UK media companies see positive results in valuations over the
last 6 months despite buyers pausing for breath in Q4 2009
The last quarter of 2009 (Q4 2009), saw a marginal fall of 1.2%
in valuations of media stocks as buyers of media shares paused for
breath. Despite this, media stocks still outperformed the FTSE 100
and other broad indices over the last 6 months (since July 2009) as
the market overall recovered, according to the latest Media Watch
index from accountants and business advisers, Grant Thornton UK
LLP.
Over the last 6 months, the 98 UK-listed media-related companies
outside of the FTSE 100 which form the Media Watch index saw gains
of 31.8%. This is compared to a lesser 24.7% increase seen across
the FTSE 100, the FTSE All Share (24.6%) and the FTSE AIM All
Share, which increased 22.8% over the same period. Over the whole
of 2009, the Media Watch Index rose by 32.3%, significantly higher
than the FTSE 100 (22.1%), the FTSE 350 (24.5%) and the FTSE All
Share which increased 25.0% over the same period.
In spite of these gains, the Media Watch index fell 1.2% in Q4
2009. Significantly fewer companies (36%) were in positive
territory in the final quarter of last year, compared to the 70% of
media companies posting share price increases in Q3 2009.
The sub-sector struggling most in Q4's
Media Watch index was Publishing. On average*, the value of
Publishing companies fell by 8.1% in the quarter. This was followed
by Broadcast & Entertainment, which saw values fall by 4.6%.
Media Agencies were the most buoyant, with an increase of 5.5%. All
sectors however did witness a marked overall rise in value over the
whole of 2009.
Contributing to the decline in Q4's index were the performance
of the larger publishing companies such as Yell (down 28.7%) and
Johnston Press (down 38.2%). Yell posted a sharp drop in first-half
pretax profits and Johnston Press continued to struggle in the face
of declining advertising revenues.
On a more positive note, broadcaster ITV boosted the Media Watch
Index in Q4 2009 with an 18.3% rise, partially impacted by its
announcement of forecast increased advertising revenues, optimism
for 2010 and the announcement of its newly-appointed chairman,
Archie Norman.
Mark Henshaw, Head of Media and Entertainment at Grant Thornton
said: "Media stocks appear to have been over-sold in 2007, 2008 and
early 2009 making them attractively priced as the overall market
saw an upturn. This contributed to media stocks rebounding in Q3
2009 where they grew by 33.5%, their highest quarterly growth in
2009.
Now that the market has levelled out, it would seem that people
are beginning to evaluate the kinds of media stocks they hold and
balance out their portfolio. This no doubt contributed to the
slight fall in the last quarter of 2009 where in addition, some
profits were taken."
For further information, please contact: Stephanie Aneto, Grant
Thornton Press Office: 020 7728 2940. email: stephanie.aneto@gtuk.com