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Nation Media Group - BUY Recommendation
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mwekez@ji
#1 Posted : Thursday, May 30, 2013 1:38:25 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
We upgrade our recommendation on Nation Media Group Limited (NMG) to a BUY based on a fair value of KES 367.00, representing a 15.1% upside to current market price. We believe that the broadcasting (3 year CAGR of 18.9% in revenue) and digital segments will drive top line growth going forward, even as growth in the newspaper and magazines business takes a dip (+15.6% y/y in FY13F, +10.0% y/y in FY14F, +8.5y/y in FY15F). This will be supported by Ad spend growth in East Africa on account of improved economic performance as well as market share gains in Uganda, Tanzania and Rwanda. Additionally, cost containment measures by the company coupled with investment in new printing presses will see the EBITDA margin strengthen (+470bps to 33.5% in FY13F), consequently driving bottom line growth (3 year CAGR of 15.8%).

Positives:
· Broadcasting business to drive top line growth
· Election related spending to boost FY13 performance
· Stronger Kenya Shilling to support gross profit margin enhancement
· Attractive valuation
· Economic recovery to boost Ad spend growth
· Growth in newsprint business to decline as circulation matures
· Digital media, a strong growth area
· EBITDA margin to strengthen on the back of cost management
· Strong market share
· Pan Africa expansion still on course
· Strong cash position
· Bonus Issue to increase liquidity

Risks:
· Volatility in newsprint costs
· High cost of insurance
· Foreign exchange risk
· Human capital a major concern
· Looming competition after switch to DTT

(source: Kestrel Capital - 30.05.2013)
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  | | Edit by user: Thursday, May 30, 2013 1:44 PM | Reason: Not specified
Kausha
#2 Posted : Thursday, May 30, 2013 2:26:03 PM
Rank: Member

Joined: 2/8/2007
Posts: 808
Just wondering what adjusting for the adspend by the very many commissions that were getting operationalized and IEBC would mean to revenues going forward and valuation. Me thinks results for 2012 may have been one off!
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mwekez@ji
#3 Posted : Thursday, May 30, 2013 2:57:24 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
Nation Media Group grows its online platforms in leaps and bounds



http://www.businessdailyafrica....290/-/ceo80/-/index.html
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mwekez@ji
#4 Posted : Thursday, May 30, 2013 3:01:35 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
Kausha wrote:
Just wondering what adjusting for the adspend by the very many commissions that were getting operationalized and IEBC would mean to revenues going forward and valuation. Me thinks results for 2012 may have been one off!


Me thinks most of the adspend was recorded in Q1 2013 hence the coming results for H1 2013 will be outstanding coz of this one off revenue. This should also present a case for an extra juicy interim dividend this time round.
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Kausha
#5 Posted : Thursday, May 30, 2013 3:45:06 PM
Rank: Member

Joined: 2/8/2007
Posts: 808
@mweke...you also forget the 1Q13 election related expenditure is more than offset by the lull in adspending by most organizations running Jan - Dec year ends. Q1 was largely let to sink. You are now seeing ads coming out of the woodwork which may end up producing a normal year.
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muganda
#6 Posted : Thursday, May 30, 2013 4:08:02 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
@Kausha may be on to something...

Interesting also to see segments are only Print (newspaper, magazines)or Broadcast (tv, radio). All the fuss with Digital but it's still a midget (5% revenue, ??% profit) which is added up to Print.

Revenues only from Circulation (40%) and Advertising (60%).
Ehh, it's the content stupid smile
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luxel
#7 Posted : Tuesday, June 25, 2013 12:44:47 PM
Rank: Member

Joined: 7/17/2008
Posts: 152
How come NMG announced bonus shares which was approved by the AGM and the share price has adjusted to ex-bonus but the company has refused to credit the bonus shares because the same has not been approved.
What happens if this further approval is not granted?
Does it mean those who bought at cum-bonus price were conned?
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King G
#8 Posted : Thursday, July 11, 2013 12:43:45 PM
Rank: Elder

Joined: 6/20/2012
Posts: 3,855
Location: Othumo
This market is funny, I have a purchase order @300 which has not been picked. Do I cancel and re-order?
Thieves
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mwekez@ji
#9 Posted : Thursday, July 11, 2013 12:58:00 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
King G wrote:
This market is funny, I have a purchase order @300 which has not been picked. Do I cancel and re-order?


Your purchase order did not get to market. Huyo broker wako anakuchezea. Who is he
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King G
#10 Posted : Thursday, July 11, 2013 1:15:54 PM
Rank: Elder

Joined: 6/20/2012
Posts: 3,855
Location: Othumo
mwekez@ji wrote:
King G wrote:
This market is funny, I have a purchase order @300 which has not been picked. Do I cancel and re-order?


Your purchase order did not get to market. Huyo broker wako anakuchezea. Who is he


Suntra.... through Tangaza321.com/trading platform
Thieves
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