Will HT&E Limited be able to manage its way through the current situation?

Team Veye | 08 Apr 2020 ASX - HT1
Will HT&E Limited be able to manage its way through the current situation?

HT&E Limited (ASX: HT1)

HT&E response & initiatives to COVID-19

HT&E Limited [ASX: HT1] on 6 April 2020 announced details regarding the measures it had been undertaking to deal with the impact and escalating uncertainty from COVID-19.

(Chart source: TradingView)

Key Points 

  • HT&E entered 2020 with no debt, $111m net cash and $250m undrawn facilities 
  • Total non-repeat cost savings of circa $10.5m in 2020 
  • Reduced work hours and pay-cuts to generate further cost savings of $1.0m per month 
  • Assessing eligibility to JobKeeper package benefits announced last week 
  • Radio broadcasting unaffected across all metropolitan networks 
  • Cody Outdoor in Hong Kong is implementing cost cutting programme to combat political unrest and COVID-19 impact

 

HT&E’s ARN remains the #1 metropolitan radio network in Australia, with ratings success in 2019 and the first survey of 2020 starting to deliver commercial share gains. HT&E is in a strong financial position, with $111m in net cash and $250m of undrawn debt facilities as at 31 December 2019.

The impact on operations of a working from home policy has been controlled and managed effectively. ARN’s technology investments have ensured radio broadcasts have been unaffected, with all staff able to work from home efficiently. Under any potential tightening of lock-down measures across the community, ARN is confident all of its shows will remain broadcasting uninterrupted across its network. (Data Source – Company Reports)

 

Veye’s Take

HT&E has actively managed its balance sheet and cost base over a number of years, which has placed the company on a relatively strong footing leading into COVID-19. The company has commenced a further series of cost control and operational measures across the business in anticipation of a protracted economic downturn. The lean cost structure of its business combined with a strong balance sheet and no debt, provide the company with the strongest possible footing to manage its way through the current situation. The stock appears to be moving in a bullish rectangle. It has strong support at the current price level. Maintaining this support, it can have the potential of having a break out on the upper side. We give a “Hold” recommendation on “HT&E Ltd” at the current price of $1.24

Disclaimer

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