AIM. Vertigrow is a UK based pharmaceutical Company specialising in the researching, growing and supply of medicinal cannabis, for a total consideration of £80m. Summerway is an investing company focused on investment and acquisition opportunities acr
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Dish of the day
Cooks Coffee Company Limited (NZX:CCC) has joined the Access Segment of has dual listed joining the Access Segment of the AQSE Growth Market under the ticker COOK. Cooks Coffee has a total of 111 outlets in the UK, Ireland and across its international markets. It is the 4th largest coffee chain in the UK (behind Starbucks, Costa and Caffè Nero). The company currently owns the Esquires Coffee and Triple Two Coffee Brands. Esquires was founded nearly 30 years ago and Cooks
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The Big Book 2022 includes our highest conviction Best Ideas for 2022. In 2021 our Best ideas outperformed by 24%, extending our track record (>10% outperformance on average over the past decade). We have again divided our coverage into six distinct themes to create our Matrix. We have added two new categories this year: ESG and Pricing Power, both of which will be fundamental investment themes for 2022. We look forward to discussing our ideas with you.
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Singer Capital Markets
Reach’s update reveals encouraging underlying performance, with Q3 sales decline of -2% y/y decelerating from Q2 (-3%) even inclusive of a advertising blackout in September. Underlying growth was in-line with SCMe forecasts, as Digital revenue growth accelerated to +6% y/y (Q2: +0%) reflecting: 1) user engagement initiatives and returns on focused editorial investment driving traffic (Digital page views: +6% y/y); and 2) stabilised Digital yields as a greater share of inventory was allocated to
Companies: Reach plc
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