At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is on course to build on yesterday’s solid gain. The benchmark index is currently up 0.7% to 6,726.8 points.

Here’s what is happening on the market today:

Zip capital raising.

The Zip Co Ltd (ASX: Z1P) share price is pushing higher today after announcing a $150 million capital raising. The buy now pay later provider has raised $120 million from institutional investors at a 4.1% discount of $5.34 per new share. It will now seek to raise a further $30 million via a share purchase plan. These funds will be used to support its US growth, UK expansion, and product development.

A2 Milk trading halt.

The A2 Milk Company Ltd (ASX: A2M) share price was placed into a trading halt this morning at the company’s request. The fresh milk and infant formula company made the request so it could look at the impact of new “information” on its FY 2021 guidance. It commented: “We are requesting a trading halt to provide us with additional time to properly consider the current information and to consider new information as it becomes available, and inform the market.”

No dividend from Sydney Airport.

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is dropping lower today after it released an update on its dividend plans. According to the release, the airport operator will not be paying a final dividend in FY 2020. Management explained that it made the decision “given the continued significant impact of COVID-19 on the business performance of Sydney Airport over the second half of the calendar year.”

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Thursday has been the Perenti Global Ltd (ASX: PRN) share price with a 7% gain. This is despite there being no news out of the mining services company. The worst performer has been the Service Stream Limited (ASX: SSM) share price with a 12% decline. This means the network services company’s shares are now down 23% in the space of two days following an NBN update.

More reading

• Citigroup picks the best ASX retail stocks to own for 2021
• Why the a2 Milk Company (ASX:A2M) share price is in a trading halt
• Sydney Airport (ASX:SYD) share price lower on dividend and traffic update
• Why the Bapcor (ASX:BAP) share price is rocketing 9% higher today
• Why 2021 may be an even better year for ASX investors

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended Service Stream Limited. 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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Shares in public relations and marketing company WPP Aunz Ltd (ASX: WPP) shot up 22% today as the company emerged from a trading halt. This follows 2 major announcements today.

WPP AUNZ this morning reported an upbeat outlook for FY21, and also announced a revised takeover offer from its parent WPP to 70 cents a share, up from 55 cents.

At the time of writing, the WPP AUNZ share price is trading at 70 cents, up 12 cents.

Strong trading outlook update

The PR company provided business outlooks for the financial year ending 31 December 2020 (FY20), and also the financial year ending 31 December 2021 (FY21). 

WPP AUNZ advised its FY20 net sales are expected to be between $607 million and $610 million, a decline of around 14% to 15% on FY19. This is primarily due to the impact of COVID-19.

The FY20 headline earnings before interest and tax (EBIT) is expected to be $59 million to $62 million.

For FY21 meanwhile, the company expects to see net sales of between $630 million and $650 million, an increase from FY20.

Headline EBIT  is also expected to come in higher than FY20, between $85 million and $95 million.

WPP AUNZ is also on track to deliver $70 million in cost savings for 2020. These sustainable cost measures are expected to provide a benefit of approximately $65 million in FY21.

The company expects to declare a dividend as part of its FY20 result, which will be announced in late February 2021. 

Takeover proposal update

Also today, WPP AUNZ advised that its parent company, British-based WPP plc (LSE: WPP), has lifted its offer price to buy out the remaining shares it doesn’t already own to 70 cents a share.

The offer – originally announced on 30 November – was previously at 55 cents, and was revised as WPP agreed to WPP AUNZ declaring and paying total and special dividends of up to 15 cents a share. The new offer values the WPP AUNZ at at an enterprise value of $717 million.

About the WPP AUNZ share price

The WPP AUNZ share price has increased by around 5% this year, after plunging by 66% to 18.5 cents in March – its 52-week low. The 52-week high on the other hand, is 63.5 cents.

The company commands a market cap of $485 million.

