Nova Entertainment signals strong 2014 profit growth
In an unusual step, Lachlan Murdoch owned Nova Entertainment has publicly released a profit guidance for the group for this (calendar) year.
As a private company, it is not required to guide the market on financial performance. The guidance follows a report issued by media analyst Bob Peters .
Nova CEO Cathy O'Connor had previously stated the groups ebitda was more than $40 million for 2013. Bob Peter's analysis, which was obtained via ASIC ( public ) records, suggests a considerably lower figure than that.
However, the group under O'Connors guidance has enjoyed strong performance with good ratings and revenue growth and is suggesting a surge in profit for this current year. O'Connor says that Nova Entertainment will show a 20% increase in profit (ebitda) for 2014, implying a figure of around $50 million.
It is believed that Lachlan Murdoch's company Illyria paid in excess of $200 million for the group to its UK owners DMGT. There has been wide speculation that the Nova group will be sold , given its unlikely there will be any change to the two out of three rule. This has been denied strongly by Mr Murdoch.
The company has been highly successful under Murdoch's ownership and O'Connors leadership since 2009. The Founder of DMG Paul Thompson originally launched the company in 1996 with the vision to build a national FM Network, becoming the only person ever to have built two successful national FM radio networks in Australia.
Speaking in the Financial Review; O'Connor said:
“We can also confirm that the EBITDA result for the company for the current 2014 calendar year will increase again by a minimum of 20 per cent on the 2013 number, demonstrating strong growth well ahead of the radio market and the effectiveness of the company’s growth strategies.”
Commenting in the AFR article, Citigroup media analyst Justin Diddams has said the battle for revenue share between Nova and the listed companies Southern Cross and APN News & Media “represents a potential risk to revenue growth in the sector”, and has forecast no growth in metro radio for the next two years.