Nine shares drop after revenue down 11%

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Nine is reporting an 11% drop in revenue for the third quarter, following a poor summer of cricket and sluggish start to the ratings year.

It claimed the Cricket was affected by weather and “the standard of the competition.”

The results follow disappointing ratings for Australia’s Got Talent, The Farmer Wants a Wife and Reno Rumble plus an earlier Easter.

Nine shares plunged 24.7% to $1.14 in morning trade.

The advertising market in the March quarter remained subdued. Nine’s ratings during the period were softer than anticipated, which has impacted FTA revenue share. In particular, Nine’s Summer of Cricket was adversely impacted both by the weather and the standard of the competition, with c30% of scheduled play days lost.

For the quarter, Nine’s Television revenues were down c11%, against Q3 FY15. This was also impacted by the earlier timing of Easter this year and the absence of the Cricket World Cup event.

The Free-To-Air advertising market is now expected to record a low single digit decline for FY16, versus our previous guidance of `flat to down marginally’. Reflecting the disappointing ratings start to 2016, Nine’s share is now expected to be c37% for the year.

Given the revenue environment, the Company continues to focus on all cost lines, with reported TV costs expected to be at least 4% lower across the year, notwithstanding higher-than-expected legal expenses incurred during H2.

The trends experienced in Digital in the first half, have continued in the second half.

The Company’s full year results will be released on August 25 2016.

Nine has made gains in morning TV due to Today while Here Come the Habibs! has been renewed as its sole new success in 2016. You’re Back in the Room is also off to a positive start.

16 Comments:

  1. When they show a film (The Wolf of Wall St) 40 minutes late (it finished at 1AM), and then have Reno Rumble popups all the way through the show you don’t have to ask why Nine’s in deep doo doo

  2. Secret Squïrrel

    “…the standard of the competition.”
    Think this affected AGT too. No excuse for RR which is both poorly made and poorly cast.

  3. When the company was floated it was heavily overvalued – as profit was low.. We may see another Dick Smith scenario again if they are not careful…….

  4. I don’t think I watch anything on channel 9, its all so boring, especially the cricket! I can’t stand it, not everyone loves sport, what about some decent dramas and movies?

  5. Tonight’s program line up could explain why Channel 9 is in the doldrums, at least in this household. At 7 p.m., A Current Affair. Why are people still watching this puff piece that passes itself off as investigative journalism. Spare me another story on Woolworths, Coles or Aldi and who has the best quality washing powder. At 7:30 p.m., we have the delightful Married At First Sight. This pseudo marriage program is only for those desperate for their 15 minutes of fame. Finally at 8:40 we have another renovation program named Reno Rumble with fake tears, tans and tantrums. By the time this program is scheduled to finish at 10:40 we’ve been witness to three turkey programs from Channel 9. Need I say more.

    • MAFS is not really my preferred genre, and I’m cynical about the (non) legality of the wedding. That said, tonight’s episode was well-cast and well told. Anybody who likes The Bachelor would probably like tonight’s episode.

  6. Nine has been lacking anything that competes against MKR and anchors their later slots. Married at First Sight and YBITR will help with that.

    Flat pitches and ed balls that hold their shape, swing or seam didn’t help the cricket either.

  7. So David Gyngell made $17 million from the public float of the Nine Network and hung around for a year or so and then left. The share price has steadily dropped since the float and now is around 50% of its issue place. The new CEO is left to carry the can and they blame the cricket for the poor performance. In a digital age increasingly dominated by US monsters a local dinosaur is slowly dying. It is a shame. It does not bode well for local production.

  8. “The cricket was affected by the weather and the standard of the competition”. You mean one of the driest summers we’ve ever had and the almost endless stream of sunny days? Cricket as a whole has been on the downhill slide for the past five or so years. The cult of “Richie” is over, Tony Greig has also gone and Nine’s cupboard is now bare. How much longer they can keep this turkey game on the main channel is anybody’s guess. In the past Nine was able to win the ratings with the cricket and that provided a springboard to their other programs. Now their whole business model has collapsed and the caravan – as well as the viewers – have moved on.

  9. I’ve said it before and I’ll say it again – 9 have the crappiest programs, all repeats and reno shows it seems to me, so I hardly ever watch it. Obviously I’m not alone.

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