More reading

• Meet the latest ASX stock to come under the takeover spotlight
• ASX stock of the day: WPP Aunz (ASX:WPP) shares surge 30%

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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ASX retail stocks have been one of the surprise winners on the market in 2020, but are they still good bets in the New Year?

While the S&P/ASX 200 Index (Index:^AXJO) is struggling to reclaim all its lost ground during this COVID‐19-stricken year, the consumer discretionary sector is sitting on gains of over 7%.

Many of the listed players have benefitted from the COVID shutdown at the expense of privately-held retailers.

ASX retailers’ surprising tailwind in 2020

This would have surprised many ASX investors as recessions normally spell bad news for the entire consumer-exposed industry.

However, government cash handouts have given our economy a big and much needed boost. Online retailers and those that sell products aimed at stuck at home consumers have shined.

But as the world regains its footing after the pandemic, some are questioning if these ASX stock outperformers have passed their “best by” dates.

Are ASX retail stocks still worth buying?

This is a fair question as many have hit record highs and are not looking good value. But they can at least enjoy a last $54 billion hoorah.

“After a very difficult year, we expect consumers will treat themselves, their family and friends,” said Citigroup.

“Conditions are ripe for a great Christmas for retailers. Households have more cash, demand for home and food items is likely to be strong and inventory positions are lean, leading to good gross margins.”

Cashed up consumers make these ASX

The broker noted that households would normally spend $3,700 in December. It looks like a reasonably safe bet that this will happen again.

The average bank balance has increased by $12,500 and credit card debt has reduced by just over $500.

“Online sales growth is tapering off, but overall spending looks strong with a late surge likely next week,” added Citi.

“Our strongest feedback is in liquor, electronics and sports.”

ASX retail stocks to buy in 2021

While investors may be nervous about momentum carrying through in to 2021, Citi remains bullish on the sector.

This is particularly for retailers in housing and grocery, where industry conditions are more resilient.

The ASX retail stocks that Citi is putting on its shopping list for 2021 include the Woolworths Group Ltd (ASX: WOW) share price and Super Retail Group Ltd (ASX: SUL) share price.

Others that make the cut are the Baby Bunting Group Ltd (ASX: BBN) share price, Bapcor Ltd (ASX: BAP) share price and Harvey Norman Holdings Limited (ASX: HVN) share price.

More reading

• Why the Bapcor (ASX:BAP) share price is rocketing 9% higher today
• Why 2021 may be an even better year for ASX investors
• Could ASX retail shares be the best ASX shares to own right now?
• What today’s economic outlook means for the BHP (ASX:BHP) share price
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Brendon Lau owns shares of Woolworths Limited. The Motley Fool Australia owns shares of and has recommended Bapcor and Super Retail Group Limited. The Motley Fool Australia owns shares of Woolworths Limited. 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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The A2 Milk Company Ltd (ASX: A2M) share price won’t be going anywhere today after being placed in a trading halt before the market open.

Why is the a2 Milk Company share price in a trading halt?

This morning a2 Milk Company requested an immediate trading halt after it became aware of information that could have an impact on the guidance it provided in late September.

Management explained: “We have become aware of information which may require us to release an announcement to revise our previously issued guidance to the market. We are requesting a trading halt to provide us with additional time to properly consider the current information and to consider new information as it becomes available, and inform the market.”

No other details were provided in relation to what this “information” is.

What is a2 Milk Company’s current guidance?

In late September A2 Milk Company provided guidance for first half revenue in the region of NZ$725 million to NZ$775 million and full year revenue in the region of NZ$1.8 billion to NZ$1.9 billion.

This represents a 3.9% to 10.1% decline for the first half and then a 4% to 9.8% increase for the full year.

Management is also forecasting an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 31%. This would result in EBITDA of NZ$558 million to NZ$589 million for FY 2021, up 1.5% to 7.1% from NZ$549.7 million a year earlier.

Is a2 Milk Company going to downgrade its guidance?

