Investors’ thumbs up to ASX stock Nine Entertainment
Nine Entertainment Co. surged more than 4% by afternoon trade on Friday as investors welcomed the company’s announcement of a major strategic transformation.
Nine Entertainment Co. (ASX: NEC)
on 30 January 2026 announced that it is has accelerated a major strategic transformation to reshape its asset portfolio towards higher growth and digital media businesses.
The company confirmed a series of portfolio changes including the acquisition of digital outdoor media group QMS Media, the sale of its broadcast radio assets and the conversion of its regional television business NBN into an affiliate model.
This change is expected to increase the contribution from digital growth assets to more than 60% of group revenue from FY27, up from around 45% in FY25 which will improve the overall quality of earnings.
The acquisition of QMS Media for an enterprise value of $850 million adds a fast-growing digital outdoor platform which has delivered a three-year revenue CAGR of 15% and operating margins of around 26%.
Management highlighted that the transaction is expected to be low double-digit earnings per share accretive in FY26 once cost synergies are included, with estimated pre-tax synergies of $20 million per annum by FY29.
The company also outlined that the combined transactions will result in a net cash outlay of around $601 million after using cash tax losses, while leverage is expected to remain within the company’s targeted range over the medium-term.
Nine Entertainment currently has a market capitalisation of $1.8 billion and is trading on a price/earnings ratio of 17.16 which is a rather conservative valuation as the business transitions towards higher growth segments.
The company reiterated that it expects higher EBITDA growth in the first half of FY26 compared to last year supported by good advertising conditions and the scale of its digital assets.
Nine Entertainment Co. also confirmed that it will release its FY26 interim results on Tuesday, 24 February 2026 and management believes the reshaped portfolio positions the company to better manage industry disruption while building a more diversified and digitally powered media group capable of creating of sustainable long-term shareholder value.
(Source: Company Announcements)
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