ASX media shares have had a volatile year in 2020, having plunged to their lows during the height of the pandemic in March, followed by a strong recovery in the second half of the year.
Media shares are generally exposed to the cycle of the economy, as advertising budgets are usually the first expense to get cut at the slightest hint of a downturn.
The pandemic has shown, however, that those companies that have diversified content across the digital platforms are the ones who are more resilient. The sector has also seen a lot of mergers and acquisitions over the last few years.
Here, we’ll take a look at 4 ASX media shares that have done particularly well in 2020.
| Company | 1-year share price performance | Current share price | Market cap |
|---|---|---|---|
| 1. NZME Ltd (ASX: NZM) | 66% | $0.62 | $0.13 billion |
| 2. Nine Entertainment Co. Holdings Ltd (ASX: NEC) | 29% | $2.32 | $4.02 billion |
| 3. News Corp (ASX: NWS) | 13% | $23.14 | $13.71 billion |
| 4. HT&E Ltd (ASX: HT1) | 9% | $1.85 | $0.49 billion |
1. New Zealand Media and Entertainment
The NZ-based media company has had a fantastic year, with its share price rising by 66%.
NZME owns a portfolio of newspapers, radio stations, and digital platforms in New Zealand, and its content is accessed by more than 3.2 million Kiwis.
The company delivered a solid first-half FY20 ending 30 June, reporting a 5% growth in earnings before interest, tax, depreciation, and amortisation (EBITDA) to NZ$28.9 million.
That growth was underpinned by soaring readership of its flagship online news website, the New Zealand Herald, as Kiwis flocked to trusted sources of information on the pandemic.
This propelled the platform to become the number one news website in New Zealand in 2020.
2. Nine Entertainment
The Nine share price has done fantastically well this year, rising by 29%.
In its last financial update to the market two weeks ago, the media giant said that trading conditions have continued to improve, with EBITDA for the six months to 31 December expected to be up by more than 40%.
Of particular note, Nine’s December quarter is expected to show growth in metropolitan free-to-air advertising revenue of almost 20%. Its digital platform Domain has also shown solid growth during the pandemic.
Nine owns some of Australia’s well-known media brands including The Australian Financial Review, the Nine Network, and the Domain platform.
According to its financial report, Nine generates 90% of its earnings from its Nine Network channel – one of only three metropolitan television channels licensed to broadcast free-to-air in Australia. The total market for free-to-air advertising is $2.7 billion, of which Nine commands the number one position at 39%.
3. News Corp
The News Corp share price has done surprisingly well this year, rising by 13%, despite the pandemic affecting its advertising clients.
Interestingly, the company’s financial results don’t seem to support its share price performance.
In the last two quarters, the company has reported falling revenues. Its fourth-quarter FY20 showed revenues of $1.92 billion, a 22% decline compared to the prior year. Revenues declined again by 10% in the first-quarter of FY21 to $2.12 billion.
The media giant is no stranger to the average Australian. It’s owned and co-chaired by former Australian Rupert Murdoch, alongside his son Lachlan.
The company owns tabloid newspapers – The Daily Telegraph, The Herald-Sun, as well as newspapers such as The New York Post and the Wall Street Journal. It also owns a significant stake in online property classifieds company REA Group Ltd (ASX: REA), as well as a stake in pay-TV operator Foxtel.
The money-losing Foxtel has been a target of takeover, with the company rejecting an offer from an unnamed buyer back in November.
4. Here, There, & Everywhere
HT&E, or “Here, There & Everywhere” as it’s formally called, has had a respectable 2020. The HT&E is up by 9% over the year, at the time of writing.
The media company owns regional radio stations, such as the KIIS Network, Gold FM, The Edge, and Canberra’s Hit104.7 and Mix106.3 stations.
The company is currently involved in a lengthy legal battle over the way it accounted for the sale of some of its New Zealand assets.
In April, HT&E emerged as a major shareholder in outdoor advertising business oOh!media Ltd (ASX: OML), after buying $15 million worth of shares.
In its half-year FY20 results, the company reported top line revenue of $93 million, down 29% over the previous year. This is despite an increase in radio consumption during the COVID-19 lockdown period. No guidance for the rest of FY20 has been released.
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More reading
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- REA Group (ASX:REA) share price on watch after acquisition update
Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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