At this stage it is unclear whether a2 Milk Company is going to be downgrading or upgrading its guidance.

However, the request for a trading halt is reasonably ominous and appears to be hinting at a downgrade.

Particularly given the unpredictable trading conditions the company has been facing due to pantry destocking and weakness in the daigou channel.

When giving its guidance in September, management commented: “This disruption in the daigou channel is impacting our September sales and it is currently anticipated that this will continue for the remainder of the first half of FY21. Sales in the daigou channel represent a significant proportion of infant formula sales in our Australia & New Zealand (ANZ) business and, as such, we now expect ANZ revenue to be materially below plan for the first half.”

An update is likely to be released to the market on Friday morning.

More reading

• Got cash to invest? Here are 3 ASX growth shares to buy
• Top ASX shares to buy in 2021
• 10 highly rated ASX shares to buy in 2021
• 5 ASX shares rated as buys by top fundie
• 2 ASX growth shares to buy for big returns in 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

At first glance, this has been a great year for investors in Facebook (NASDAQ: FB). As of this writing, Facebook’s 33% year-to-date stock price gain is nearly three times greater than the S&P 500 Index‘s (INDEXSP: .INX) return during the same period.

Despite the strong performance, it’s been a difficult year in Menlo Park, California, as the company finds itself increasingly in the crosshairs of government regulators.

At the federal level, President Donald Trump issued an executive order in May to overturn Section 230 of the Communications Decency Act, a provision that protects social media companies against lawsuits related to content posted on their sites. In a move that raised the ante on earlier threats, Trump announced he would veto the yearly defense bill if Section 230’s repeal was not included in the legislation.

As the biggest news distribution outlet in the world, it was likely Facebook would eventually clash with a president who’s pugilistic attitude toward anything or anyone who challenges him is part of why his supporters like him, but what’s notable is the significant erosion in support for the company from Trump’s detractors as well. Early this month a consortium of attorneys general for 46 states, the District of Columbia, Guam, and the FTC filed an antitrust suit seeking to break up the company.

As the company faces increased regulatory threats and lawsuits, founder Mark Zuckerberg should consider if it’s time to step aside as CEO of Facebook.

Bigger problems than antitrust

It’s clear the bigger risk to Facebook currently is the antitrust lawsuit originating at the state level, but even it’s an odd case. Led by New York Attorney General Letitia James, the antitrust lawsuit seeks to revisit prior corporate acquisitions – Instagram in 2012 and WhatsApp in 2014 – that were approved by the US government.

More telling was AG James’ retweet of US Rep. Alexandria Ocasio-Cortez’s (D-New York) statement that Facebook “abused its market power to … manipulate democracies and crush journalism”. It’s apparent that US politicians have broader concerns with Facebook than 5-year-old acquisitions, and the fact that nearly every state attorney general signed on points to the fact that this is a rare area of bipartisan agreement.

Suffice it to say, Facebook is entering a radically different regulatory environment, and this requires a different mindset from the C-suite. Mark Zuckerberg has been a tremendous founder and CEO, but the skillset he embodies – “move fast and break things” – might no longer be the right one for a company that now controls the digital publishing industry and essentially dictates the national conversation.

Facebook is no longer a scrappy start-up. Instead, it’s the biggest, most influential social media company in the world. As such, what Facebook needs is not a growth-oriented mindset, but rather a CEO with a level of emotional intelligence that rivals Mahatma Gandhi’s and who can balance the needs of a long list of critical stakeholders, politicians being key among them.

If anybody thinks this means Zuckerberg will have no influence, think again. He will remain as board chair and maintain his dual class of shares that gives him a majority of voting rights. Simply put, no big decisions will be made without his approval.

Who’s on deck?

