Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Greetings and keep up the informative commentary... What's the summary for the recent goings on at SXL? Doubtless it's bad but why are they doing this and what's it mean for them and investors? Cheers! Dave
Morning Dave,
In late October Southern Cross Media (SXL) announced full year revenue was down over 18% to $540m with COVID the major earnings headwind, an ok result considering how many businesses aggressively reined in their advertising through the uncertain times. History tells us that advertisers ramp up spending when the economy is improving hence SXL should see trading conditions improve in the months ahead.
In terms of the recent share consolidation, this is not a ‘bad’ update. They have simply consolidated the number of shares on issue on a 1 for 10 ratio. i.e. for every 10 shares you hold, you now own 1 however the price is now 10 times higher. On current prices of $1.93 the pre-consolidated price would be 19.3c. Companies do this for a range of reasons, however ultimately, it brings their stock out of the ‘penny dreadful’ area of the market without having any influence on shareholder value.
While this is not one for MM, media businesses like SXL are very leveraged to economic recoveries, and if we held, we’d continue to hold to see if they can take advantage of improving conditions.
Take a free trial.
No payment details required.
Forgot password? Request a One Time Password or reset your password
One Time Password
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
A link to create a new password will be sent to the email address you have registered to your account.
Hi, this is only available to members. Join today and access the latest views on the latest developments from a professional money manager.
Our Smart Phone App will give you access to much of our content and notifications. Download for free today.