Recently, there’s been a host of op-eds attacking Zuckerberg for seemingly everything wrong in American discourse, often in deeply personal framing. Let me be clear, this article is not one of them. Zuckerberg created a company from nothing that is on pace to become a trillion-dollar giant before Zuckerberg reaches the age of 40. It also made him a very young billionaire. In strict Peter Principle framing, Zuckerberg’s plateau is enviable and unlikely to happen again.

However, with much power comes much responsibility: Facebook at its best is a community builder, a relationship enabler, and a connector. However, these tools can be used to spread misinformation, encourage violence, and destabilise governments. These are legitimate and hard-to-solve issues that require careful consideration.

Stepping down in favor of a new CEO isn’t a failure for Zuckerberg, but rather an acknowledgment that the company has entered a new phase in its development. While his age is often mentioned, what’s less discussed is that he’s been the CEO since Facebook’s founding in 2004, a period significantly longer than the average S&P 500 CEO tenure of 10 years.

There’s also precedent in this move, most notably from early-stage Alphabet (then operating as Google) when Larry Page handed the CEO reins over to Eric Schmidt. A succession plan is never easy, but it’s a critical component of a multi-generational company. Facebook should lead here by starting these discussions in earnest.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• ACCC hauls Facebook to court for ‘deceptive’ conduct
• Zip (ASX:Z1P) share price pushes higher on Facebook deal
• Facebook allegedly crossed a line in buying up the competition
• These 2 FAANG leaders will drive the Nasdaq in 2021
• Here’s how world’s 10 richest made $1.5 trillion from COVID-19

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jamal Carnette, CFA has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Facebook. 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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The Rhythm Biosciences Ltd (ASX: RHY) share price is climbing today after the company was granted a United States patent for ColoSTAT. At the time of writing, the Rhythm share price is up 5% to 84 cents.

Rhythm develops and commercialises Australian medical diagnostics technology for sale in domestic and international markets. The company’s ColoSTAT is the first proposed product-in-development, intended to accurately test and detect the early stages of colorectal cancer.

New patent approval

In today’s release, Rhythm advised the US Patents and Trademarks Office (USPTO) has approved a patent for ColoSTAT biomarkers. The new grant covers 3 core biomarkers that form part of the ColoSTAT blood test. Additional biomarkers can be added to the core markers, if required.

In highlighting the positive announcement, the company noted that USPTO approved less than 35% of diagnostics patent applications.

Addressable market

Rhythm believes the authorised patent will strengthen its growth profile in the US. The current screening for people aged 50 to 74 years old is estimated to be around 94 million. And it could grow by a further 21% following the US Preventative Services Task Force’s recommendation to reduce the screening age to 45 years of age.

Nonetheless, this puts the company’s world-wide access close to 800 million people, when including other approved markets such as Australia, China, Japan, the United Kingdom and Europe.

CEO commentary

Rhythm CEO Glenn Gilbert welcomed the patent approval, saying:

The granting of this US patent further strengthens Rhythm’s global position as an emerging leader in the diagnosis of cancer, initially in the area of colorectal cancer.

The significance of this patent cannot be overstated, as it expands our access to a growing global market, and importantly, with ColoSTAT being a simple, low-cost option, means that we are in a position to access the mass market opportunity in each key country.

Having patent coverage in all the major global markets is a significant value-add for the Company.

Rhythm share price performance

The Rhythm share price has soared more than 500% higher in the past 12 months, reflecting the company’s aggressive expansion into new geographical markets.

More reading

• Why the Rhythm Biosciences (ASX:RHY) share price rocketed 28% to a record high
• These small cap ASX shares delivered more than 100% returns in November

Motley Fool contributor Aaron Teboneras 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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The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is edging lower this morning after the release of an update.

At the time of writing the airport operator’s shares are down 0.5% to $6.60.

What did Sydney Airport announce?

This morning Sydney Airport provided the market with an update on its distribution plans and current passenger numbers.

In respect to its distribution for FY 2020, the company revealed there will be no final distribution this year.

Management explained that it made the decision “given the continued significant impact of COVID-19 on the business performance of Sydney Airport over the second half of the calendar year.”

Traffic update.

As the company alluded to in its distribution update, Sydney Airport is still experiencing a sharp downturn in passenger numbers.

During the month of November, Sydney Airport welcomed 308,000 domestic travellers through its terminals. This was an 87.1% reduction on the prior corresponding period when almost 2.4 million domestic passengers used its airport.

Though, it is worth noting that unrestricted travel between New South Wales and Victoria only started on 23 November. This should give passenger numbers a boost in December.

For obvious reasons, it was much worse for international travellers. Just 42,000 came through its terminals in November, down 96.9% on the same period last year.

This led to total passenger numbers of 350,000 for the month, down 90.6% from just over 3.7 million a year earlier.

Management commented: “Domestic passengers totalled 308,000 for November 2020, down 87.1% on the pcp. The modest recovery in domestic traffic in the month was driven by demand for NSW and Victoria interstate travel. Unrestricted travel between NSW and Victoria was permitted from 23 November.”

“42,000 international passengers passed through Sydney Airport in November, down 96.9% on the pcp. The downturn in international passenger traffic is expected to persist until government travel restrictions are eased,” it added.

More reading

• ASX 200 rises on Monday
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• This is when ASX airport shares will take off
• Regional Express (ASX:REX) share price soars to 13-year high

Motley Fool contributor James Mickleboro 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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There are a few different reasons why the shares of Australian Ethical Investment Limited (ASX: AEF) may be interesting to growth investors.

A quick overview of what Australian Ethical does

According to the ASX, Australian Ethical has a market capitalisation of $553 million.

Australian Ethical is a fund manager that aims to invest ethically on behalf of its investors. Its funds try to avoid businesses that are doing harm to the environment, people and animals. Australian Ethical invests in companies that are creating new technologies, building a clean future, finding medical solutions, create more sustainable products and so on.

It has been operating since 1986 and tries to provide investors with investment management products that align with their values and provide competitive returns. Investments are guided by the ‘Australian Ethical Charter’ which shapes its ethical approach and underpins both its culture and its vision.

Here are three reasons why Australian Ethical could interest some investors:

Aligned to the growth of superannuation

As a superannuation fund provider, Australian Ethical is exposed to the growth theme of superannuation. Most employees have 9.5% of their wage contributed into their superannuation account. There are also tax benefits with super that can attract non-employees to contribute, as well incentivise employees to add more than the mandatory minimum amount.

This attractive form of retirement saving leads to regular fund inflows to superannuation funds. The Association of Superannuation Funds of Australia said that Australia’s total superannuation assets totalled $2.9 trillion at 30 June 2020.

Funds under management (FUM) growth

Australian Ethical generates its revenue from the funds that it manages. Most revenue comes from the base management fee, though performance fees can also be generated if an Australian Ethical fund outperforms its respective benchmark.

In FY20 its group FUM rose by 19% to $4.05 billion, with net inflows of $660 million (which was an increase of 100%). The growth was helped by a 20% increase in customer numbers. One of the things that Australian Ethical was most proud of in the result was a net promoter score of +63 for its super funds and +58 for managed funds, which was among the best in the industry. The company also has a top quartile staff engagement score of 86%.

In the latest quarterly update, for the three months to 30 September 2020, Australian Ethical’s FUM grew by 6.5% to $4.32 billion. It saw $0.10 billion of net inflows for superannuation and $0.06 billion net inflows for its managed funds.

Financials

The FUM growth translated into financial growth during FY20. Australian Ethical’s revenue grew 22% to $49.9 million, with a $3.6 million performance fee generated from the outperformance of its emerging companies fund.

Underlying net profit after tax grew by 42% to $9.3 million and net profit after tax (NPAT) grew 46% to $9.5 million. Excluding the impact of the performance fee, revenue and underlying net profit both rose by 15%.

This profit growth funded a total FY20 dividend of 6 cents per share, which was an increase of 20%. The company said it has a strong balance sheet with no gearing.

In terms of FY21, Australian Ethical said the revenue growth will be partly supressed by the full year impact of the super fee reductions to benefit existing and future members. The FY20 performance fee is also not guaranteed to be generated again in FY21.

More reading

• Got cash to invest? Here are 3 ASX growth shares to buy
• How this ASX share is riding the rapid growth of ESG investing

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. 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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A finance broker has been arrested in Sydney, charged with attempting to steal $21.6 million from National Australia Bank Ltd (ASX: NAB).

The 64-year-old man was arrested at Blacktown Police Station on Tuesday morning, facing 4 charges relating to fraudulent bank deposit guarantees used to buy real estate for inflated commissions.

The same investigation resulted in the arrest earlier this year of a 38-year-old former NAB employee and a 47-year-old man. They both remain before the courts.

New South Wales police started its enquiries in February after the bank’s systems detected suspicious activities.

NAB executive group investigations and fraud head Chris Sheehan said no financial losses were actualised from the alleged fraud.

“NAB referred the matter to the authorities as soon as our systems detected unusual activity. We have continued to work closely with police throughout the investigation.”

He added that the former employee accused of the crimes was fired.

“NAB has zero tolerance for any criminal activity and any employee who knowingly engages in such conduct will be dismissed. Where we identify apparent criminal conduct, we immediately refer matters to the police.”

The man arrested this week is due to appear at Blacktown Local Court on Thursday.

The police investigation, dubbed Strike Force Exton, is continuing.

More reading

• Why the NAB (ASX:NAB) share price climbed higher today
• The Commonwealth Bank (ASX:CBA) share price is climbing higher today. Here’s why.
• Why the Bendigo and Adelaide Bank (ASX:BEN) share price is jumping higher today
• The ASX bank with the best dividend yield under APRA’s new guidelines
• Here’s how ASX 200 bank shares have performed in 2020 so far

Motley Fool contributor Tony Yoo 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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Nine Entertainment Co Holdings Ltd (ASX: NEC) shares are on the move this morning after the company released a revised trading update. At the time of writing, the Nine share price has surged 4.26% higher to $2.45 on news the company now expects its first-half earnings to come in at 40% growth, compared to the previous guidance of 30%.

What’s moving the Nine share price?

Investors are driving up the Nine share price after the company reported its trading outlook has improved since holding its annual general meeting (AGM) in mid November. 

Nine reported that, during the AGM, it advised expected first half earnings before interest, tax, depreciation, and ammortisation (EBITDA), before specific items, to be up by around 30%.

Since that time, Nine says trading conditions have continued to improve, with EBITDA before specific items for the six months to 31 December, now expected to be up by more than 40%, on the same basis. 

Of particular note, Nine’s December quarter is now expected to show growth in metropolitan free-to-air advertising revenue of almost 20% (previously around 15%). This means the company‘s metropolitan TV advertising revenues in the December half are now expected to be up by around 1% on the prior corresponding period. 

Nine also advised that, given limited visibility of the second half advertising market, it is not in a position to provide guidance on earnings for the full year. The company does, however, expect to be in a better position to address this at the half year results release in February. 

More about Nine Entertainment

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%.

Analysts have said that this market is gradually dwindling as advertisers move to digital platforms. However, management said Nine’s investments in digital platforms such as 9Now, Stan, and Domain had gradually increased its market share in the fragmented digital market. This is where the company expects to derive its future growth.

The Nine share price performance in 2020

The Nine share price has been on the rise in 2020, gaining around 35%, after having fallen as low as 84 cents during the March crash. Nine shares reached a 52-week high of $2.59 in November. 

The company commands a market capitalisation of $4 billion.

More reading

• 2 top ASX shares to buy according to WAM
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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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